Saturday, August 25, 2007

If You Really Want Something to Worry About

Try a hope based set of assumptions concerning growth in the labor force:
Overall, the Bureau expects the labor force to grow from 147.4 million in 2004 to 162.1 million in 2014, an annual growth rate of approximately 1.0 percent.
Backed by an argument:
The labor force will continue to age, with the annual growth rate of the 55-and-older group projected to be 4.1 percent, 4 times the rate of growth of the overall labor force.
Which is then self contradicted some six pages later:
Historically, structural changes have been more important than cyclical changes to the labor force 55 years and older. The continued trend in “early retirements” of the 55-and-older workforce is another structural change facing the U.S. economy. This phenomenon affects the overall labor force participation rate in a negative way, especially at a time when the early cohorts of the baby boomers have already passed into this age group and are near to retiring in vast numbers.
A "news" story lede cobbled from the data and assumptions would be truthful if it said:
A government study shows the lowest annual labor force growth since the 1950's. Worse yet, the study's already low projected rate of growth in the labor force is dependent upon an unprecedented percentage of the over 55 component of the work force remaining on the job beyond the age at which most people hope to retire.
Toss in a reference to this piece, with an "early evidence" graf and you could start a new trend in worry reporting. Toss in a "year over year increases of online help wanted ads support the contention" and you have a real forehead furrower. (Actually, the 20% increase is more a death knell for print want-ads but that would never occur to a journo.)

The bright side of this is that wage growth for the 100 million out of 132 million jobs paying less than $50K per year is going to increase rather nicely over the next decade. The down side is that Bernanke's real job is going to become more difficult with each passing quarter.

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