The Oregon Employment Department on Tuesday attributed the state’s falling jobless rate primarily to the drop in the number of unemployed people.
While good news, the number of unemployed also factors into another rate watched by economists and employment officials: the labor force participation rate. That rate — the percentage of those age 16 and older who are employed and unemployed — began falling sharply in 2009 and has continued, according to an Oregon Employment Department report released earlier this year.
Some of the decline in the participation rate can be attributed to the Great Recession.
But the aging workforce accounts for about half of the participation-rate drop, and the decline in teens and young adults who have a job or have been looking for one makes up another 25 percent, according to the report.
Recent research by the Federal Reserve Bank of Philadelphia suggests the retirement of baby boomers has been a factor in the declining participation rate.
The economic crash likely prompted some older workers to delay retirement, said Josh Lehner, a senior economist at the Oregon Office of Economic Analysis. As the economy improved in recent years, it helped rebuild their retirement accounts or pensions.
“We’re just on the first wave of the retirement of the baby boomers,” said Lehner, who reported on the Federal Reserve research on his department’s blog earlier this month.
Departing baby boomers — who helped drive up the labor force participation rate in the decades before 2000 — will continue to impact the participation rate for many years, he said. It will also mean a loss to the economy of some of its most productive and experienced workers.
But retiring boomers will also open up jobs for young people, whose participation in the labor force has been dropping for more than two decades, according to the employment department.
Teens and young adults may have many reasons for not getting jobs. But some faced what economists have referred to as the broken job ladder, where workers with more skills or education get stuck in jobs for which they are overqualified, forcing other workers to remain below them on the ladder and leave teens and young adults unable to reach the first rung.
“The silver lining is we’re going to open up a whole lot of jobs,” Lehner said.
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