Labor Force Shrinkage

Posted on Monday, October 5, 2009

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As described in last week's post Unemployment: Even Worse than the Headlines, has the labor force not decreased over the month, unemployment would have jumped to a level higher than 9.8%

But how uncommon is a shrinking labor force? This is the first year over year decline since the early 1960's.

And why wouldn't individuals stop looking for a job. As the chart shows below, the number of people who have been unemployed longer than half a year has spiked to record levels.

And the long-term implications via Alan Greenspan.

"People who are out of work for very protracted periods of time lose their skills eventually. What makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and, in one sense, an irretrievable loss."

Source: BLS

Jake 05 Oct, 2009

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Source: http://econompicdata.blogspot.com/2009/10/labor-force-shrinkage.html
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