Monday, April 6, 2015

Employment - Unemployment: 25 - 54 Age-group Still Getting Pounded.

Subjects: Unemployment, Immigration, Employment growth, Ages 25 - 54, Male, Female

I recently read a ZeroHedge article, by Tyler Durden, with a thesis on how most employment growth has been going to males, 55 years and older.  I noticed two flaws in the analysis. First, some comparisons only included the age-group 55 - 64 and other data presented includes ages 55 and over (including retirement age). Second, I did not see any consideration for the fact that many of these employed males are baby-boomers and may have aged into the 55 and over category, simply remaining employed in the same position.
(In an earlier posting, I noted that 2/3 of the 3 million net jobs created from 2000 to End of Year (EOY) 2009, were held by retirement age individuals beginning in 2010, most likely, this is a combination of aging into the age-category and choosing not to retire during recession, with some electing to return to the workforce.)
For the reasons I've stated above, I decided to look at the 25 through 54 age-group and do an Employment to Population growth sample from EOY 1999 to the present (end of month March 2015).  During this exercise, one thing that occurred to me is that this would be an opportunity to expose how meaningless the Unemployment statistic really is.

Current (March 2015) employment levels are still 691,000 below Jan. 31, 1999 levels.

In the chart above we are simply examining the aggregate growth of the BLS-CPS population growth (noninstitutionalized civilian population) with employment growth for the 25 - 54 year old age-group. I note that the population has declined by 1.05 million since 2007; considering the fact that immigration is well over 1 million per year, I presume the population decline is due to baby-boomers aging out of the category.

Unemployment vs. Not In the Labor Force: Additionally, I decided to take a look at the unemployment rates for the period and compare them to employment levels. I found two months with almost identical employment levels. In January 2009, employment was 95,921,000 and the Unemployment rate for this age-group was 7.7%.  In January 2015, employment was 95,834,000 and the Unemployment rate was 5.3%.  
Simple logic infers that a reduction of 487,000 (0.39%) in the population, with virtually the same employment levels, did not cause the Unemployment rate to be 2.4% lower. The cause for the Unemployment rate decline is that 2,705,000 fewer persons feel that seeking employment will produce any results.  
If you don't already know how this happens statistically, the search-term is "Not In the Labor Force" and there is a, freshly published, Bureau of Labor Statistics backgrounder here.

 As the ZeroHedge article article does imply, women do seem to have a tougher go than men.

Current (March 2015) female employment levels are still 679,000 below Jan. 31, 1999 levels.

In the chart for females above, I note that the 2001-02 recession caused a flat employment growth rate from 2001 until 2004.  Employment did not return to 1999 levels until 2006, and in comparison to the chart for males (below), the 2004-08 recovery for the female population did not exceed 1999 employment levels, even though this population had increased by 3 million.

Current (March 2015) male employment levels are still 11,000 below Jan. 31, 1999 levels. 
Also of interest is that the entire decline in the population for the age-group is limited to males.

For the male population, I note that the 2001-03 recession was short-lived, with 2007 employment levels reaching 2.6 million higher that Jan. 31, 1999, 4.3 million jobs evaporated by 2009, while the population had increased by 4.2 million for the period.

About these charts: These charts are a sample of how the job-creation engine is performing over a specific period of time.  In the 25 - 54 age group, we have added 6.2 million to the population (5.25%), combined with employment level losses of 691,000 since 
Jan. 31, 1999.

My recommendation (which will fall on deaf ears):  In his wisdom, the President is hell-bent on providing permanent residency to some illegal aliens living within the United States. The problem with this plan is he gives nothing in return and does nothing to restore the employment growth economic-equilibrium.  The remedy is an immigration moratorium, this can be achieved by a decrement in the caps on legal immigration for each illegal alien that is granted status on a one to one basis.


Period ending: March, 2015

(Unadj) Population Level - 25-54 yrs. 
Total = 124,949,000
Male = 61,334,000
Female = 63,615,000

(Unadj) Employment Level - 25-54 yrs.
Total = 96,300,000
Male = 51,615,000
Female = 44,685,000

Data extracted on: April 5, 2015 (2:19:06 PM)

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