BLS Chief: School, Retirement and 'Safety Net' Explain 94,333,000 Not in Labor Force

By Susan Jones | August 11, 2016 | 11:06am EDT
Some of the people who are not participating in the labor force "are people who we, as a society, have decided we are going to support in some other way," the BLS chief told CSPAN on Aug. 11, 2016. (AP File Photo)

( - Students and retirees are "an important part of what's going on" with the labor force participation rate, the head of the Labor Department's Bureau of Labor Statistics on Thursday.

But Erica Groshen also said the nation's taxpayer-funded social safety net is another factor that explains the 94 million Americans who are not in the labor force.

"In older, tougher times, we didn't have as much of a safety net, so some of the people who are not participating are people who we, as a society, have decided we are going to support in some other way," she told CSPAN.

The safety net includes the SNAP (food stamp) and Social Security disability programs, both of which have ballooned in the Obama years.

As previously reported, there were 17.3 million people on food stamps when President George W. Bush took office in 2001. That number grew to 28.2 million in 2008, a 63 percent increase over eight years.

During the recession that took hold in Obama's first term, the number of people on food stamps went from an average of 33,490,00 in fiscal 2009 to an average 47,636,000 in fiscal 2013. It has drifted down since then, to an estimated 43,478,196 in May 2016, the latest month for which numbers are available.

At the same time, the Social Security disability rolls have swelled, from around 9,296,490 when Obama took office to 10,664,290 in July 2016. (The number includes spouses and children of disabled workers.)

In July 2016, 94,333,000 Americans were not in the labor force. The labor force participation rate -- 62.8 percent in July -- measures the percentage of people in the civilian noninstitutionalized population, age 16 or older, who are either working or actively seeking work. July's 62.8 percent rate remains near the 39-year low of 62.4 percent.

"So what are the people who are out of the labor force doing?" Groshen asked rhetorically on Thursday.

"Many of them...are in school but not working," she said. She called it "an important part of what's going on."

"And we're seeing actually that fewer students are working than used to in previous years, so that's some part of the decline in participation, is that our young people are staying in school longer and less likely to work while they're...more focused on their school work.

"The other trends that we have are...the baby boomers who are a huge demographic bulge, are now retiring, and as we reach retirement age....that means that a larger share of our population is going to be retired. So that's a very important part of the demographic story that underlies the decrease in labor force participation."

According to the U.S. Census Burean, around 75.4 million Baby Boomers were born between 1946 and 1964. They began turning 65, retirement age, five years ago in 2011, and the retirement pace is expected to accelerate in the years ahead.

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