Economy Watch: CBO Says Older Workers Hanging on to Their Jobs
- Mar 25, 2011
According to a report by the Congressional Budget Office released on Thursday, for most groups of people, the recession has driven workers out of the labor force. As recently as the late 1990s, 67 percent of the population was in the work force, marking the peak of work force participation. At the beginning of the Great Recession in Dec. 2007, the rate was 66 percent; in February 2010, it was 64.2 percent.
The only group whose work force participation hasn’t dropped recently are workers over 55. The CBO cites the likes of better health overall for that age group and fewer jobs requiring physical strength. The report also spoke of changes in pension and health insurance plans that encourage workers to work longer.
The report only tap danced around what is likely to be the main reason to hang on for most older workers, however: “Increases in life expectancy may lead many workers to prefer to work longer in order to accumulate enough savings to finance what they anticipate will be a longer period of retirement,” the report says. In blunter terms, a lot of people can’t afford to retire and will work as long as they can, not because they “prefer” to, but because they must. It’s a hint at how the baby-boom generation is going to deal with retirement.
The incredible shrinking city
Detroit was in the news on Thursday for not being the city it once was. In fact, according to recently released 2010 Census data, it’s a shadow of the city it once was.
The city’s population drop between 2000 and 2010 has been staggering. Ten years ago, about 951,200 people called the city of Detroit home. Last year, only about 713,700 did–a 25 percent drop over the first decade of the 21st century, putting the population down to about what it was during the first decade of the 20th century, back when the auto industry was just getting off the ground. In 1950, the city’s population peaked at 1.85 million.
The impact of the population drain on Detroit’s housing stock has been monumental. Currently, notes the U.S. Census Bureau, about 80,000 housing units in the city are vacant, or roughly one-fifth of the entire housing stock–twice as many as in 2000.
First Fed news briefing (ever) slated for April
Federal Reserve Chairman Ben Bernanke has agreed to hold quarterly news briefings with reporters, an astonishing change of course for the central bank, which for most of its history has been as secretive as a teenage girl with her diary. It wasn’t until 1994, for example, that the Fed even bothered to release a statement after each meeting of the Federal Open Market Committee.
Apparently the Fed has decided to throw a bone to its many critics and make a stab at greater transparency. Beginning on April 27, the chairman will answer questions after four of the FOMC meetings each year. The event will be broadcast live on the Fed’s website.
Wall Street avoided a case of the jitters again on Thursday–despite these being jittery times–with the Dow Jones Industrial Average gaining 84.54 points, or 0.7 percent. The S&P 500 and the Nasdaq were up 0.93 percent and 1.41 percent, respectively.