Question

Please watch the following video on the decline of men (and women) labor force participation rates (https://www.youtube.com/watch?v=tCOfP3e9Co8) and be respond to the following questions.

1. Who are these men, and how are they spending their time?
2. What are some of the supply and demand factors for the declining participation rates?
3. Has the decline in participation rates occurred in other OECD (i.e. wealthy economies) countries?
4. What can we do about it? That is, bringing these men/women back into the labor markets.
5. Why should the next President (and us) care about this decline in participation rate?

Answer 1

1. These are the people who are mostly too old to be in school or too young to be retired by our conventional standards and are just doing nothing to get a job. These are the people will low education qualification or they are poor. They are most of the time watching television.
2. The demand by the employers has got down as well and the government is less generous than before and the wages offered to them are not high. The labor market is on the road to recovery from the deepest economic recession since the Great Depression. The private sector has supplemented 12.8 million private-sector jobs in and over 64 months of job growth. The unemployment rate is down to 5.3 percent which is a seven-year low. whilst the labor market is on the restoration path, looking exclusively at the falling unemployment rate overstates that recovery. Additional indicators of labor market health which include the labor force participation rate, propose that there is more work to be done. The decrease in the labor force partaking rate predates the Great Recession furthermore is mainly the result of a number of structural changes in the labor market which include the aging of the workforce. Latest decrease in the labor force partaking rate which are not explained by long-standing structural changes and are mostly because of continual business cycle effects. Five years hooked on the labor market’s mending from the most ruthless recession in recent history, demand remains limp.

3.Yes the decline in participation rates occurred in other OECD (i.e. wealthy economies) countries. The existing labour market condition in OECD countries needs to be well thought-out against a backdrop of both long term as well as more recent developments. One of the most significant of these is that several OECD economies are at or near a business cycle peak, or we can say that they at least appear to have reached the phase where fresh rates of development may not be sustainable devoid of fuelling inflation more. So far the persistent employment growth observed ever since 1983-84 has not been adequate in many countries in order to lessen unemployment rates to pre-recession levels. Without a doubt, many unemployed persons carry on to experience trouble while reintegrating the ranks of the working population. Regardless of continuing unemployment, the past two years have witnessed what look like to be labour and skill shortages in many countries. A longer-term progress concerns the ageing population. With the steady decrease in the size of the youth legion inflowing the labour force, the youth share of the working-age population is decreasing year by year in many OECD countries. This decrease looks like to have made contribution to labour and skill shortages as well, particularly since it has been occurring throughout an expansionary period. Quite a lot of other long-term developments, like the trends towards increased participation by women, towards part-time work, towards reduced working hours in general, as well towards earlier retirement can be anticipated to be affected by the demographic developments happening in OECD countries.

1. If policy makers wish for raise the labor force participation rate, or else at least try to keep it as high as possible, then a number of options fit in on the table. Fiscal and monetary policy which focuses on intensification economic growth while prioritize full employment can assist to boost the labor force participation rate. Stronger economic growth can help out pull more workers into the labor force provided they see higher wages being presented by employers. But doing so requires more stimulus by the way of fiscal policy. Boosting infrastructure spending can speed up economic growth by 1.5 percent in the short-term, which would facilitate create jobs as well as pull disheartened workers back into the labor force, while improving the health of the economy in the longer-term. Further accommodative monetary policy have enormous potential to kindle labor demand.
2. He can care about the decline in participation rate by bringing about the structural policy changes add net public sector (i.e., government) jobs. Policy can play an key role in boosting the labor force participation rate, however policymakers need to focus on the correct levers. Relentless floppy demand suggests that fiscal and monetary policies are an imperative first step. In the absence of political action on those fronts, on the other hand, family-friendly policies restructuring are important options.