Tuesday, December 27, 2022

Blaming "lazy old people" for inflation????

In a New York Times article Retirees Are One Reason the Fed Has Given Up on a Big Worker Rebound , one has a hint of "blame the old people" for inflation:

Alice Lieberman had planned to work for a few more years as a schoolteacher before the pandemic hit, but the transition to hybrid instruction did not come easily for her. She retired in summer 2021. Her husband, Howard Lieberman, started to wind down his consulting business around the same time. If Alice Lieberman was done working, Howard Lieberman wanted to be free, too, so that the pair could take camping trips and volunteer. The Liebermans, both 69, are one example of a trend that is quietly reworking the fabric of the American labor force. A wave of baby boomers has recently aged past 65. Unlike older Americans who, in the decade after the Great Recession, delayed their retirements to earn a little bit of extra money and patch up tenuous finances, many today are leaving the job market and staying out.

That has big implications for the economy, because it is contributing to a labor shortage that policymakers worry is keeping wages and inflation stubbornly elevated. That could force the Federal Reserve to raise rates more than it otherwise would, risking a recession.

The impact is 3.5 million "missing" workers:

About 3.5 million people are missing from the labor force, compared with what one might have expected based on pre-2020 trends, Jerome Powell, the Fed chair, said during a speech last month. Pandemic deaths and slower immigration explain some of that decline, but a large number of the missing workers, roughly 2 million, have simply retired. And increasingly, policymakers at the central bank and economic experts do not expect those retirees to ever go back to work. “My optimism has waned,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution. “We’re now talking about people who have reorganized their lives around not working.” Millions of Americans left or lost jobs in the early months of the coronavirus pandemic as businesses laid off employees, schools closed and workers stayed home.

Old people are responsible for 900,000 of the missing

Among those 65 and older, on the other hand, participation lags well below its pre-pandemic level, the equivalent of a decline of about 900,000 people. [about 26% of the 3.5 million]


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