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| Charles Hugh Smith and Gordon T Long discuss the puzzle of the falling US Civilian Labor Participation Rate in which all the pundits express concern but few agree on what the root cause is.
RELENTLESS TECHNOLOGY ADVANCEMENT – Gaining The Right Perspective Together they show that it is instructive to start with the larger picture going back to 1970 when massive historic computer technology advancements truly began to be adopted. Schumpeter’s Creative Destruction was in full swing and accelerated as every industry was re-invented by labor saving technology. As this wave gained momentum real, family supporting full time jobs became scarcer while fewer equivalent paying new jobs were created when the ratio to population growth was properly factored in. RAPID ENTRY OF WOMEN IN THE WORK FORCE DISTORTS COMPARISONS Examining the actual participation rate chart from 1970 there is clear evidence of the initial rapid entry of women into the workforce. This surge distorts effective comparisons to today’s developments and the cause of the more recent accelerating problem. THREE KEY DRIVERS OF THE POST 2008 DECLINE During the post 2008 financial crisis period, there has been at least three key drivers of the further acceleration in the decline of the US labor participation rate. This is in addition to the ubiquitous adoption of productivity enhancing technology and the effective de-industralization of America: Childcare Costs & Forced Part Time Hours, |
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