Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-07-2014, 08:49 AM   #41
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,361
Here is a pretty good report from the CBO that discusses the reasons for the slow recovery of the labor market--

http://www.cbo.gov/sites/default/fil...rketReview.pdf
__________________

__________________
Hamlet is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-07-2014, 08:54 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,906
Quote:
Originally Posted by F4mandolin View Post
Anybody find it strange that almost everybody on this site admits to not knowing what the markets are going to do because it is so complicated.....but on the ACA topic there are a lot of people who seem to know what is going to happen? Seems pretty complicated to me and I am going to sit back and wait until the dust settles....I know I'm not smart enough to figure it all out.
Good point.
__________________

__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 02-07-2014, 10:00 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,616
Quote:
Originally Posted by Hamlet View Post
The labor force participation rate dropped sharply because it is much harder to find a job than it was before the financial crisis, not because workers suddenly found "more attractive alternatives" to work.
It's not either/or, it's both. There's less work (whether we measure it as full-time jobs or raw hours) being done today than in 2009. But, there are also many more people who have dropped out of the official labor force and are no longer being counted as unemployed (even by the BLS's U-5 or U-6 standards, which is not what we normally see quoted).
Charts from the BLS. See slide 19. Note that the "Discouraged" and "Marginally Attached" numbers shot up after 2009 and remain high. These are people who have looked for work within the last 12 months, but not within the last 4 weeks. Now, I suppose this is subjective, but if a person is unemployed/underemployed and hasn't looked for a job/better job in the last 4 weeks, I think it's hard to make the case that they are "desperate for work." And the chart doesn't even count people who haven't looked for a job in 12 months--they just drop out of the denominator and, if no new workers entered the labor force the unemployment rate would eventually go very low.
Summary: Labor force participation is decreasing because there are fewer people working and because there are fewer people who want to work. By the numbers.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 02-07-2014, 10:14 AM   #44
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Quote:
Originally Posted by samclem View Post
Summary: Labor force participation is decreasing because there are fewer people working and because there are fewer people who want to work. By the numbers.
And this is why numbers don't tell the entire story.
__________________
eridanus is offline   Reply With Quote
Old 02-07-2014, 10:41 AM   #45
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,361
Agreed. The CBO report I posted does a really good job of breaking all of it out.

I think my point that there is still more demand for jobs than there is supply still stands. The labor market is still pretty bad overall. We still have millions of people that would prefer to be working if the economy was doing well enough to generate more jobs.

As long as that is the case, the affects of the ACA facilitating voluntary retirements in the workforce are unlikely to have a large negative effect on GDP, unless the people doing the retiring have skillsets that can't be met by the people still looking for work.


Quote:
Originally Posted by samclem View Post
It's not either/or, it's both. There's less work (whether we measure it as full-time jobs or raw hours) being done today than in 2009. But, there are also many more people who have dropped out of the official labor force and are no longer being counted as unemployed (even by the BLS's U-5 or U-6 standards, which is not what we normally see quoted).
__________________
Hamlet is offline   Reply With Quote
Old 02-07-2014, 12:12 PM   #46
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
E-Z fix time!

Just change the law slightly so that people must be employed for one continuous year before being able to claim Social Security. No more worries about people using the ACA to retire early, no problems with the 'reduced productivity' boogieman, and best of all, employers won't have to worry about improving incentives to get people to work for them.

Continued access to relatively cheap labor, improved productivity, and an incentive to participate in the work force! Sounds like a win all around, except maybe for a few members of the 'moocher/looter' class.

Sitting around the virtual coffee shop and fixing all the world's problems in 5 minutes since 2008... ;-)
__________________
M Paquette is offline   Reply With Quote
Old 02-07-2014, 12:36 PM   #47
Recycles dryer sheets
 
Join Date: Dec 2009
Posts: 350
Quote:
Originally Posted by M Paquette View Post
Sounds like a win all around, except maybe for a few members of the 'moocher/looter' class.
I resemble that remark. Oh and hey, get off my lawn
__________________
zedd is offline   Reply With Quote
Old 02-07-2014, 12:58 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,616
Quote:
Originally Posted by M Paquette View Post
E-Z fix time!
Hey, it's a good start. See if we can link in other programs (food stamps, EITC, elimination of the standard deduction for non-workers, etc). Include sudden and somewhat arbitrary hard cutoff points (income, wait times) and I think it will be something that might be obtuse enough to live forever.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 02-07-2014, 02:30 PM   #49
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,629
Quote:
Originally Posted by M Paquette View Post
Even worse, the workers, now free of 'job lock', may go off and become independent competition! .....
Partially agree. Although shall-issue HI has been available to prospective IC's for some time in many states & through many professional societies, for others ACA should make it easier to leave megacorp & start their new business. However this positive for economic growth may be at least partially offset by ACA "cliffs" which create some very real incentives for that IC to limit their business. A sole proprietor supporting his/her family of 4 is going to think long and hard about taking on that next small/mid-sized contract in Nov or Dec that puts the yr's income beyond the 'magic' $94+k or 400% FPL (with loss of $thousands in HI subsidy). And I personally know more than 1 business owner with 40-45+ employees who has cancelled plans to expand specifically because those next few hires (to 50+) would subject the business to employee HI mandate & destroy their already slim profit margin.

Not trying to discourage anyone from becoming an IC, but ACA has added a few twists (pos & neg) to the decision.
__________________
ERhoosier is offline   Reply With Quote
Old 02-07-2014, 02:53 PM   #50
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,361
Yes, I think it would make a lot of sense to smooth out those cliffs to make the incentives less perverse. I also think that if the exchanges work more or less as designed, it might make sense to consider dropping the employer mandate entirely so that we can inch towards getting employers out of the health insurance business at some point in the future.

Quote:
Originally Posted by ERhoosier View Post
Partially agree. Although shall-issue HI has been available to prospective IC's for some time in many states & through many professional societies, for others ACA should make it easier to leave megacorp & start their new business. However this positive for economic growth may be at least partially offset by ACA "cliffs" which create some very real incentives for that IC to limit their business. A sole proprietor supporting his/her family of 4 is going to think long and hard about taking on that next small/mid-sized contract in Nov or Dec that puts the yr's income beyond the 'magic' $94+k or 400% FPL (with loss of $thousands in HI subsidy). And I personally know more than 1 business owner with 40-45+ employees who has cancelled plans to expand specifically because those next few hires (to 50+) would subject the business to employee HI mandate & destroy their already slim profit margin.

Not trying to discourage anyone from becoming an IC, but ACA has added a few twists (pos & neg) to the decision.
__________________
Hamlet is offline   Reply With Quote
Old 02-07-2014, 03:10 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,616
Quote:
Originally Posted by Hamlet View Post
Yes, I think it would make a lot of sense to smooth out those cliffs to make the incentives less perverse. I also think that if the exchanges work more or less as designed, it might make sense to consider dropping the employer mandate entirely so that we can inch towards getting employers out of the health insurance business at some point in the future.
If HI costs keep going up there may be less and less impetus to drop the employer mandate. Employer-provided insurance will become less significant if businesses increasingly decide to pay the fine/tax/whatever and their employees have the option to go to the exchanges (and some will thereby get subsidies). If so, the "job lock" becomes even less of a problem and, as the national cost of providing the resultant subsidies will be escalating there will be little appetite for reducing the $$ gained from the fine/tax/whatever being paid by businesses. If all this comes to pass, it will just amount to an additional tax paid by medium/large American companies (with the resultant impact on their international competitiveness). Which brings us back to the discussion about jobs and where they come from.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 02-07-2014, 03:18 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by Hamlet View Post
it might make sense to consider dropping the employer mandate entirely so that we can inch towards getting employers out of the health insurance business at some point in the future.
+1

If employers would simply stop providing HI coverage to employees while offering the necessary pay levels to attract and retain the people they would like to have on their team, job lock would be gone and labor efficiency would be greatly enhanced. The "employer mandate" promotes job lock.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 02-07-2014, 04:47 PM   #53
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,579
Quote:
Originally Posted by M Paquette View Post

Sitting around the virtual coffee shop and fixing all the world's problems in 5 minutes... ;-)
Takes ya that long, eh?
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 02-08-2014, 12:44 PM   #54
Recycles dryer sheets
NoMoreJob's Avatar
 
Join Date: Feb 2012
Posts: 170
There's an interesting opinion article in the WSJ today about the effect of the ACA on employment and why the CBO made adjustments to their projections in the recent report. The article can be seen here....

http://online.wsj.com/public/resourc...5-20140208.pdf
__________________
NoMoreJob is offline   Reply With Quote
Old 02-08-2014, 06:37 PM   #55
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,361
It's pretty standard supply-side nonsense. He seems to think that having 20 people apply for a job instead of ten magically creates more jobs.

It's like saying soup lines caused the Great Depression.

There are times that you can end up constraining the economy by reducing the supply of labor. It would be bad to extend unemployment benefits when you've got 4% unemployment, for example.

There may come a time when the reduction of the labor supply constrains the economy, but one key symptom of when that is happening is wage inflation, which is pretty much non-existent right now.


Quote:
Originally Posted by NoMoreJob View Post
There's an interesting opinion article in the WSJ today about the effect of the ACA on employment and why the CBO made adjustments to their projections in the recent report. The article can be seen here....

http://online.wsj.com/public/resourc...5-20140208.pdf
__________________
Hamlet is offline   Reply With Quote
Old 02-08-2014, 08:15 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,906
Quote:
Originally Posted by NoMoreJob View Post
There's an interesting opinion article in the WSJ today about the effect of the ACA on employment and why the CBO made adjustments to their projections in the recent report. The article can be seen here....

http://online.wsj.com/public/resourc...5-20140208.pdf
Interesting. Would this imply that countries with government supplied heath care are already "suffering" this side effect?
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 02-08-2014, 08:30 PM   #57
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by travelover View Post
Interesting. Would this imply that countries with government supplied heath care are already "suffering" this side effect?

Yeah. It turns out that most people interested in early retirement evaluate whether or not they are financially independent in terms of the locale where they intend to retire. I'm pretty sure the average English prospective early retiree doesn't include 1,000 a month for medical insurance for himself and the spouse.

Now the USAians, faced with guaranteed issue insurance and no more high risk pools with high rates and/or waiting lists, are beginning a demographical transition to a new equilibrium. This, as do many other changes, frightens or disturbs some people.
__________________
M Paquette is offline   Reply With Quote
Old 02-08-2014, 10:09 PM   #58
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,616
Quote:
Originally Posted by travelover View Post
Interesting. Would this imply that countries with government supplied heath care are already "suffering" this side effect?
It probably depends on the incentives their systems contain. Like the article points out, the hit to the US economy from the ACA is due to the way the incentives are structured. It's good that the CBO is agreeing with this, too bad they didn't do a more thorough analysis when it might have mattered more.

For those who haven't read the article, it is a profile of the work of an economist whose work helped the CBO come to their latest revised estimate of the employment impact of the ACA. It addresses the impact of subsidies, primarily, and says little about the whole "job lock" issue.

Quote:
Originally Posted by Hamlet View Post
It's pretty standard supply-side nonsense. He seems to think that having 20 people apply for a job instead of ten magically creates more jobs.
I doubt he thinks it's "magical." He might have noticed that having more unemployed people leads to lower labor costs (true), which makes it possible to have people do work that was not economically viable at higher labor rates (also true). Yes, having more unemployed people does create more jobs--not on a one-for-one basis, and not by magic, either.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 02-08-2014, 10:40 PM   #59
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,361
Do you think having falling wages during the crisis would have helped the economy, or actually done more damage?

Those lower wages mean lower spending, which means lower revenue for businesses, which lowers demand for labor as well. Those lower wages would have also meant higher rates of credit defaults as vast numbers of people making less money were unable to pay their creditors. Those creditors would then be unable to pay their creditors, etc, etc.

Deflation is death to an economy built on credit.

Quote:
Originally Posted by samclem View Post
I doubt he thinks it's "magical." He might have noticed that having more unemployed people leads to lower labor costs, which makes it possible to have people do work that was not economically viable at higher labor rates. Yes, having more unemployed people does create more jobs--not on a one-for-one basis, and not by magic, either.
__________________
Hamlet is offline   Reply With Quote
Old 02-08-2014, 10:54 PM   #60
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,726
Quote:
Originally Posted by youbet View Post
+1

If employers would simply stop providing HI coverage to employees while offering the necessary pay levels to attract and retain the people they would like to have on their team, job lock would be gone and labor efficiency would be greatly enhanced. The "employer mandate" promotes job lock.
But employers like job lock. After all a traditional defined benefits pension is another thing that locks one to a job, in particular after one is vested. (It is the final average pay formula in addition). The issue is keeping the 10-15 year experience contingent. So you have the HI job lock and the DB pension job lock. (After all a big part of the packages execs that move get is making them whole on their earlier pension i.e. paying as if the person had stayed at the original company and using the new final average pay.
__________________

__________________
meierlde is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Big-Name Investors Get Long, Get Loud and Get Richer timo2 Stock Picking and Market Strategy 2 08-16-2013 09:02 AM
"Hey kid! Offa my lawn!" calmloki Other topics 9 08-27-2007 11:38 AM
Hey, Unclemick: was DeGaulle ripping off Bismarck? Nords Other topics 2 08-02-2006 09:16 PM
Lawn Sprays. Maximillion Other topics 3 04-23-2006 12:12 PM
Hey Young Dreamers... get this- dimwit Young Dreamers 39 09-18-2005 08:21 PM

 

 
All times are GMT -6. The time now is 05:29 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.