Let’s Blame Lazy Grandparents for Low Labor Force Participation

by Christopher Rich

June 20, 2017

Labor force participation rates rose in 29 of Oregon’s 36 counties from 2015 to 2016; the rate remained unchanged in two and decreased in five. Eastern Oregon followed this majority trend with Wallowa as the only Eastern Oregon county to dip from the previous year. The labor force participation rate is the labor force divided by the civilian noninstitutionalized population 16 or older.

Over-the-year trends may show an increase in 2016, but long-term trends point in the opposite direction. Participation rates fell in the bulk of Oregon counties from 2000 to 2016, similar to the declining overall state and national participation rates. Downward trends were seen in 26 Oregon counties from 2000 to 2007 and in 32 counties from 2009 to 2016. The Great Recession briefly reversed the majority downward trend as 27 counties saw increased participation from 2007 to 2009.
Since the labor force captures not only people with a job, but also those looking for work, the participation rate likely rose for two primary reasons during the recession. First, job seekers were being drawn into the labor force at the start of the recession because the overheated economy still appeared to offer opportunity (high wages, low entry requirements, quick advancement potential). Second, more job seekers came off the sidelines during the recession, as a response to job loss in households that had only one wage earner prior to the recession.  

Downbeat on the Dry-Side

Eastern Oregon followed Oregon’s downward trend from 2000 to 2016. Both the workforce area (Baker, Grant, Harney, Malheur, Morrow, Umatilla, Union, and Wallowa) and the state overall experienced decreasing labor force participation during the extended period. Eastern Oregon’s rate (61.1%) was a decrease of 2.7 percentage points since 2000 while Oregon’s rate fell by 6.2 percentage points to 62.6 percent.

Among the group of eight, Malheur was alone with participation growth. The county’s 2016 rate (60.2%) was an increase of 4.4 percentage points over the 2000 rate (55.8%). Grant County saw the biggest change among the seven decreasing counties. Grant’s rate dropped 10.2 percentage points to reach 52.4 percent in 2016. Morrow saw the smallest change, dropping 2.8 percentage points to reach 66.8 percent. Not only did Grant have the largest change among the group and Morrow the smallest, the two counties also had the lowest and highest participation rates, respectively, in 2016.
Baker County was a close second for low participation. The county’s 2016 rate (53.1%) was a small improvement over the previous year’s rate (51.7%) after having the lowest participation in the group in 2015. Baker’s 2016 rate, however, was a 3.1 percentage point decrease from 2000. Umatilla County’s decrease was in line with Baker’s, though the participation rate was quite a bit higher; the county dropped 3.2 percentage points since 2000 to reach 65.3 percent in 2016. Harney, Union, and Wallowa also had declines in participation rates since 2000. Harney dropped 7.6 percentage points to 58.5 percent, Union dropped 5.3 percentage points to 63.2 percent, and Wallowa dropped 5.4 percentage points to 57.4 percent in 2016.

…I Just Wanna Bang on a Drum All Day

It seems a common belief that younger generations are lazier today than they were in the past. Both Millennials and the up-and-coming Generation Z are repeatedly lambasted for an apparent addiction to social media, video games, and technology. Data does indeed show that labor force participation has fallen rapidly among younger age groups. Participation rates for the 16 to 24 age group in Oregon fell from roughly 70 percent in 2000 to 55 percent in 2016. So does this mean that lazy youngsters are behind the falling labor force participation rates in Eastern Oregon? Data reveals a different culprit.

Although detailed Census Bureau migration data for Eastern Oregon is spotty, the data suggests that a larger share of households moving into Baker, Grant, Harney, and Wallowa are older and without children. The data also suggests that households moving out of these counties are predominately younger. This is likely due to an older age group seeking less populated, relatively less expensive, nonurban environments for retirement, while the younger age group seeks bustling urban environments for entertainment and opportunity. These migration trends, along with aging, have pushed demographic shifts throughout the region. Estimates from Portland State University’s Population Research Center show a population heavily skewed toward the 55 or older age group in the aforementioned counties. The 55 or older group represented 29.1 percent of Grant County’s population in 2000, whereas in 2016 the age group increased to 49.1 percent of the population. Baker saw the group shift from 31.3 percent of the population to 42.9 percent, Harney saw the group shift from 26.0 to 40.1 percent, and Wallowa saw the group shift from 31.1 to 46.1 percent of the population in 2016.
The 55 or older age group grew across all of Eastern Oregon from 2000 to 2016, increasing by 18,514 people. At the same time, the 18 to 54 age group decreased by 4,638 and the 0 to 17 age group decreased by 2,743. This meant a shift from 23.5 percent of the population in the 55 and over age group in 2000 to 32.0 percent of the population in 2016. During this same period, the state’s 55 or older group shifted from 21.8 percent of the population to 29.9 percent.

A few key points help to understand how all of this affects labor force participation. The number of people in Eastern Oregon in their prime working years (25 to 54) decreased, as did the group’s replacement feeder stock: Millennials and Z-Gen. At the same time, the 55 or older group expanded. In Eastern Oregon as well as Oregon, over half of the 55 or older age group has reached or surpassed the standard retirement age of 65. In some individual counties the ratio is much higher. In Grant County for instance, 72.0 percent of the 55 or older age group is 65 or older. The only Eastern Oregon county that bucks this trend is Umatilla (46.6%). Another point is that when someone ages out of the labor force they are still counted in the civilian noninstitutionalized population unless they become institutionalized or leave the population. This means that as Baby Boomers have been aging out of the labor force without being replaced by new labor force entrants, the labor force participation rate has fallen. Some people might say then that Eastern Oregon’s declining participation rates are not caused by lazy youngsters, but lazy grandparents.

Two Notes on Discord

Umatilla is the only Eastern Oregon county to have grown in the 0 to 17, 18 to 24, and 25 to 54 age groups since 2000. If Umatilla County was removed from the analysis of Eastern Oregon overall, it would reduce growth in Eastern Oregon’s 55 or older group by 6,765 people. However, the 0 to 54 age group would lose another 2,435 people. The net effect would be an increase in the share of Eastern Oregon’s population represented by the 55 or older group from 32.0 percent to 35.7 percent.

Malheur is the only Eastern Oregon county to have a higher labor force participation rate in 2016 than in 2000. This warrants further study, however estimates show a primary reason for this is a decrease of roughly 2,600 in the civilian noninstitutionalized population since 2000.

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