FEWER WORKERS?

Must we worry? When a smaller percentage of the population is working, does that mean that the overall standard of living must fall?
In the U.S., we have seen the labor force participation rates fall for the last 15 years. This rate is the percentage of the working age population that is either working, or actively seeking for work.
While the rate reached a peak of 67.3% in April 2000, it's been falling ever since to the current 62.9% in January of this year. This is a reduction of 4.4 percentage points.
Further, contrary to some opinion, the decline is not driven by "baby boomers" reaching retirement age. The chart below shows that the elderly population, here those 55 years or older, are becoming more active participants in the labor markets. Note in the chart that only two age groups, the "55 to 64 years" and the "65 and over", have increased their participation starting roughly in the late 80s.

The participation of those in the "65 years and over" group has increased by nearly 10 points over the last 25 years. One reason may be that given longer life expectancy, some people want to continue working when they reach what was traditionally considered retirement age. In other cases, it may simply be that they did not save enough for retirement, and are thus forced to continue working to supplement any retirement savings.
And all other age groups are less active in the labor force. This is particularly so for those 16 to 19 years, whose participation has fallen by nearly 20 percentage points. But of special concern are the declines in participation among those who traditionally have been viewed in "prime working age." That is, individuals in the 20 to 54 years of age.

The implication of these trends for the country are not good however. At the same time that we have accumulated a huge federal government debt, and continue to increase that debt, we have relatively fewer people working. Sometime in the future we'll have to pay the piper and, unlike Greece today, there will not be a Germany to save us.