Why 87 Million Americans Are Not Working
In December, the U.S. Bureau of Labor Statistics released its analysis about people not in the work force. The data includes people who neither worked nor looked for work in 2004 and 2014. The number of people not in the work force has increased since 2000; people do not work for several reasons including retirement, illness, home responsibilities, attending school, and more. Gender and age factor into the numbers.
For people in school or those who have home responsibilities, the withdrawal from the workforce might be temporary, but retirement continues to be the main reason that people are not working. However, an interesting phenomenon is that while many people are out of the work force for various reasons, many people who have reached the traditional retirement age are working longer.
A look at the numbers
An estimated 87.4 million people age 16 and up did not work or look for work at any time during 2014; 38.5 million of these people said that they did not work because they were retired. Regarding all respondants 16 years and older, 15.4% listed retirement as the reason for not working, and 13.9% reported this reason in 2004. In 2014, 6.5% of respondents cited illness as their reason for not working compared to 5.5% in 2004, and 6.4% listed school, versus 5.0% in 2004. While these three catgories went up, the percentage of people listing home responsibilities as their reason went down (5.4% versus 6% in 2004).
According to a Pew Research study from 2013, in homes with children, mothers are now the sole or primary breadwinner in four-in-ten households. The percentage of men age 25 to 54 listing home responsibilities as their primary reason for not working has only increased marginally from 2004 to 2014 (0.9% to 1.2%), and the percentage of women reporting this reason has stayed steady at 14.3%. So while many women are the primary breadwinners in their homes, the same percentage of those who were not working or looking for work listed home responsibilities as their primary reason for not working.
A growing number of students
According to the BLS study, the labor force nonparticipants’ percentage of the population (for people 16 years and older) grew from 31.3% to 35%. Age factored greatly into the numbers; the percentage of people age 16 to 19 who were not in the labor force increased significantly (51.5% in 2004 to 64.7% in 2014). School attendance was usually the reason that people in this age group were not working (46.1% in 2004 to 59.5% in 2014). The percentage of 20- to 24-year-olds not working increased from 21.4% to 27.3%, and listed school attendance as the main reason.
Gender also factored in. In 2014 11.5% of males age 25 to 54 were not in the labor force (versus 9.2% in 2004), and the largest percentage cited illness or disability as the reason (5.3% in 2004, and 6.0% in 2014). Men with more education were more likely to be part of the labor force for men age 25 to 54. According to the study, “21.2 percent of men with less than a high school diploma did not participate in the labor force in 2014, compared with 14.9 percent for high school graduates, 10.7 percent for those with some college or an associate’s degree, and 5.6 percent of male college graduates.”
Women are more often out of the work force today than a decade ago. In 2014 the percentage of women not working was 24.2% (as opposed to 21.9% in 2004). Women with less education were also more likely to be nonparticipants in the labor force. Also, like men, women with less education are more likely to list disability or illness as a reason for not working.
Why aren’t seniors retiring?
Retirement of course plays a large part as well. Interestingly, the percentage of people 65 years and older not in the labor force actually declined from 81.5% in 2004 to 77% in 2014. According to a CareerBuilder survey, 66% of workers age 60 and older are putting off retirement, but this is actually a decrease from the peak of 66% in 2010. The study also determined that women are more likely than men to delay retirement (71% versus 49%). Also, 7% of men age 60 or older believe they won’t ever be able to retire, but 18% of women feel the same.
The reasons that workers are delaying retirement include believing that they can’t retire (79%), needing the health insurance or benefits (61%), enjoying their job (49%), enjoying where they work (46%), and fearing retirement boredom (27%).
While many people are not working, some people are afraid to stop working. More older Americans are now staying at their jobs or continuing to work after traditional retirement age. At the same time, gender, disability, and schooling are also all affecting the work force. Many people are busy attending school or helping out at home and they cannot work; others are ill or disabled and are unable to. While many older people are putting off retirement longer, other people are not currently part of the work force for one of these many reasons.