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Minnesota Labor Force Participation Rate Reaches 29-Year Low

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The last time the labor force participation rate was this low in the Gopher State was July 1983

minnesotaseal10.jpgWhile new numbers released last week by the Department of Employment and Economic Development found Minnesota's seasonably adjusted unemployment rate ticked down to 5.6 percent for the month of April - tied for the lowest level for that metric since September 2008 - another number also crept downwards.

For the fourteenth consecutive month, the state's labor force participation rate fell or stagnated, coming in at 71.1 percent.

That marks the lowest participation rate the Gopher State has seen since July 1983, when Minnesota hit 71.1 percent on a gradual decades-long rise up to an eventual peak of 75.6 percent reached in March of 2001.

The labor force participation rate is the sum of employed and unemployed workers divided by the civilian non-institutional population at or over the age of 16.

Individuals in the civilian non-institutional population who are not considered to be in the labor force include retirees, students, people taking care of children or other family members, and, perhaps most telling in this economy, those who are neither working nor seeking employment.

Of course, as baby boomers continue to retire, the percentage of individuals who are not in the labor force is likely to increase, and that may account for part of the declining participation rate in the labor force.

Nationwide, the percentage of the U.S. population at or over the age of 65 increased every decade in the 20th Century before falling a bit in the 2000 Census and then rising again in 2010.

In Minnesota, the percentage of 65+ year-old individuals in the state reached a high of 12.9 percent after the 2010 Census after dipping from 12.5 percent to 12.1 percent during the 1990 to 2000 periods.

The current percentage of individuals at or over 65 years of age in Minnesota is virtually identical to the nationwide level of 13.0 percent.

But while the baby boomer variable and its attendant concerns brought about by fewer workers supporting more retirees has been a known quantity for demographers and economists for some decades, of particular concern today is the number of individuals outside the labor force who have simply stopped looking for work.

Because while the percentage of individuals 65 years or older are comprising a larger percentage of the population - a larger percentage of them are also remaining in the labor force.

For example, in 2011, 17.9 percent of 65+ year-old Americans were in the labor force - the highest level since 1964.

Minnesota's 71.1 percent labor force participation rate remains significantly higher than that of the nation overall, coming in at 63.6 percent last month which was the lowest level since December 1981.

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