Subject: Special Report: The Transformation of the US Labor Force and Implications for US Consumption
From: "David Hale" <[email-masked]>
To: "R. Hunter Biden" <[email-masked]>
Date: Fri, 6 Jun 2014 11:45:13 -0700 (PDT)

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Dear R. Hunter,

Our director of research, Mark Zoff, has produced the attached special 
report, "The Transformation of the US Labor Force and Its Implications 
for Consumption", which details how the US labor force has evolved in 
recent decades and analyzes how this has affected and could affect 
income and consumption growth among different age cohorts.  Some key 
points:

US consumption growth could continue to be tepid if recent trends in 
income growth, wage share of GDP, household debt, and productivity do 
not reverse in the future

People under 45 years in age are increasingly constrained in their 
ability to consume at rates seen in the past while increasingly affluent 
older workers are not picking up the slack

The workforces in traditional white and blue collar sectors are growing 
older more quickly than the national average while the retail and 
hospitality workforces are more youthful

Only households headed by people 55 years or older have seen real gains 
in their net worth in the previous two decades

Younger people are increasingly opting out of participating in the labor 
force while older people are staying in the labor force

The implications of this research are negative for growth in the US 
economy for some time to come barring an exogenous event, such as war or 
another major asset bubble, that reverses these trends. Consumption has 
been responsible for three-quarters of US GDP growth during the past two 
decades, so any decline in consumption growth will have negative 
ramifications for GDP growth. While many of the older workers currently 
working in white and blue collar sectors will eventually retire, there 
is a reasonable risk that these jobs may be replaced with automated 
processes and machines instead of new workers.

As always, we welcome any questions or comments you may have.

With all best wishes,

David Hale 

Chairman

David Hale Global Economics, Inc.

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