World Economy Sends Up Flares as Manufacturing Slump Hits U.S. [feedly]

World Economy Sends Up Flares as Manufacturing Slump Hits U.S.
https://www.bloomberg.com/news/articles/2019-10-01/asia-factory-sentiment-remains-brittle-ahead-of-u-s-china-talks

text only content:

The global economy flashed clearer warning signs on Tuesday as a wave of data showed manufacturing stuck in a slump, exports falling and sentiment sliding.

In the U.S., a closely watched factory index unexpectedly dropped to the lowest since 2009 -- driving down stocks as well as yields on Treasuries. Meanwhile the specter of deflation resurfaced as South Korea, a bellwether for international trade, reported a drop in consumer prices and the Reserve Bank of Australia cut its interest rate to a record low.  With a trade war between the U.S. and China still raging, industry executives from Germany to Japan and Russia complained of contracting business, and the World Trade Organization cut its forecast for commerce to the lowest in a decade.

Fresh Warning

The World Trade Organization cuts the outlook for global commerce

Source: WTO

Although a measure of Chinese manufacturing improved and consumer spending globally has largely held strong, the overall tone sounded of the world economy failing to rebound amid mounting trade tensions and rising Brexit risks.

That leaves the U.S. and China and also the U.K. and European Union under pressure to resolve their differences, with central bankers and governments also having to find ways to support demand.

"There can be few precedents since the 1930s of global growth prospects being affected so significantly by trade policy disruptions," Fitch Ratings Ltd. Chief Economist Brian Coulton said.

Bloomberg Economics: Market Indicators Flash Recession Risk Warning

UBS Group AG economists reckon global growth is tracking just 2.3% at the moment, almost a percentage point less than at the start of the third quarter. Those at Danske Bank are warning there is a 30% chance of a global recession in the next two years. A global manufacturing gauge improved slightly in September, but employment fell for a fifth month.

While trade tensions are part of the story, there are also industry-specific issues -- autos in Germany, semiconductors in South Korea -- adding to the hurdles.

German car-parts giant Continental AG last month laid out a sweeping restructuring plan that could affect as many as 20,000 jobs worldwide. Japan's Kawasaki Heavy Industries cut its forecasts, citing sales to chipmakers.

Central banks around the world are fighting the slowdown with new interest-rate cuts and monetary stimulus. But they are also ramping up calls on governments to jump in with fiscal measures, saying they can't do all the heavy lifting.

In the meantime, global bond investors are betting against a meaningful inflation pickup. Even with sovereign yields below zero, they are still piling into government debt, and so-called deflation trades are on the rise.


The latest purchasing managers indexes may reinforce those views. German manufacturers cut prices in September by the most in more than three years. In Japan, where manufacturing sentiment is declining, factories lowered selling prices for a fourth straight month. British companies warned of "Brexit uncertainty and clients routing supply chains away from the U.K."

Such an environment is worrying for central bankers in a world where inflation is already low and well short of targets. Consumer-price growth in the euro area slipped below 1% in September for the first time since 2016, falling further from the European Central Bank's goal.

Parts of the global economy still show resilience, and services are still growing. U.S.-China trade negotiations remain critical for the outlook, with a Chinese delegation set to visit Washington for talks this month aimed at hammering out a deal.

The decline in U.S. manufacturing is an "amber light on the dashboard," John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, said on Bloomberg Television. "The Fed is very likely to cut again at the end of October as a result of this and so long as the trade-war situation remains as an overhang."
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Warren Versus the Petty Plutocrats [feedly]

PK on politics has a less sterling accuracy than on economics, but he always sharp.

Warren Versus the Petty Plutocrats
https://www.nytimes.com/2019/09/30/opinion/elizabeth-warren-wealth-tax.html

text only version  if blocked by paywall

Remember when pundits used to argue that Elizabeth Warren wasn't likable enough to be president? It was always a lazy take, with a strong element of sexism. And it looks ridiculous now, watching Warren on the campaign trail. Never mind whether she's someone you'd like to have a beer with, she's definitely someone thousands of people want to take selfies with.

But there are some people who really, really dislike Warren: the ultrawealthy, especially on Wall Street. They dislike her so much that some longtime Democratic donors are reportedly considering throwing their backing behind Donald Trump, corruption, collusion and all, if Warren is the Democratic presidential nominee.

And Warren's success is a serious possibility, because Warren's steady rise has made her a real contender, maybe even the front-runner: While she still trails Joe Biden a bit in the polls, betting markets currently give her a roughly 50 percent chance of securing the nomination.

But why does Warren inspire a level of hatred and fear among the very wealthy that I don't think we've seen directed at a presidential candidate since the days of Franklin Delano Roosevelt?


On the surface, the answer may seem obvious. She is proposing policies, notably a tax on fortunes exceeding $50 million, that would make the extremely wealthy a bit less so. But delve into the question a bit more deeply, and Warren hatred becomes considerably more puzzling.

For the only people who would be directly affected by her tax proposals are those who more or less literally have more money than they know what to do with. Having a million or two less wouldn't crimp their lifestyles; most of them would barely notice the change.

At the same time, even the very wealthy should be very afraid of the prospect of a Trump re-election. Any doubts you might have had about his authoritarian instincts should have been put to rest by his reaction to the possibility of impeachment: implicit death threats against whistle-blowers, warnings of civil war and claims that members of Congress investigating him are guilty of treason.

And anyone imagining that great wealth would make them safe from an autocrat's wrath should look at the list of Russian oligarchs who crossed Vladimir Putin — and are now ruined or dead.

So what would make the very wealthy — even some Jewish billionaires, who should have a very good idea of the likely consequences of right-wing dominance — support Trump over someone like Warren?


There is, I'd argue, an important clue in the "Obama rage" that swept Wall Street circa 2010. Objectively, the Obama administration was very good to the financial industry, even though that industry had just led us into the worst economic crisis since the 1930s. Major financial players were bailed out on lenient terms, and while bankers were subjected to a long-overdue increase in regulation, the new regulations have proved fairly easy for reputable firms to deal with.

Yet financial tycoons were furious with President Barack Obama because they felt disrespected. In truth, Obama's rhetoric was very mild; all he ever did was suggest that some bankers had behaved badly, which no reasonable person could deny. But with great wealth comes great pettiness; Obama's gentle rebukes provoked fury — and a huge swing in financial industry political contributions toward Republicans.

The point is that many of the superrich aren't satisfied with living like kings, which they will continue to do no matter who wins next year's election. They also expect to be treated like kings, lionized as job creators and heroes of prosperity, and consider any criticism an unforgivable act of lèse-majesté.

And for such people, the prospect of a Warren presidency is a nightmarish threat — not to their wallets, but to their egos. They can try to brush off someone like Bernie Sanders as a rabble-rouser. But when Warren criticizes malefactors of great wealth and proposes reining in their excesses, her evident policy sophistication — has any previous candidate managed to turn wonkiness into a form of charisma? — makes her critique much harder to dismiss.

If Warren is the nominee, then, a significant number of tycoons will indeed go for Trump; better to put democracy at risk than to countenance a challenge to their imperial self-esteem. But will it matter?

Maybe not. These days American presidential elections are so awash in money that both sides can count on having enough resources to saturate the airwaves.

Indeed, over-the-top attacks from the wealthy can sometimes be a political plus. That was certainly the case for F.D.R., who reveled in his plutocratic opposition: "They are unanimous in their hate for me — and I welcome their hatred."

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So far Warren seems to be following the same playbook, tweeting out articles about Wall Street's hostility as if they were endorsements, which in a sense they are. It's good to have the right enemies.

I do worry, however, how Wall Streeters will take it if they go all out to defeat Warren and she wins anyway. Washington can bail out their balance sheets, but who can bail out their damaged psyches?

The Times is committed to publishing a diversity of letters to the editor. We'd like to hear what you think about this or any of our articles. Here are some tips. And here's our email: letters@nytimes.com.

Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.

Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman

A version of this article appears in print on Oct. 1, 2019, Section A, Page 23 of the New York edition with the headline: Warren vs. The Petty Plutocrats. Order Reprints | Today's Paper | Subscribe

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The WTO slashed its global trade forecast in half — citing Trump's trade war, Brexit, and shifting monetary policy [feedly]

Even though trade may only be 15% of GDP in the US, volatility is having a serious impact on forecasts, which impacts investment.

The WTO slashed its global trade forecast in half — citing Trump's trade war, Brexit, and shifting monetary policy
http://markets.businessinsider.com/news/stocks/the-wto-slashed-its-global-trade-forecast-in-half-citing-trump-s-trade-war-brexit-and-shifting-monetary-policy-1028567667?utm_source=feedly&utm_medium=webfeed

• The World Trade Organization (WTO) just cut its global trade forecasts on Tuesday, saying that "escalating trade tensions and a slowing global economy," led to its economists downgrading their forecasts for 2019. 
• The WTO said that the volume of merchandise trade will only increase by 1.2% this year down from the 2.6% prediction from earlier this year.
• It also said that trade volumes will increase by 2.7% next year, down from 3% in April. 
• The WTO specifically cited trade tensions, Brexit, and Fed rate cuts as reasons for its bearish outlook. 
• View Markets Insider's homepage for more stories. 

---

The World Trade Organization (WTO) has just cut its global trade forecasts, blaming political uncertainty around the US-China trade war, Brexit and shifting monetary policy. 

The WTO cut its forecast for global trade to increase by just 1.2% this year, dropping from the April forecast of 2.6%. It also cut next year's forecast from 3% to 2.7%. 

The statement released Tuesday morning was a scathing report on the damages to global trade because of political uncertainty, with the director-general pushing for more cooperation between trading partners. 

"Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity enhancing investments that are essential to raising living standards," said WTO Director-General Roberto Azevêdo in a press release.

"The darkening outlook for trade is discouraging but not unexpected. Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity enhancing investments that are essential to raising living standards," Azevêdo said. "Job creation may also be hampered as firms employ fewer workers to produce goods and services for export."

WTO

The WTO highlighted in the report that world trade was slowed dramatically in 2019, and that "monthly economic indicators provide some worrying clues about the current and future trajectory of world trade," such as PMI. 

Earlier on Tuesday, Europe's PMI manufacturing dropped to its lowest level since the eurozone crash in 2012. 

The statement from the WTO also specifically mentioned trade conflicts, though he did not name the US-China conflict, US-EU or the Japan-Korea trade wars that are ongoing, as well as citing Brexit and changing monetary policy. 

"Further rounds of tariffs and retaliation could produce a destructive cycle of recrimination. Shifting monetary and fiscal policies could destabilize volatile financial markets," it said in the report.

"A sharper slowing of the global economy could produce an even bigger downturn in trade. Finally, a disorderly Brexit could have a significant regional impact, mostly confined to Europe" the WTO added.

Recently major central banks have been cutting rates, with the Federal Reserve and the European Central bank cutting interest rates to try and stimulate the economy. 

The statement ended by saying "the balance of risk remains on the downside, with trade disputes, financial volatility and geopolitical tensions providing potential triggers for a steeper downturn."

WTO

NOW WATCH: Animated map shows where American accents came from

See Also:

• Costco workers reveal 33 things they'd love to tell shoppers, but can't
• McDonald's employees share the 4 menu items they'd never eat
• The impeachment inquiry into Trump has rattled global markets and poses 'a serious setback' to resolving the trade war

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chart of the weekMobile Money Spreads to Asia [feedly]

Interesting post on the spreading phenomenon of "mobile money"

chart of the weekMobile Money Spreads to Asia
https://blogs.imf.org/2019/09/30/mobile-money-spreads-to-asia/

By Esha Chhabra and Bidisha Das

Thanks to mobile money, any person with a basic phone can now make cash transfers, pay bills, and send money to family members abroad without having a bank account. This is a game-changing innovation, particularly for the world's poor as it is easy and cheap.

Our chart of the week from the IMF's Financial Access Survey shows the growth in mobile money accounts across regions. While mobile money continues to grow in its epicenter in Africa, it's also taking off in Asia. Mobile money is just one aspect of the survey, which also provides a wealth of information on the access to and use of basic financial services, including breakdowns by gender.

Asia's mobile money uptake

Over the past five years, mobile money has gained traction in South Asia, which is experiencing an average annual growth rate of 46 percent in mobile money accounts—the highest across all regions. Bangladesh, Indonesia, and Pakistan are a few examples of countries experiencing high mobile money growth in Asia.

Over the past five years, mobile money has gained traction in South Asia.

Mobile money services grew early on in sub-Saharan Africa because some countries lacked deep banking penetration. The launch of M-PESA in Kenya in 2007 completely transformed the way the unbanked access financial services.

After a rapid expansion in Kenya, Tanzania, and Uganda, mobile money has spread to other parts of the region. In fact, sub-Saharan Africa still leads in the number of mobile money accounts and in some countries, mobile money accounts now surpass bank accounts.

Mobile money also continues to grow in some fragile states.

Factors behind rapid uptake in new frontiers

In Afghanistan, for example, where only 200 out of 1,000 adults have bank accounts but more than 80 percent of the population has access to a cellular phone, mobile money is picking up. The value of mobile money transactions grew by a factor of four in the past five years—to 1.2 percent of GDP in 2018.

The ability of mobile money services to reach remote customers has contributed to this growth. Mobile network operators employ agents—typically small, local retail stores—to offer services even in remote areas where banks have limited reach.

In Afghanistan, there are, on average, three mobile money agents compared to one or less automated teller machine or commercial bank branch every 1,000 square kilometres. This expansion in mobile money services has helped meet a significant pent-up demand for financial services.

With mobile money becoming more pervasive, governments will need to create regulations to protect new customers against fraud and liquidity risks—the inability of service providers to return funds on demand.

Related Links:
2019 Financial Access Survey Results
2019 Financial Access Survey Trends and Developments

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Barry Eichengreen : The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era http://books.g... [feedly]

Excerpts from Eichengreen's book, and Interesting take on "populism" and "bellicose nationalism", and political economy conclusions one may draw on its bourgeois remedies in the face of "revolutionary Marxism" as opposed to where the latter had no established base. 

The excerpt below is from Brad DeLong's Blog.

Barry Eichengreen : The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era http://books.g...
https://www.bradford-delong.com/2019/09/barry-eichengreen-_the-populist-temptation-economic-grievance-and-political-reaction-in-the-modern-era_-in-the-unite.htmlBarry Eichengreen: The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era http://books.google.com/?isbn=0190866284: "In the United States, the United Kingdom, and Europe... the reaction of voters against the political establishment, nationalist and racialist sentiment directed against foreigners and minorities, and a yearning for forceful, charismatic leadership, this something, whatever we call it, is not new...

...The characteristic economic policies of populist leaders are damaging and destructive, and the impact of populists on political institutions is corrosive. The attitudes they animate bring out the worst in their followers. Populism arrays the people against the intelligentsia, natives against foreigners, and dominant ethnic, religious, and racial groups against minorities. It is divisive by nature. It can be dangerously conducive to bellicose nationalism...

Populism is activated by the combination of economic insecurity, threats to national identity, and an unresponsive political system, but... can be quelled by economic and political reforms that address the concerns of the disaffected... reinvigorate economic growth... hope that their lives will be as good as those of their parents... that their lifetime of labor is respected and rewarded. Populist revolts rarely arise in good economic times...

Equally important is that the fruits of that growth be widely shared and that individuals displaced by technological progress and international competition are assured that they have social support and assistance on which to fall back.... This is not a novel formula. But if its elements are commonplace, they are no less important for that..

Modern societies show disturbingly little capacity to respond... struggle to develop a political consensus around the desirability of implementing and, no less important, adequately financing programs that compensate the displaced and help them adjust to new circumstances...

The United States glorifies income disparities. With a culture that celebrates the entrepreneur and decries government intervention, it does little to restrain market forces. But at the same time as it encourages creative destruction, it provides little assistance to the casualties of what is destroyed. It insists that workers displaced by globalization and technical change should fend for themselves and leave government out of it. When times are tough, this mix of policies and attitudes is all but guaranteed to produce high anxiety about income security, discomfort about prevailing levels of inequality, and anger at the political class. In part these attitudes are a product of the distinctive American ideology of individualism and market fundamentalism...

Resistance to federal government intervention also reflected the country's historic division between black and white and between North and South. From Reconstruction through the civil rights movement, southern businessmen and farmers opposed federal government involvement in the economy for fear that it would compromise control of their black labor force. In the 1930s they opposed New Deal programs out of concern that these would interfere with their established way of doing business and the prevailing social order. White southerners were not opposed to the decentralization of social programs or to receiving federal matching funds so long as the design or at least the administration of those programs devolved to the states. Such devolution was consequently a legacy of the New Deal, one that endures even today, for example in the power of states to decide whether to expand Medicaid to cover low-income households under the Affordable Care Act, or Obamacare...

The contradictory nature of populism in the United States is no anomaly. People displaced by globalization and technical change are distressed about not sharing in the benefits of an expanding economy and by their government's failure to do more about it, leaving them susceptible to the siren song of populism. But their views are also informed by an ideology that tells them government is the problem, not the solution. One can't help but think of the constituent who allegedly warned Representative Robert Inglis of South Carolina, at a town hall meeting, to "keep your government hands off my Medicare," not realizing that Medicare was a government program. Herein lies the appeal of Donald Trump, who gives voice to the anger of the masses over their economic condition and the failure of government to address their problems, all in the manner of a populist, but who also opposes more spending on social insurance, more trade adjustment assistance, and higher taxes on the rich, all in the manner of a committed Randian. This is not a combination that bodes a happy ending...

This idea that the fundamental goal of policy is to regulate the economy in order to correct its visible defects and alter the distribution of income in ways that make for solidarity and social justice is not something that is spoken out loud by the leaders of either U.S. political party, much less by their more Randian followers. It developed in Europe as an alternative to more radical working-class movements hostile to the market economy and to representative democracy, notably revolutionary Marxism—movements that never gained the same foothold in the United States. It was an effort to get European societies to pull together in order to avoid splintering apart...

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Trade: The Perils of Overstating Benefits and Costs [feedly]

Trade is important, but still only 15% of US GDP

Trade: The Perils of Overstating Benefits and Costs
http://conversableeconomist.blogspot.com/2019/09/trade-perils-of-overstating-benefits.html

A vibrant and healthy economy will be continually in transition, as new technologies arise, leading to new production processes and new products, and consumer preferences shift. In addition, some companies will be managed better or have more motivated and skilled workers, while others will not. Some companies will build reputation and invest in organizational capabilities, and others will not.  International trade is of course one reason for the process of transition.

But international trade isn't the main driver of economic change--and especially not in a country like the United States with a huge internal market. In the world economy, exports and imports--which at the global level are equal to each other because exports from one country must be imports for another country--are both about 28% of GDP. For the US economy, imports are about 15% of GDP and exports are 12%, which is to say that they are roughly half the share of GDP that is average for other countries in the world.

However, supporters of international trade have some tendency to oversell its benefits, while opponents of international trade have some tendency to oversell its costs. This tacit agreement-to-overstate helps both sides avoid a discussion of the central role of domestic policies both in providing a basis for growth and for smoothing the ongoing process of adjustment.

Ernesto Zedillo Ponce de León makes this point in the course of a broader essay on "The Past Decade
and the Future of Globalization," which in a collection of essays called Towards a New Enlightenment? A Transcendent Decade (2018, pp. 247-265). It was published by Open Mind, which in turn is a nonprofit run by the Spanish bank BBVA. He writes (boldface type is added by me):

The crisis and its economic and political sequels have exacerbated a problem for globalization that has existed throughout: to blame it for any number of things that have gone wrong in the world and to dismiss the benefits that it has helped to bring about. The backlash against contemporary globalization seems to be approaching an all-time high in many places including, the United States.

Part of the backlash may be attributable to the simple fact that world GDP growth and nominal wage growth—even accounting for the healthier rates of 2017 and 2018—are still below what they were in most advanced and emerging market countries in the five years prior to the 2008–09 crisis. It is also nurtured by the increase in income inequality and the so-called middle-class squeeze in the rich countries, along with the anxiety caused by automation, which is bound to affect the structure of their labor markets.
Since the Stolper-Samuelson formulation of the Heckscher-Ohlin theory, the alteration of factor prices and therefore income distribution as a consequence of international trade and of labor and capital mobility has been an indispensable qualification acknowledged even by the most recalcitrant proponents of open markets. Recommendations of trade liberalization must always be accompanied by other policy prescriptions if the distributional effects of open markets deemed undesirable are to be mitigated or even fully compensated. This is the usual posture in the economics profession. Curiously, however, those members of the profession who happen to be skeptics or even outright opponents of free trade, and in general of globalization, persistently "rediscover" Stolper-Samuelson and its variants as if this body of knowledge had never been part of the toolkit provided by economics.

It has not helped that sometimes, obviously unwarrantedly, trade is proposed as an all-powerful instrument for growth and development irrespective of other conditions in the economy and politics of countries. Indeed, global trade can promote, and actually has greatly fostered, global growth. But global trade cannot promote growth for all in the absence  of other policies. 

The simultaneous exaggeration of the consequences of free trade and the understatement—or even total absence of consideration—of the critical importance of other policies that need to be in place to prevent abominable economic and social outcomes, constitute a double-edged sword. It has been an expedient used by politicians to pursue the opening of markets when this has fit their convenience or even their convictions. But it reverts, sometimes dramatically, against the case for open markets when those abominable outcomes—caused or not by globalization—become intolerable for societies. When this happens, strong supporters of free trade, conducted in a rules-based system, are charged unduly with the burden of proof about the advantages of open trade in the face of economic and social outcomes that all of us profoundly dislike, such as worsening income distribution, wage stagnation, and the marginalization of significant sectors of the populations from the benefits of globalization, all of which has certainly happened in some parts of the world, although not necessarily as a consequence of trade liberalization.

Open markets, sold in good times as a silver bullet of prosperity, become the culprit of all ills when things go sour economically and politically. Politicians of all persuasions hurry to point fingers toward external forces, first and foremost to open trade, to explain the causes of adversity, rather than engaging in contrition about the domestic policy mistakes or omissions underlying those unwanted ills. Blaming the various dimensions of globalization—trade, finance, and migration—for phenomena such as insufficient GDP growth, stagnant wages, inequality, and unemployment always seems to be preferable for governments, rather than admitting their failure to deliver on their own responsibilities. 
Unfortunately, even otherwise reasonable political leaders sometimes fall into the temptation of playing with the double-edged sword, a trick that may pay off politically short term but also risks having disastrous consequences. Overselling trade and understating other challenges that convey tough political choices is not only deceitful to citizens but also politically risky as it is a posture that can easily backfire against those using it.

The most extreme cases of such a deflection of responsibility are found among populist politicians. More than any other kind, the populist politician has a marked tendency to blame others for his or her country's problems and failings. Foreigners, who invest in, export to, or migrate to their country, are the populist's favorite targets to explain almost every domestic problem. That is why restrictions, including draconian ones, on trade, investment, and migration are an essential part of the populist's policy arsenal. The populist praises isolationism and avoids international engagement. The "full package" of populism frequently includes anti-market economics, xenophobic and autarkic nationalism, contempt for multilateral rules and institutions, and authoritarian politics. ... 

Crucially, for globalization to deliver to its full potential, all governments should take more seriously the essential insight provided by economics that open markets need to be accompanied by policies that make their impact less disruptive and more beneficially inclusive for the population at large.

Advocates of globalization should also be more effective in contending with the conundrum posed by the fact that it has become pervasive, even for serious academics, to postulate almost mechanically a causal relationship between open markets and many social and economic ills while addressing only lightly at best, or simply ignoring, the determinant influence of domestic policies in such outcomes.

Blaming is easy, and blaming foreigners is easiest of all. Proposing thoughtful domestic policy with a fair-minded accounting of benefits and costs is hard. 

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Tim Taylor: Employment Patterns for Older Americans [feedly]

Employment Patterns for Older Americans
http://conversableeconomist.blogspot.com/2019/09/employment-patterns-for-older-americans.html

Americans are living longer, and also are more likely to be working in their 60s and 70s. The Congressional Budget Office provides an overview of some patterns in "Employment of People Ages 55 to 79" (September 2019). CBO writes:

"Between 1970 and the mid-1990s, the share of people ages 55 to 79 who were employed—that is, their employment-to-population ratio—dropped, owing particularly to men's experiences. In contrast, the increase that began in the mid-1990s and continued until the 2007–2009 recession resulted from increases in the employment of both men and women. During that recession, the employment-to-population ratio for the age group overall fell, and the participation rate stabilized—with the gap indicating increased difficulty in finding work. The ensuing gradual convergence of the two measures reflects the slow recovery from the recession. The fall in the employment of men before the mid-1990s, research suggests, resulted partly from an increase in the generosity of Social Security benefits and pension plans, the introduction of Medicare, a decline in the opportunities for less-skilled workers, and the growth of the disability insurance system. Although those factors probably also affected women, the influence was not enough to offset the large increase in the employment of women of the baby-boom generation relative to those of the previous generation, most of whom were not employed."

Here are some underlying factors may help in understanding this pattern. If one breaks down the work of the elderly by male/female and by age groups, then it becomes clear that while men ages 55-61 are not more likely to be working, the other groups are. An underlying reason here is that women who are now ages 55 and older were more likely to be in the (paid) workforce earlier in life than women who were 55 and older back in 1990. Thus, part of the rise in work of older women just reflects more work earlier in life, carried over to later in life.  But

One possible reason for people working older in life can be linked to rising levels of education: that is, people with more education are more likely to have jobs that are better paid and involve less physical stress, and thus more likely to keep working. However, it's interesting that the rise in employment share for males ages 62-79 is about the same in percentage point terms for different levels of education; for females, the increase in employment share for this age group is substantially  higher for those with higher levels of education.

There's an interesting set of questions about whether working longer in life should be viewed a good thing. If the increase is due to those have jobs that they find interesting or rewarding and who want to continue working, then that seems positive. However, it's tempting to feel that if people who had their jobs but work longer primarily just because they need or want the money, and they would otherwise be financially insecure, then working longer in life is potentially more troublesome.

From this perspective, one might argue that it would be more troubling if the rise in employment among the elderly was concentrated in those with lower education levels --who on average may have less desirable jobs. But if the rise in employment among the elderly is either distributed evenly across education groups (males) or happens more among the more-educated (females), then it's harder to make the case that the bulk of this higher work among the elderly is happening because of low-skilled workers taking crappy jobs under financial pressure.

It's also true that the share of older people reporting that their health is "very good/excellent" has been rising in the last two decades, and the share reporting only "good" has been rising too. Conversely, the share reporting that their health is "fair/poor" has been falling for both males and females. Again, this pattern suggests that some of the additional work of the elderly is happening because a greater share of the elderly feel more able to do it.

One other change worth mentioning is that Social Security rules have evolved in a way that allows people to keep working after 65 and still receive at least some benefits. The CBO explains:

"Changes in Social Security policy that relate to the retirement earnings test (RET) have made working in one's 60s more attractive. The RET specifies an age, an earnings threshold, and a withholding rate: If a Social Security claimant is younger than that age and has earnings higher than the specified threshold, some or all of his or her retirement benefits are temporarily withheld. Those withheld benefits are at least partially credited back in later years. Over time, the government has gradually made the RET less stringent by raising earnings thresholds, lowering withholding rates, and exempting certain age groups. For instance, in the early 1980s, the oldest age at which earnings were subject to the RET was reduced from 71 to 69, and in 2000, that age was further lowered to the FRA. (In 2000, the FRA was 65, and it rose to 66 by 2018.) Lowering the oldest age at which earnings are subject to the RET allowed more people to claim their full Social Security benefits while they continued working."

The question of how long in life life someone "should" work seems to me an intensely personal decision, but a decision that will be influenced by health, job options, pay, Social Security rules, rules about accessing retirement accounts and pensions, and more. But broadly speaking, it seems right to me that as Americans live longer and healthier, a larger share of them should be remaining in the workforce. The pattern of more elderly people working is also good news for the financial health of Social Security and the broader health of the US economy.  

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