Meanwhile, the share of the working age native born population holding a job has fallen from 74 to 68 percent, and many have not made the effort to acquire the skills necessary to land a good paying job in a quickly changing economy and labor market.
Baby boomer retirements are not appreciably driving down the adult employment rate—Americans between the ages 65 to 69 working has risen from 23 to 32 since 2000. It’s prime working age Americans that are not showing up—for example, 1 in 6 adult males between ages 25 and 64 is not working.
Twenty-six million Americans are working part-time, many owing much to poor economic conditions and government disincentives to work full time. Adding in the adults working part-time that want full time work but can’t find it, and adults not currently in the working force but who say they would return were conditions better, and the unemployment rate rises from 6.3 to more than 12 percent.
These forces combine to cap wages for workers making goods and services that primarily serve U.S. markets and compete with imports, while wages rise for workers with skills needed in industries selling products in global markets, such as in advanced manufacturing, international finance and a broad range of technology services.
It should come as no surprise then that the average family's real buying power continues to drop even as the gap between the rich and the average working family continues to widen.
Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.