Blame Demography for American's Weak Economic Growth

An article recently featured in The Economist explores the ways in which demographic changes have stifled economic growth. Many politicians have noticed the lagging economic growth rate following the greatest recession since WWII and are concerned that this may be the new norm. As The Economist explains, in the past three years the average growth rate stood at 2.2%, which is only slightly more than half the 4.2% averaged after the seven previous recessions. Part of the reason for the slower growth rate is that American's are facing unprecedented levels of debt and businesses are reluctant to spend, but changes in demography are also to blame for the slower recovery.
       The prime working ages are between 25 and 54 however the share of the population under 25 and above 54 continues to grow, causing a decline in overall labor-force participation rates. A few possible solutions are identified in the article to counteract this decline in labor force participation.  These include allowing more immigrants into America, reforming disability benefits to encourage those who are between the ages of 25 and 54 to go back to work, and raising the retirement age to keep workers in the labor force longer.

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