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While the mainstream media trumpets the “good news” of declining unemployment, this website has consistently drawn attention to the reason for that decline – America’s shrinking labor participation rate.

Last month that rate slipped to 62.8 percent for the second time this year – a level not seen since March of 1978. In South Carolina, where Nikki Haley is running for reelection as America’s “Jobs Governor,” the labor participation rate has slipped to an all-time low of 58.1 percent.

Many mistakenly claim this mass exodus from the labor force is the result of retiring workers … but it isn’t.

For proof, we turn to Zero Hedge – our founding editor’s favorite site on the internet – which has an informative post up (with charts) addressing the demonstrably false contention that America’s shrinking workforce is due to “old people.”

First, Zero Hedge looks at past projections from the government’s Bureau of Labor Statistics (BLS) – which prove that as recently as 2004 the agency was still “forecasting an increase in the overall participation rate” stretching into the future.

(Click to enlarge)

LFP chart

(Chart via)

Yeah … no projected retiree boom there. In fact this chart shows very clearly downgraded expectations due to economic conditions – not demographic trends – are responsible for the plummeting workforce.

In fact, as the rest of the Zero Hedge charts make painfully clear, older workers are faring better than most in the “New Normal.”

(To check out all of the data for yourself, click here).

The takeaway?

“Call it for what it is: millions of Americans of all ages, but mostly of prime working age, bailing out of the labor force by the millions because of equal or better opportunities elsewhere, opportunities which almost without exception are increasingly reliant on the ever more unsustainable and insolvent US welfare state,” the website concludes.

Exactly … which is why shrinking unemployment rates aren’t the economic elixir politicians would have you believe them to be.