They're defining retirement as "you don't have a job and aren't looking for one", which is an egregious stretch of a definition. They're not financially independent or retired, they've given up looking for work worth doing.
One of the side effects of moving to a fluid labor market is that you can basically get a job whenever you want. Moreover, you're forced to, and you're forced to stay up-to-date with market conditions so you can get a new job at any time. If you have to make this bargain anyway, who's to say that those jobs need to be contiguous? Why not take a job paying $90K for two years, live as if you had a job paying $60K, and then take a year off to travel?
My wife and I both did variants of this (her: bond trader => Peace Corps, me: financial software => startup => Google => startup), but we took our downtime in socially sanctioned, labeled ways and so don't fit into the "retired" statistics. But what about, say, the friend of mine who interned on a salmon fishing boat, took a job in economic consulting, did a multi-year sex tour of Southeast Asia, and now runs a hedge fund there? Or the friend of mine who runs a profitable SaaS remotely and is now doing Hacker Paradise, traveling the world? Where do they fit into the employment statistics? "Retired" is a lot better descriptor than "disabled" or "staying at home".
The numbers in the BLS report were on the order of 1-2%; I could easily believe that 1-2% of 20-24 year olds are doing gap years, or have software businesses that generate passive income, or have worked for a year or two at a lucrative profession and now saved up enough to travel the world.
Is this essentially about people moving back in with family?
State welfare programs, section 8, food stamps, "earned income credit", medicaid, SSI, TANF, SNAP, etc. There's lots of aid in the US. Over 100m people nationally are on some level of means tested welfare. That's pushing one third of this nation. National spending accounts for $1T in welfare spending. That's slightly less than Mexico's entire GDP; a country of 122m.
http://object.cato.org/sites/cato.org/files/pubs/pdf/PA694.p...
The narrative of the US not having any welfare is asinine. In fact, the spending is staggering. When I lived in poorer neighborhoods in Chicago, most of my neighbors were on a fair amount of welfare to the point where they never had to bother getting a job. If you're willing to live in an urban area and live a modest lifestyle its largely trivial to game welfare benefits for a living.
>State welfare programs, section 8, food stamps, "earned income credit", medicaid, SSI, TANF, SNAP, etc. There's lots of aid in the US.
I question this response with the qualifier of "living off reasonably."
I'm certainly lucky enough not to need any of that, but from what I understand, it's barely subsistence existence.
For me, when I was growing up on food stamps and welfare as a refugee, I know that it wasn't a level of living my family wanted to settle at. Evidently, neither does most of the country. The assistance helped us get settled and avoid a situation that surely would have resulted in us being thrown to the streets.
For one, they could actually be looking at jobs but passively. i.e. if you check the newspaper or websites for jobs, but didn't apply to any, you're not counted as 'looking for a job', so you're not unemployed either even though you obviously are. Passive job search is not included in the figures.
Other than that, note that unemployment is measured in periods of 4 weeks. i.e. if you have a consulting gig for 8 months, and are then out of a freelance job for 5 weeks (after which you get another gig), and get interviewed during that time, you'd be unemployed, despite the fact you may have earned a normal annual income that year.
Anyway, that's just to say that unemployment numbers may be off. It doesn't answer your question yet.
But indeed there are also people who can't provide for themselves and are considered unemployed. A lot of them live at their parents, another significant chunk is simply living on debt. Creditcard debt is huge in the US.
Previous generations had two reasons to move out and rent on their own - marriage and health insurance. Nowadays Americans are marrying at much lower rate, and parents can keep kids on their insurance until the age 26.
So maybe this is the new normal, and the previous status quo of 20-something moving out and getting a job immediately was a distortion.