Where Have the Workers Gone?
It is good news that the private sector created 212,000 jobs in October, but the continuing decline in labor force participation is troubling. Another 932,000 people were listed as “Not in Labor Force” in October. The labor force participation rate declined by four tenths of a percentage point, bringing the rate to 62.8 percent
—the same level as in 1978.
The decline in the rate is greatest among African American men and teens. For white men aged 20 years and over, the rate declined by 0.4 percentage points. But for African American men, it declined by 1.1 percentage points. For white teens, the labor force participation rate rose by 0.1 percentage points. For black teens, it went down by 2.1 percentage points. The rate rose slightly for African American women.
It is understandable that people drop out of the labor force-stop looking for work-when unemployment is rising and they have become discouraged. But, since the employment rebound from the 2007-2009 recession began in March 2010, the labor-force participation rate has fallen for both men and women.
The sharp decline in the labor force participation rate should be a wake-up call for Congress and the president to put in place more policies that encourage job creation, particularly among low-skill Americans.
