Labor force participation

The labor force participation rate is way down. Fewer people of working age are working or looking for work than were in 1979. This has to be taken into account when looking at the unemployment rate. If as many people as were working in 2008 were looking for work now, the unemployment rate would be far higher. Some have retired; some have gone on disability; some are getting paid under the table; some are raising their children.

But what exactly is the labor force participation rate supposed to be, 60%, or 90%, and why? I remember the seventies. Moving from an economy in which industrial jobs supported middle class families, to an economy in which whatever men and women are left in the middle class work one or two ill-paid service jobs and rely on the earned income credit or other government assistance? That has been a lousy deal for everyone but the HR managers. It’s not clear to me that fewer, better-paid jobs is a bad idea, especially if those jobs encourage middle class families to form and thrive. Maybe we should ask the feminists and social scientists what they recommend, and then do the opposite.

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2 thoughts on “Labor force participation

  1. Right. I’ve long been struck by the disconnect between what any sane individual would want and the way these made-up statistics are used. Wouldn’t everyone want to have the wherewithal be able to not work for a wage if they chose? Many people would love to retire young. Yet ALL reasons for not working are lumped together in those participation numbers. What we might want to know is how many people who want jobs gave up. Even that’s not a fine enough slice – a ex-CEO might want a job, but be unwilling to take one beneath his presumed dignity, and so give up.

    Labor force participation is, I suppose, near 100% among peasant farmers and hunter-gatherers, while work is something of a hobby to the very wealthy.

    • One category that I’m very glad of is men who took an early buyout and now work with a local church to maintain a disaster-relief trailer. Instead of hanging out at the coffee shop, (well, in addition to hanging out at the coffee shop) they’re traveling to tornado and flood sites to clean up and rebuild. Except on Monday’s, when they work at the charity food pantry. We’d be better off with a good many more of these retirees, and fewer assistant HR managers in charge of diversity outreach.

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