Labor Force Participation is at a Forty Year Low

Blog Post - Labor Force Participation is at a Forty Year Low

 

Since 2009, an astonishing 13,128,000 people have left the work force.

* People who went on disability make up 20.0% of those who left the labor force. It's never been easier to receive disability payments, and as a result the number of people receiving payouts from the government has skyrocketed.

* People who retired make up 40.4% of those who left the labor force. The huge baby boomer generation, born after World War II, has reached retirement age. They're moving into the expensive government entitlement programs by the millions, putting the budget under considerable strain now and for years to come.

* People aged 16 to 64 with no disability make up 39.6% of those who left the labor force. This is perhaps the most alarming number. Able bodied, working aged people had been the life blood of the economy. But now they are becoming more and more likely to drop out of the work force altogether, leaving fewer taxpayers to shoulder the burden of an ever-expanding government. A lack of well paying middle class jobs, new laws making it easier to get healthcare without employment, higher wage floors that make it increasingly difficult for low skilled labor to find jobs, and ready access to cheap college loans have all played a role in keeping people out of the job market.

The bottom line is that fewer people are working today than at any point in at least a generation. This lower labor force participation rate presents a challenge for underfunded programs like social security, which rely on new workers to pay into it so that retiring baby boomers can receive their promised benefits, and hinders economic growth. Policies incentivizing work and job creation, such as lower taxes and fewer regulations, will be crucial in reversing the trend.

SOURCES: https://research.stlouisfed.org/fred2/series/LNU05000000

https://research.stlouisfed.org/fred2/series/LNU05076940

https://research.stlouisfed.org/fred2/series/LNU05076945

https://research.stlouisfed.org/fred2/series/LNU05076955

https://research.stlouisfed.org/fred2/series/LNU05076960

https://research.stlouisfed.org/fred2/series/LNU05075379

https://research.stlouisfed.org/fred2/series/LNU05075600

https://research.stlouisfed.org/fred2/series/LNU05026646

 

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