https://chicago.suntimes.com/2022/6/10/23162642/best-photos-of-the-week-chicago
Overall labor force participation rate dropped by 1.5% in the pandemic and has recovered by 1%, still 0.5% below the recent history. However, the prime age category and several market segments no meet or exceed their pre-pandemic levels. Many details to consider.
Hispanic participation is now 1% higher than the 2018-19 average before the pandemic.
The Asian participation rate is up 1%.
The Black participation rate is up 0.5%.
The White participation rate dropped by 1.5% and has recovered by half: 0.75% better but 0.75% below history.
The Women’s participation rate has essentially recovered to the 2018-19 average but is a half point lower than the peak levels seen just before the pandemic.
The male participation rate dropped by 1.5% but has only recovered by 0.5%, a major 1% below pre-pandemic times. Part of this is due to the long-term downward trend. Part of this is a “mix variance” driven by the very high number of “baby boomers” moving into normal retirement age or retiring early.
https://www.richmondfed.org/publications/research/econ_focus/2021/q1/district_digest
Black men are back to their pre-pandemic participation rate.
Black women are more active labor force participants.
Hispanic men remain 1% below their pre-pandemic labor force participation rate.
Latino women have recovered to their historically high 61% participation ratio.
The White male participation rate dropped by 2% and has not recovered. Again, part is due to the long-run downward trend. Part is the aging of baby boomers into retirement. The remainder appears to be a response to the pandemic experience. “I’m not working unless you make it worth my while.”
White women remain a little below their 2018-19 average and three-quarters of a point behind their pre-pandemic peak level.
Teenage work participation has increased by 1.5% as entry level wages have risen.
College grad age participation rate has mostly recovered but remains 1% below the pre-pandemic high.
The retirement age workforce reduced its participation rate by 1.5% and has stayed there after a brief pseudo-recovery.
The prime age work force is now above even the elevated pre-pandemic level and a full one percent above the 2018-19 average. This is very good news, reflecting a strong economy an labor market.
Prime aged men have returned to the workforce.
Prime aged women are the “rock stars”, increasing their participation by 2% from 2019.
Non- high school graduates have added 1% to their labor force participation as real wages have increased.
High school graduate participation dropped by three points before recovering by two points.
Individuals with some post-high school education, but not a bachelor’s degree, are in the middle range of US educational attainment. Their labor force participation rate had declined by almost 3 points in the 6 years before the pandemic, dropped by another 2 points during the pandemic and has not “recovered”.
Labor force participation by bachelor’s degree holders was stable before the pandemic, then dropped by 2 points and has since recovered by a little more than 1 point, remaining about one-half point below the prior average.
Individuals with a high school degree or higher have displayed drops of 10 points in labor force participation across the last 30 years. Most of this change is due to the “mix variance” of lower participation by an increasingly older and retired population, but some reflects other causes.
Foreign born members of the US labor force have fully “returned to work” after the pandemic.
This participation growth improvement has taken place as the foreign-born population has increased to its trend growth rate.
https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=103862
In general, rural labor markets have grown more slowly in the last 15 years and shown greater reductions in labor force participation. Some of the increased labor force participation in the last 2 years may reflect a recovery from these declines.
https://www.bostonfed.org/publications/new-england-economic-conditions/2023/april.aspx
Most states show a similar pattern of labor force participation in the years before the pandemic, declining by 2-4% and afterwards recovering to their pre-pandemic level. California’s recovery has been slower. The New England states had an unusual increase in labor force participation before the pandemic and have not seen a major recovery after the pandemic.
Summary
Several sources decry the decline in the number of workers and the labor force participation rate, noting that it holds back the economic recovery and taints the 3.5% unemployment rate.
https://www.uschamber.com/workforce/understanding-americas-labor-shortage
Other sources point to the long-term downward trends in participation as the biggest factor, mostly driven by an aging workforce and recent higher than normal retirement rates. Pre-pandemic forecasts showed a one-half point decline in participation, matching the actual 2023 data. Detailed analysis shows that the age adjusted participation rate is a little higher. The core group, aged 25-54 population, also shows labor force participation recovery to relatively high pre-pandemic levels. So … there are demographic, racial, education, birth country, rural/urban, location and state differences in participation. There are opportunities for higher participation in a strong economy and labor market. However, the recovery from the pandemic is complete, reflecting this strong economy and labor market.
https://www.axios.com/2023/06/02/jobs-report-workers-prime-age-labor-force-participation
https://www.atlantafed.org/chcs/labor-force-participation-dynamics
Good News 