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Data Analysis

Labor Force Participation Rate and Employment-Population Ratio Below 1980 Levels

By Dr. Joe Webb
Published: October 9, 2014

 

What's made the economic recovery since June 2009 so intriguing has not been its below-history GDP growth rate, but also the deterioration in key measures of employment. The labor force participation rate has been declining as idled workers decide not to return to the workforce. The labor force counts only those working or seeking work. Employment is up, but not enough to outweigh the total exits. Another factor is that population continues to grow, and the employment-population ratio takes that into account. It's been basically flat (with a very slight upward slope) since the start of the recovery. Both are at lows not seen for 30 years. The robust economies of the 1980s and 1990s can be seen in the data, with a minor downturn during the mild early-1990s recession.

 

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