The Incredible Shrinking Work Force

When unemployment fell to 8.6 percent last month, its lowest rate in two-and-a-half years, some newspapers hailed the number as a sure sign that the recovery is back on track. But when you dig into the numbers behind the numbers, a darker picture comes into focus. It's not just that jobs are growing. It's that the labor force is shrinking.

The Economic Policy Institute captures the incredible shrinking work force in a chart today that shows the share of the population employed last month--58.5 percent-- is the same as when the unemployment rate peaked. Growth in employment has barely kept pace with the growth of the working-age population, they report.

Who's dropping out of the labor force? Perhaps surprisingly, it's mostly the people who didn't drop out of high school. And the drop-outs are accelerating.


It would be interesting to see this broken down by age to determine if most of the drop-outs are retirees, or women choosing to stay home with their children, or otherwise discouraged middle-age men and women.

I've said before that as a general rule, the more you learn, the more you earn, and the more likely you are to be employed. Unemployment is highest among the least educated and lowest for the most educated (see graph below). So it's interesting that worker participation in the last two years hasn't followed the same trend. Instead, college graduates have dropped out of the labor force at a higher rate than non-high school graduates; although that's partly because college graduates started at a higher worker participation rate.

Figure01-earnings by degree.gif

>

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In