The size of America’s labor force declined last month. The labor force includes both people who are working or actively searching for employment. Though payrolls rose at a healthy pace, four hundred and thirty two thousand people left the workforce. That sent the participation rate to its lowest level since October nineteen seventy seven.
As pointed out by Bloomberg Business, the labor force participation rate has been trending down in recent years ever since Baby Boomers began to retire in larger numbers. But June’s decline was the sharpest in more than a year. Over the past decade, one point three five million workers entered the labor force each June on a not seasonally adjusted basis on average. That didn’t happen last month. Where did all the would-be workers go? There are a number of possible explanations.
First, the underlying data come from the Current Population Survey. That survey was conducted a bit earlier this June than is typical, which might mean that a smaller share of labor force gains were captured. It may also be that a high number of snow days extended the school year in certain locations, limiting the normal flow of people into the workforce. Or it could simply be that wages are not rising rapidly enough to draw people into the workforce.
