Labor Force Participation Rate Continues To Slump
In the most recent employment report (March 2013), the BLS ("Bureau of Labor Statistics") revealed that the labor force participation rate is currently clocking in at 63.3%.
The lowest labor force participation rate on record? 58.1% (December of 1954).
The highest labor force participation rate on record? 67.3% (January, February, March, April of 2000).
That's right - the United States saw its labor force participation rate top out at over 67% in the mid '90s / early '00s, and it has been downhill ever since.
A difference of 4% in the labor force participation rate is a staggering number when you consider how the rate is calculated.
First off, take the civilian noninstitutional population, which consists of people over the age of 16 who are not institutionalized or on active duty in the Armed Forces. In March of 2013, this number was 244,995,000.
Second, take the civilian labor force, which is comprised of the people in the civilian noninstitutional population who currently have a job or are active seeking work. In March of 2013, this number was 155,028,000.
So, in March of 2013, 155,028,000 (civilian labor force) divided by 244,995,000 (civilian noninstitutional population) produced a labor force participation rate of 63.3%.
In order to have a labor force participation rate of 67.3%, the civilian labor force in the United States would need to grow by nearly 10 MILLION people (9,853,635 people to be exact).
Now, the labor force participation rate has been declining for a while now - we can't entirely blame this on the "Great Recession".
The rate declined from a high of 67.3% in the early '00s down to around 66% before the end of 2007. After the start of the "Great Recession", the bottom really fell out, and the rate dropped precipitously to its current level of 63.3%.
As mentioned, the all-time low for the rate was 58.1% (this statistic started being tracked in 1948).
The labor force participation rate slowly increased throughout the '70s, '80s and '90s, thanks, in large part, to the increased participation of women in the work force.
The trend has reversed in recent years, and the labor force participation rate is currently the lowest it has been in approximately 30 years.
Filed under: General Knowledge