Where Did All the Workers Go?

The labor force is shrinking, and it will keep on shrinking for years to come.

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(Source: Bureau of Labor Statistics)

Who are these people who are ready and willing to work, but not quite unemployed or discouraged? According to the Labor Department, this includes a variety of Americans: people who wanted to work but were in poor health and therefore unable to work when they were surveyed, people who didn't have reliable transportation to work or couldn't make childcare arrangements, and people seeking training. But it's not that Americans are having childcare or transportation problems en masse; this grouping also includes people on disability, the ranks of whom have swollen over the last 30 years, as a recent NPR investigation highlighted. Toossi says she has noticed the effects of this uptick in labor force numbers.

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"The number of people on disability, especially among low-skilled people, has increased a lot. And once people are on disability, they basically are cornered in that," almost never leaving the rolls to come back to work, she says.

Retirees

Here's a paradox: older Americans are participating in the labor force at rates not seen since the 1960s, yet they are going to hold the labor force participation rate down for years to come. Below, a look at the rapid upswing in labor force participation for Americans 65 and older.

(Source: Bureau of Labor Statistics)

Longer life expectancy is one factor that has caused Americans to work further into their golden years, and the recession has accelerated this trend. Older workers are holding onto their jobs, hoping to beef up retirement funds, many of whose values plummeted during the downturn but have recently been turning up along with the markets.

[STUDY: Recession Widened Racial Gaps in Wealth, Income]

Still, the participation rate among these workers is still quite low compared to the rest of the population. And many more of them are about to leave: baby boomers are entering retirement age, and when that giant population bulge retires it will pull down the labor force participation rate considerably. The Labor Department predicts that the participation rate will be around 62.5 percent in 2020, a significant falloff from 67.1 in 2000 and 64.7 in 2010.

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