With unemployment at a near-historic low, US policymakers might think they don't need to worry about the state of the American workforce. But they would be wrong: without far-reaching measures to expand opportunities for education and reskilling, severe skilled-labor shortages will become inevitable.
BERKELEY – Though the unemployment rate and jobless claims are currently lower than at any point since 1969, the US economy is still facing labor-market challenges that cannot be ignored. One stands out: the long-term decline in the US labor-force participation rate (LFPR) – a key factor in future growth.
In the late 1960s, 97% of all prime working-age men (25-54) participated in the labor force, but by 2018 their participation dropped to 89%, driven by the decline in labor-force participation of non-college educated men. Similarly, after steady gains, the participation rate for prime working-age women peaked at 77% in 1997, stagnated until 2000, fell during the Great Recession, recovered somewhat after 2015, and was 75% in 2018.
The trends in the United States differ from those in other advanced industrial economies. For example, using a broader age group (15-64), the male LFPR stabilized in Canada and the United Kingdom after falling between 1990 and 2000, while it declined further in the US. In 2018, the US rate was 78%, while the rate in both Canada and the UK stood at 82%. Trends in the female LFPR also varied across countries. Using this broader measure (15-64), the US female participation rate peaked at 70% in 1997 and fell to 67% by 2018. In sharp contrast, the female rates in both Canada and the UK have increased gradually since the 1990s, hitting peaks of 75% in Canada and 73% in the UK in 2018.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
Subscribe
or
Register for FREE to access two premium articles per month.
Register
Already have an account?
Log in
BERKELEY – Though the unemployment rate and jobless claims are currently lower than at any point since 1969, the US economy is still facing labor-market challenges that cannot be ignored. One stands out: the long-term decline in the US labor-force participation rate (LFPR) – a key factor in future growth.
In the late 1960s, 97% of all prime working-age men (25-54) participated in the labor force, but by 2018 their participation dropped to 89%, driven by the decline in labor-force participation of non-college educated men. Similarly, after steady gains, the participation rate for prime working-age women peaked at 77% in 1997, stagnated until 2000, fell during the Great Recession, recovered somewhat after 2015, and was 75% in 2018.
The trends in the United States differ from those in other advanced industrial economies. For example, using a broader age group (15-64), the male LFPR stabilized in Canada and the United Kingdom after falling between 1990 and 2000, while it declined further in the US. In 2018, the US rate was 78%, while the rate in both Canada and the UK stood at 82%. Trends in the female LFPR also varied across countries. Using this broader measure (15-64), the US female participation rate peaked at 70% in 1997 and fell to 67% by 2018. In sharp contrast, the female rates in both Canada and the UK have increased gradually since the 1990s, hitting peaks of 75% in Canada and 73% in the UK in 2018.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
Subscribe
orRegister for FREE to access two premium articles per month.
Register
Already have an account? Log in