The number of adults between the ages of 25 and 54 who are looking for work has dropped by 1.4 million people since before the pandemic, according to The Wall Street Journal (subscription).
The numbers: The labor-force participation rate for “prime age workers” was 81.7% in October 2021, down from 82.9% in February 2020.
Cause for concern: Economists expected certain factors to send more people back into the labor market this fall—but the effects are either taking time to materialize or the incentives aren’t as powerful as they thought.
- “School reopenings haven’t brought large numbers of mothers back into the workforce. And the nationwide expiration of expanded unemployment benefits in September hasn’t widely spurred work searches.”
New employee mindset: Another factor has been many workers’ new opinions on their work/life balance. Some workers may settle into a new lifestyle that involves part-time employment or more flexible hours, choosing never to return to the traditional workforce.
Keeping workers interested: The smaller pool of workers means employers may need to keep raising wages to keep employees in a hyper-competitive market.