Fewer Americans in the workforce, at a glance

AP News
Posted: Jan 10, 2014 5:04 PM

The share of Americans in the workforce has sunk to its lowest point in 35 years. It's a sign of both an aging population and of unemployed people who have given up on their dispiriting job hunts.

The drop could accelerate in the months ahead because Americans who have been out of work for more than six months have lost their unemployment benefits. Congress is debating whether to renew for a sixth year an emergency program that paid benefits averaging $256 a week.

As a requirement to receive unemployment checks, recipients needed to actively look for a job. Without their payments, many workers will likely stop looking for a job. Once they do, they'll no longer be counted as unemployed and no longer considered part of the labor force.

A gauge known as the labor force participation rate measures the proportion of working-age adults who either have a job or are looking for one. This rate fell to 63.2 percent last year, its lowest level point 1978, according to the Labor Department.

The rate had peaked at 67.1 percent during the late 1990s. At the time, it was buoyed by a strong economy, the baby boom generation entering its peak earning years and the entrance of more women into the workforce.

The rate's decline has accelerated since the 2008 financial crisis, partly because baby boomers are reaching retirement age and the unemployed have struggled to find work.

Economists differ over which single factor best explains the decline in labor force participation. But few dispute that the trend will likely persist.

More than 1.3 million Americans lost these benefits when the program expired last month. An additional 800,000 will lose their checks in the weeks ahead.

Economists say the likelihood of landing a job dims substantially after six months of unemployment. The economy remains 1.2 million jobs shy of the 8.7 million that disappeared after the recession struck.

"The bottom line: The economy is not creating positions for these people," said Robert Shapiro, chairman of the economic advisory firm Sonecon.

Here is a chart of changes in labor force participation in five-year increments:

Labor Force Participation
1978 63.2 percent
1983 64 percent
1988 65.9 percent
1993 66.3 percent
1998 67.1 percent
2003 66.2 percent
2008 66 percent
2013 63.2 percent

Source: Labor Department