The numbers were particularly aided by a surge in hiring in 2014, notably in the latter part of the year. Concurrently, the broader percentage of Americans in the labor force (people who are working or looking for work) hardly moved the needle in the latest U.S. jobs report, at 62.7%.
While it was significantly higher before the economic downturn (66%), it’s been trending lower since 2009, even as hiring has picked up. The data, provided by the Bureau of Labor Statistics and the Census Bureau, point to three main reasons for a declining labor force:
- Retirement
- Disability
- More people in school
Plus there is the wild card of individuals who have stopped looking for work and have dropped out of the labor force.
The figures are a bit puzzling. Even with Baby Boomers retiring in droves, the portion of Americans who retired by age 65 fell between 2006 and 2014. Non-working people who are in school reached a peak of 7.1% in 2012, but have been declining; also, these tend to be younger and more “employable” people, under age 35.
The trend of more people going out on disability may be the most troubling. This group likely includes a lot of older workers who couldn’t find jobs or afford to retire early. Many other retirees seem to have been more affluent employees with higher levels of education who lost their jobs. Does this mean the recession did less damage to the workforce than we had thought, or more?