Here’s some added context to my recent VPR story on the decline in the number of workers in Vermont (i.e. the labor force).
There’s a national parallel to this and the points of disagreement mirror those in our piece.
“The labor force participation rate (the share of working-age people who either have a job or are jobless but actively seeking work) dropped by two percentage points between the beginning of the Great Recession in December 2007 and the end of 2011, and declined even further in the first four months of 2012.”
That’s from this article by the Economic Policy Institute. They argue that 2/3 of the decline is due to a lot of discouraged workers who’ve simply stopped looking for a job and dropped out of the labor force.
The same argument is made here by the American Enterprise Institute.
Then there’s the Barclay’s take described in this article: the decline is largely due to retiring baby boomers, not discouraged workers.
Each argument cites stats to back up its point of view. Whatever the cause of the labor force decline the bottom line is, as Ezra Klein explains in this Washington Post blog post:
“If the same percentage of adults were in the workforce today as when Barack Obama took office, the unemployment rate would be 11.1 percent. If the percentage was where it was when George W. Bush took office, the unemployment rate would be 13.1 percent.”