The workforce participation rate is falling and economists don’t know why.
The rate is a measurement of how many individuals above the age of 16 are working or seeking work. The rate has dropped from 66 percent to 62.9 percent, according to the Idaho Department of Labor.
That’s about 8 million people who have exited the workforce.
“We’re trying to develop a model to tell us what is happening with the participation rate,” said Craig Shaul, research analyst supervisor with the Idaho Department of Labor. “It should be higher than what it is.”
The workforce participation rate peaked at 74 percent in the 1990s, Shaul said, but has dwindled due to various trends. One is that young adults are choosing not to work while attending school. Another is that layoffs during the most recent recession discouraged individuals from seeking employment. No one knows how to reverse the trend.
“We don’t know why people are dropping out,” Shaul said. ” Is it because they are choosing not to work or is it because they can’t?”
Economists from around the country will continue to study the trend to figure out how to get more participation, because the lack of participation hurts economic output and tax receipts.
“They are probably legitimately discouraged from participating,” Shaul said. “Maybe they feel they can’t get a job in their area, or that the wage the job offers isn’t worth it. There is no obvious answer for addressing this.”