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Workforce participation rate continues to drop

Workers at the Village at Meridian, a shopping center with more than 500,000 square feet of space that was completed last year in Meridian. The Meridian-based company Scentsy also built its headquarters on a 63-acre campus in the city last year. Photo by Patrick Sweeney.

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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.”

About Benton Alexander Smith

Benton Alexander Smith is a reporter for the Idaho Business Review, covering the Idaho Legislature, new business, technology and financial services.

One comment

  1. Candidly, Idaho does not treat workers well. The real wage has steadily declined since the Right to Work passed. Simply stated, since Idaho does not pay livable wages, why work. Look at all meaningful statistics and ranking, Idaho has steadily fallen to the bottom. Since Mr. Luna’s lunacy, and the insider dealings of the Governor’s good friend, Mr. Gwartney, Idaho education has continued to plummet. Mr. Gwartney should be in prison for what he did. So, with these things coalescing into one horrible whole, you have to ask why people don’t want to work in Idaho. Lawrence G. Sirhall, Jr.