The U.S. labor force is having a rough time recovering from the pandemic.
So we’re square with terms, the labor force is defined as the number of people employed plus the number of people unemployed – the unemployed being people who are not working but are looking for work. People who are neither working nor looking for work are classified as not in the labor force.
Another good term is the labor force participation rate, defined as the percentage of the population age 16 years and older that is in the labor force.
In February 2020, the U.S. labor force totaled 164.4 million and the labor force participation rate was 63.3 percent. The pandemic hit in March. By April, the labor force had fallen to 156.5 million and the labor force participation rate had slipped to 60.2 percent.
Both then began to increase. By August 2020, the labor force had risen to 160.8 million, the participation rate to 61.7 percent.
Neither has changed much since. Only last month did the labor force claw its way to 162 million. The participation rate is all but the same at 61.8 percent.
Labor force changes since February 2020 have been more severe for women than for men, but not dramatically so.
From February 2020 to April 2020, the male labor force fell by 4.4 percent, from 86.9 million to 83.1 million, while the male labor force participation rate fell from 69.2 percent to 66.2 percent. By October 2020, the male labor force had risen to 85.5 million and the participation rate had risen to 67.7 percent. Since then, little change: the male labor force now stands at 86 million, 1.0 percent less than its February 2020 level; the male labor force participation rate stands at 67.8 percent, 1.4 percentage points less than its February 2020 level.
The female labor force fell by 5.4 percent from February 2020 to April 2020, from 77.5 million to 73.3 million, while the female labor force participation rate fell from 57.8 percent to 54.6 percent. By July 2020, the female labor force had risen to 75.6 million, while the participation rate had risen to 56.2 percent. And again, since then, little change: the female labor force now stands at 76 million, 1.9 percent less than its February 2020 level; the female labor force participation rate stands at 56.2 percent, 1.6 percentage points less than its February 2020 level.
The puny increases in the labor force and labor force participation rates over the past 15 or so months are a bit of a shock. It was widely anticipated that workers who dropped out of the labor force in the first months of the pandemic would return as the economy recovered. It was also widely anticipated that working moms who dropped out of the labor force when schools and day cares closed would return once they reopened.
The aggregate numbers suggest that workers who had not returned to the labor force by October 2020 are not returning at all.
It was also widely anticipated that gobs of unemployed workers would go job hunting full bore and join the ranks of the employed once the extra pandemic unemployment benefits expired. The aggregate numbers show no evidence of that.
The number of unemployed people who found jobs in January of this year was 2.6 million. According to expectations about expiring unemployment benefits, that figure should have jumped in June and remained high through at least November.
It didn’t. It has fallen almost every month since January. November’s figure was 2.1 million.
Perhaps the missing workers aren’t coming back.
Reg Murphy Center