Commentary
Businesses complain incessantly these days of labor shortages. Rising wage rates would seem to induce more people to seek paid employment, and they have to some extent.
Still, a historical shortfall exists in the percent of the population at work or actively seeking employment, a shortfall that has limited the economy’s growth potential. Because the problem mostly reflects the retiring of the huge baby-boom generation, this troublesome worker shortage seems likely to persist, probably to the end of the decade.
Labor Department statistics tell the story. Some 15 years ago, about 67 percent of the civilian population were either working or actively seeking work. This so-called “participation rate” began to fall after the Great Recession of 2008-09 and continued to do so until it fell below 63 percent in 2016. Stated in percentages, this seems like a small change, but in a population of just under 350 million, this drop in participation effectively denied the economy some 14 million workers. It is little wonder then that the economic recovery during those years proceeded as slowly as it did.
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