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Economics

Not Looking for Work: Labor-Force Participation Hits 35-Year Low

A job seeker speaks to a résumé professional at a National Career Fairs job fair in Arlington, Va., on Jan. 30
A job seeker speaks to a résumé professional at a National Career Fairs job fair in Arlington, Va., on Jan. 30Photograph by Andrew Harrer/Bloomberg

The unemployment rate fell in August but for the worst of reasons: Many Americans stopped looking for work so they weren’t counted among the unemployed. What’s harder to tell is why they stopped looking. The political right chalks it up to laziness and government coddling, while the political left says people are giving up looking because a dysfunctional economy isn’t producing enough jobs.

The Bureau of Labor Statistics said the August unemployment rate was 7.3 percent, down a tick from 7.4 percent in July. The worrisome part is why the rate fell. The size of the workforce declined by about 300,000 and the participation rate fell to 63.2 percent from 63.4 percent—the lowest since August 1978. The participation rate is the number of people either working or actively searching for work as a share of the working-age population. It rose steadily over the years as more women entered the workforce before falling sharply in the 2007-09 recession, and it hasn’t recovered since.