Overview
- Federal Reserve Bank of St. Louis data show 105.8 million Americans were not in the labor force after roughly 832,000 people left the workforce in June, pushing the participation rate to about 59%, the lowest since September 2021.
- Retirees account for about half of the total not in the labor force while roughly 23.3 million people, or about 22% of that group, report long-term illness, disability, or similar benefits.
- An estimated 5.3 million people have stopped looking for work because they are discouraged, and labor economist Nicholas Eberstadt estimates roughly 7 million prime-age men are out of the labor force with an additional cohort of nonparticipating women.
- Analysts point to structural factors that could entrench the trend, including a fragmented, hard-to-track web of disability and benefit programs and the risk that poorly designed policies such as a guaranteed basic income could encourage further withdrawal.
- The rise surpasses levels seen in the Great Recession and the COVID era and could have wide effects on government finances, local labor shortages and community wellbeing, with commentators warning of long-term social harms such as increased isolation and health decline.