Welcome Back, Carter! Labor Participation Drops to 1978 Levels.


The unemployment rate may have ticked back up to 7.3 percent, partially reflecting furloughed federal workers, but more concerning is that the share of the population actively looking for work dropped to Carter-era levels. That's right, the labor participation rate in October was down to 62.8 percent, a rate that hasn't been seen since March of 1978. (Note: Reason's Ron Bailey noted this blast from the past just a few days ago.)

Labor participation rate
Bureau of Labor Statistics

I doubt that anybody has a full explanation as to why labor participation is on such an impressive downward streak, reflecting Americans effectively dropping out of the workforce. Retiring Boomers (PDF) have been fingered as a contributing factor, but some research shows the old hippies hanging on to their jobs by their fingernails, even as younger workers disproportionately drop out. A Cato Institute study released in August suggests that, with the weak job market, some efforts to cushion the blow of the lousy economy are actually counter-productive because "The current welfare system provides such a high level of benefits that it acts as a disincentive for work." Taking benefits may be a tad more attractive than trying to assemble a couple of Obamacare-dodging part-time gigs into a living.

Whatever the explanation, welcome back, Carter.


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  1. It’s still that high?

    1. That’s what I was thinking.

  2. The safety net looks like an inviting hammock.

    1. But look at how well the government takes care of the lazy less fortunate. Do you Randroid teathuglicans want to shread the safety net?

      1. Randroid…I like that. Going to steal it later.

  3. It is about time the important number gets some headlines. Can someone send a memo to National Review?

  4. Welcome Back Carter

    Is that a pop-culture reference that severely dates the person using it?

    I think so.

    1. I’m sorry. But it must be worse than March, 1978. Way more women are working. Way more households rely on two incomes. It’s worse. Stagflation daze was okay in comparison.

      1. Because of the multi-income earner norm, didn’t the market clearing price for salaries reach a point where it’s no longer possible to support a proper household on just one? (for normal salaries)

  5. Welcome back,
    Your dreams were your ticket out.

    Welcome back,
    To that same old place that you laughed about.

    1. Up your nose with a rubber hose.

    2. Yea, we tease him a lot cause we got him on the spot, Welcome back….

  6. The middle-class is getting squeezed out of existence.

  7. Why go through the effort of working or risking capital when you can kick back and get welfare?

    1. There is no end of help wanted signs for low end jobs where I live in NY. It’s pathetic.

      1. You’re telling me; I need people right now. There’s nobody qualified enough willing to work for what I can pay, because it’s easier to collect an unemployment check than bust your ass all day.

        1. What type of work is it?

          1. I bet it requires goggles and latex…

        2. “There’s nobody qualified enough willing to work for what I can pay,”

          Then you need to offer a higher salary.

          1. This is the problem when companies say ” we need more qualified STEM graduates.” They really mean “we need more STEM graduates to drive the asking price.for labor down to what we want to pay.”

            1. Auto mechanics. The ones that get laid off don’t want to work for less than Unemployment is paying them, because why would they?

              However, most of them lost their jobs because they weren’t worth their salary.

          2. “Then you need to offer a higher salary.”

            I got a call from a small start-up looking to bring on an inventory manager. After me having to repeatedly insist that going to school while working wasn’t going to be an issue, she said she was looking for someone for the long-term and able to work overtime and “committed”.

            She offered $13.00/hr with no benefits.
            I laughed and hung up the phone.

      2. Your other problem – NY. The cost of living and taxes are too high to get by on a low-end job.

  8. Yes, there definitely are more part-timers now, for reasons we all know here, but I’m wondering if maybe there are more freelancers today, doing business informally among friends and neighbors? I’m kind of doing that, myself. I wasn’t grown in the 70’s, but I remember enough to know how people were coping back then.

    1. I’m sure there’s plenty of that going on as well. The ironic thing is that with all of the government’s efforts to grow the system, they’ve probably pushed a significant amount of people into working outside the system.

  9. Once unemployment runs out, it’s on to permanent disability.

    1. Duh. Employers don’t want employees that have been absent from the workforce for over 3 months; after 99 weeks of disability, your skillset has deteriorated so much you’re basically handicapped.

      Here’s your SSI check and handicapped parking placard. Have a nice life!

      1. It’s not just the skillset deterioration. It indicates what kind of worker you are likely to be.

        1. That is to say: If I, as an employer, get so much as a whiff of moocherism from an applicant, I ain’t hiring.

      2. I was laid off and I waited about 4 months before I started looking for another gig. Nobody wanted any part of me, even when I started applying to jobs for which I was perfect. Nor was there interest later, when I applied to jobs for which I was hilariously overqualified. I eventually convinced some guy to hire me for a crap temp job. Within a month, people were falling all over themselves to hire me for excellent jobs at a much higher rate than I would have initially accepted. In short: HR is where stupid people go when they can’t get into government.

        1. I figured that since I was burned out beyond belief from the death spiral of the previous company and had a brutal commute, I was doing my next employer a favor by taking a few months off first. Apparently not one that anyone was capable of recognizing.

          1. No, they see it as demonstrating a lack of dedication to work. They much rather see evidence of Kar?shi or a serious attempt at it.

            1. If you can make a reasonable case that you were attempting to make a go in consulting or other self employment it could help, but sitting around burning your savings or even worse, unemployment payments, is a no-no.

        2. I have a friend who waited too long to look for a real job after a layoff. I advised him over and over not to delay, but he’s only a couple of years out of college, and self confident and naive enough to believe that his credentials would be enough. Sadly, he has.almost no chance of getting back.into the field for which he spent years and many thousands of dollars getting a degree.

  10. But think about all that poverty we’re ending by reducing the number of jobs!


    1. You misued the insane troll logic. It goes: “The lowered participation rate shows how prosperous we have become, fewer people now need to work to live” /end troll

      1. It hurts my head to read that. Literally.

        I can’t comprehend this logic.

        1. I write fiction, so I can string together words to express sentiments I don’t believe to give characters life. It takes an especially broken brain to conjure insane troll logic properly.

          1. Well this was in specific reference to Tony earlier today re: the minimum wage thread saying something to the effect of “it’s not about unemployment going up. It’s about poverty.

            1. WRT Tony posts – I reach his username and reflexivly skip to the next entry in the thread.

        2. Well there’s your problem. It’s not logic, it’s feels. As in I feel this is how it should work, so it should work this way because I feel it should.

          Ok, now my head hurts.

      2. Still not quite right:

        “The lowered participation rate shows how prosperous we the 1%ers have become, fewer people now need to work to live so long as we can forcibly redistribute the ill-gotten wealth of the rich to the poor.

        Or something like that. Season to taste with some crap about TEH KKKORPORASHUNZ and misc. “not taking is giving” derp.

        1. I was going for a more collectivist vibe than the class warfare instigation. Different trolls, different rants.

      3. I thought it wohld be a net plus because of the increase in freedom due to the destruction of “wage slavery.”

  11. The only thing more poorly done than the graph was the alt-text.

  12. Retiring Boomers (PDF) have been fingered as a contributing factor, but some research shows the old hippies hanging on to their jobs by their fingernails, even as younger workers disproportionately drop out.

    The problem is that people 65 and over are not counted as part of the “labor force.” The LFP rate is really nothing more than the percentage of working-age people, ages 16-64, who have jobs, not counting students, homemakers, or retirees. Whether that total number of working-age people is 1,000,000 or 10,000, it doesn’t matter if a bunch of oldsters are dropping out at once–theoretically, if they were dropping out in numbers that were that significant, the overall LFP trend would be going UP, not down. What matters is whether the people within that particular age bracket are employed.

    1. Yeah, I was wondering about that. It doesn’t say in the link what the age cutoff is.

    2. Lots of younger people are hiding out as “students” to avoid participating in the labor force.

      A 26 year old taking 2 units of art classes at the local community college should count as unemployed.

      1. I did that for a year after undergrad (going to school to avoid the labor market, not taking art classes).

      2. Yeah, this. I suspect the boost in subsidized student loans is partly an attempt to hide the real unemployment numbers. What sucks is the poor suckers going into debt to fulfill that mission based on the lie that they’ll be more.employable with more education.

        1. Debt forgiveness takes care of that. UnParticipate all you want, we’ll print more.

  13. why would anyone want to punish themselves with an employee?

  14. A more interesting time-series chart would be males in full-time employment between ages 25 and 55.

    This particular segmentation would account for several demographic trends that are distinct from the quantity and quality of jobs, including increase in two-income households in the 1970s and 80s, deferred entry into workforce due to college, increase in part-time employment, and increase in disability recipients.

    1. increase in part-time employment, and increase in disability recipients.

      When NPR is dismayed by the number of people on disability, you know you’ve got a problem.

  15. That’s right, the labor participation rate in October was down to 62.8 percent, a rate that hasn’t been seen since March of 1978. (Note: Reason’s Ron Bailey noted this blast from the past just a few days ago.)

    I don’t see why this is a bad thing. If people are getting welfare benefits and free healthcare, why does it matter if they’re participating in the labor market?

  16. How can Democrats buy elections if the participation rates are in the high sixties?

  17. Interesting how fast the rate was rising under Carter, by that chart.

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