Labor Force Participation Gaps Closing

A Look at Those Who Have Dropped Out of the Workforce; 55+ Participation is Higher than Pre-Recession; Women Participation Edges Up

Janis Petrini, Express Employment Professionals franchise owner in Grand Rapids, Michigan, said there’s never been a better time to be hunting for a job. In fact, Petrini is expending even more effort than usual to bring new people into the workforce because the demand for workers far exceeds the supply.

Ten years after the Great Recession, a higher percentage of Americans are on the sidelines and not in the workforce, compared to pre-recession levels. But with low unemployment rates today, the key to continued economic growth will be getting more Americans off the sidelines and into the workforce.

Who’s In? Who’s Out?
A new analysis from Express, drawing on data provided by the Bureau of Labor Statistics, breaks down who’s on the sidelines.

According to the latest data, women are far more likely than men to be out of the labor force. The overall U.S. labor force participation rate is 62.9 percent. The participation rate for men is 69 percent, compared to women with 57.2 percent.

White Americans’ participation rate is 62.8 percent, just under the national average, while African-Americans’ is slightly lower at 62.2 percent. As illustrated in the image, the gap between white and African-American labor force participation has narrowed since the Great Recession, in part because of recent increases in African-American labor force participation and the longer-term decline in white labor force participation.

Hispanics (of any nationality) have a higher than average participation rate of 68.2 percent.

The participation rate for prime-age workers (25-54) has risen recently, but remains lower than pre-recession levels, while the participation rate for workers age 55 and over is noticeably higher, indicating delayed retirement.

Education levels correlate strongly with participation rates. Those 25 or older with a bachelor’s degree are much more likely to be in the workforce than those without a degree.

What Keeps People Out? Why Are Some Jumping Back Into Work? What Are The Challenges?
“We have found that the most common barriers to getting people jobs are reliable transportation, access to affordable childcare, and lack of necessary employment skills,” Petrini said.

She sees a healthy job market but consistently lower labor force participation.

“Although the job market has many positive signs in Western Michigan and unemployment is below 4 percent, the labor force participation rate is still stubbornly several points lower than it was before the last two recessions.”

Yvonne Rockwell, an Express owner in Santa Clarita, California, agrees.

“Barriers to employment are a reason I see people on the sidelines,” Rockwell said. “One of the barriers that I find in my market is transportation. It’s huge. Sixty percent of our associates commute 45 minutes to work. Many have to take a train and then a bus. If there was government transportation assistance it would be successful in keeping these people gainfully employed.

“Background checks are another barrier I see in my market. There are some really great people in our community who unfortunately made a poor decision at some point in their past and just need a second chance.”

Terri Greeno, an Express office owner in Crystal Lake, Illinois, says that it’s not always easy for people dependent on welfare programs to make the transition back into the labor force—and for no fault of their own.

“There is a gap with people who are on different entitlement programs,” she said. “Once an entitlement program stops, there’s no bridge there. You are either on it or off of it. There needs to be some sort of bridge to fill that gap, skills [training] or otherwise, in order for that person to re-enter the workforce, because the truth is they can’t cover child or dependent care if they don’t have a skillset to apply toward employment.”

Getting people off the sidelines can have a powerful impact in their life, as Rockwell further explained.

“We have an associate who was unemployed for just under one year when he first came to us,” she said. “By working together, we have been able to keep him gainfully employed. As a result, he was granted sole custody of his four-year-old daughter and continues to be a great employee!”

Identifying strategies to get more people off the sidelines and into the workforce is critical for our country’s economic health and vitality, according to Bob Funk, CEO of Express, and a former chairman of the Federal Reserve Bank of Kansas City.

“There’s too much potential on the sidelines, and we want that potential put to work,” he said.

All statistics come from the Bureau of Labor Statistics and represent data from August 2017, released September 1, 2017. It is available at https://www.bls.gov/news.release/empsit.toc.htm.

In August, Express released a white paper on 10 places to find new workers and grow the workforce. “Help Wanted: A Roadmap for Finding New Workers” is available here.

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