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A new report from the Economic Policy Institute reveals a surprising rebound in U.S. prime-age labor force participation — the share of people aged 25 to 54 who are working or actively seeking work — after decades of ups and downs.Â
After rising steadily from the 1970s through the mid-1990s, participation plateaued, then declined following the Great Recession. Yet in the past decade, a tight labor market has pulled many back into the workforce despite pandemic disruptions.
Education and Demographics Reveal Uneven Labor Trends
The long-term trends show deep divides by gender and demographics. Men without college degrees faced the steepest drops, largely due to shrinking opportunities in manufacturing and military jobs.Â
Black men were hit especially hard by the rise in incarceration during the 80s and 90s, which has had lasting effects on their ability to find employment amid ongoing discrimination. Though their participation rates dropped sharply, recent labor market strength has helped restore Black men’s workforce involvement to levels seen around 2000.
Women’s Workforce Participation Stalls but Flexibility Offers Hope
Women experienced a different pattern. Their labor participation surged through the 80s and 90s but stalled in the early 2000s, trailing behind peers in other developed countries. The lack of robust support for juggling work and family life has been a key barrier.Â
However, the rise of remote and hybrid work following the pandemic appears to have eased this struggle, especially for women balancing caregiving duties.
Policy Changes Needed to Sustain the Momentum
Looking ahead, the report emphasizes that strong labor markets alone aren’t enough. To keep participation rising, policymakers must tackle systemic hurdles like high incarceration rates and improve pay and conditions in key growth sectors, such as caregiving.Â
Making these jobs more attractive is critical to bringing more workers into the fold.
Overall, the last decade shows what’s possible when demand for labor is high, but unlocking the full potential of America’s workforce will require targeted policy efforts to break down persistent barriers.
