The total number of people who are actually looking for work, including both employed and unemployed individuals, is known as the labour force.
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Just as the COVID-19 epidemic in the US was beginning, in February 2020, the U.S. labour force peaked at 164.6 million people. The U.S. labour force had increased annually since 1960 before the pandemic, with the exception of the years following the Great Recession (2009–2011), when it remained below 2008 levels. The Great Resignation led to a record amount of American workers leaving their jobs voluntarily in 2021.
The ratio of the labour force to the total size of their cohort is known as the labour force participation rate (LFPR) or economic activity rate (EAR) (national population of the same age range). Similar to other Western nations, the U.S. had a major rise in the labour force participation rate in the latter half of the 20th century, mostly as a result of more women entering the workforce. Since 2000, there has been a steady fall in labour force participation, mostly as a result of the Baby Boom generation’s ageing and retirement.
It is possible to distinguish the effects of an ageing population from those of other demographic characteristics (such as gender, race, and education) and governmental policies by examining trends in labour force participation in the prime working age (25–54) cohort. Higher educational attainment is associated with higher labour force participation for workers aged 25 to 54, according to a 2018 explanation from the Congressional Budget Office. While women frequently leave the workforce to care for family members, men in their prime years tend to be absent from the workforce due to disabilities.
Women Labour Force:
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There were three key phases of women’s growing labour force involvement in the United States. Very few women held jobs from the late 19th century until the 1920s. Young single women who were employed tended to leave the workforce after marriage unless their household required two salaries. These women mostly worked as domestic helpers or in the textile manufacturing sector. Women were empowered by this job and were able to make a living salary. They occasionally assisted their families with money.
The rise in demand for office workers, the engagement of women in the high school movement, and electrification, which cut down on time spent on household duties, were the main factors behind the rise in female labour force participation between 1930 and 1950. Most women were secondary earners between the 1950s and the 1970s, primarily employed as secretaries, teachers, nurses, and librarians (pink-collar jobs).
Since 1960, there has been a marked rise in female labour force participation (LFP), particularly in industrialised nations like the U.S. and Europe. These might be the primary causes of this increase:
- Increased actual wage
- Decreased reservation wage
- Alterations in behaviours and regulations
According to the Congressional Research Service, since 1979, the gender gap has shrunk. Men saw a decline in real salaries of -7.7%, while women saw a rise of 9.6% (10th percentile). Despite the enormous rise, the real salary for women was still lower than for males. There are several possible explanations for this. Women in 1979 had more options and chances to obtain a degree other than a high school diploma. Additionally, the study found that only males with bachelor’s degrees or higher will make more money in reality than women.
LFP hasn’t changed much since 2000, despite other wealthy nations’ continued growth. Numerous things could have caused this outcome. It was thought that the American government lacked “family-friendly policy.” According to Claire Cain Miller of the New York Times, other wealthy nations like Denmark, Germany, Norway, etc. spend an average of $14,000 on childcare per year while the federal government of the United States only contributes $500. Additionally, a guaranteed position in after-school care, whereas American parents must apply for a spot.
Men Labour Force:
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Men’s LFP has fallen since 1950 with 86.4%, 79.7% in 1970, 76.4% in 1990, and 73.3% in 2005, according to the U.S. Bureau of Labor Statistics. Due to various regulations, such as the Social Security Act, experts expect that this decline could increase throughout the course of the year (1960). Men LFP may also fall as a result of declining male educational participation, marriage occurring later in life, an increase in substance usage, and video game addiction.
As stated in the article “Why are men in their prime leaving the work force?” According to the author’s research (Economic review, Federal Reserve Bank of Kansas City, first quarter 2018), from 1996 to 2015, the majority of men in their prime who only have a high school diploma or an associate’s degree would have a much higher nonparticipation rate than those who have a graduate degree. This could be explained by the need for middle-skilled labour at that time. No matter their level of education, everyone’s nonparticipation percentage rose during the Great Recession. The author, however, made an effort to go farther and divided the male population into four groups: those who do not have a high school diploma, those who do, those who do, those who have a high school diploma, those who have an associate’s degree, and those who have a bachelor’s degree or higher. It was clear that the group with only a high school diploma was responsible for the enormous increase.
After COVID-19, the men’s LFPR tended to rise even more. Numerous factors, according to experts, could have caused these outcomes. People who are close to retiring would want to go to bed earlier; despite being in good health, they would rather spend their time with family, engaging in hobbies, or volunteering. Additionally, COVID-19 put the majority of people at risk, particularly those who already had health issues. Another reason is that many businesses are attempting to relocate their facilities to other nations, which could reduce expenses and benefits for businesses. More than half of men in their 30s have a history of criminal arrests, according to Science Advances. This is another another factor contributing to the rise in the male nonparticipation rate.
As of January 2018, there were 27.8 million workers who were immigrants. In January 2018, this group’s LFPR was 65.1% in total. Individuals from Mexico and Central America made up the largest portion of the foreign-born immigrant work force in the United States as of 2013. They represented 40.3% of the labour force participation of immigrants. Mexico significantly outnumbered Central America, where they employed the majority of workers, accounting for 32% of all workers. Most of the immigrants who were foreign-born workers in the United States in 2013 lived in California, with over half coming from Mexico and Central America.
The US Bureau of Labor Statistics reports that as of 2019, Asians are more likely than Hispanics or Latinos to work in management, while Hispanics or Latinos are more likely to work in the service industry. Male LFP dropped and has continued to fall from 1950, with values of 86.4% in 1950, 79.7% in 1970, 76.4% in 1990, and 73.3% in 2005, according to the U.S. Bureau of Labor Statistics. Due to various regulations like the Social Security Act, experts believe that this drop may continue and even increase over time (1960). The fall in male LFP may also be caused by a decline in male educational participation, an increase in marriages at older ages, a rise in substance abuse, and an addiction to video games. The benefit of disability insurance, particularly in the category of men with less education, is likely what caused the decline in the male labour force participation rate.
After COVID-19, men’s LFPR tends to rise even further. According to experts, a variety of factors could have contributed to this outcome. Even when they are in good health, those who are close to retiring would like to do it sooner so that they may devote more of their time to family, hobbies, or volunteer work. Additionally, COVID-19 constituted a threat for the majority of persons, particularly for those who have had prior health issues. Another factor can be the fact that many businesses are attempting to relocate their facilities to nations with lower prices and benefits. More than half of men in their 30s have a criminal record, according to ScienceAdvances. This may also contribute to the rising rate of male nonparticipation.
Health disparities among Workers:
One of the key socioeconomic determinants of health and a significant factor in racial and ethnic disparities in health is a person’s work. Income, housing, paid sick leave, and health insurance are factors under the occupation category; they are connected to a person’s socioeconomic standing. Because of the relationship between the American health care system and employment, it is very likely that a worker is paying for health insurance through their employer; low-wage workers who choose to receive coverage through their employment pay a higher percentage of their income than their middle-income and higher-income counterparts. Based on race, there are an excessive number of employed people in all job sectors, but especially in high-risk ones.
Health Insurance Coverage:
There are two types of insurance: public and private. Statistics from the Centers for Disease Control and Prevention show that in 2021, 13.5% of adults between the ages of 18 and 64 had insurance, 39.5% of them used government insurance, and 60.4% used private insurance. Even though people often switch insurance types throughout the year and personal insurance is more prevalent than public insurance, the percentage of general insurance coverage will surpass private insurance in 2021 compared to 2020. According to data from the National Center for Health Statistics, the percentage of adults between the ages of 18 and 64 who have health insurance tends to rise and is correlated with household income. Between the ages of 18 and 64, the proportion of insured people plummeted and drastically decreased as follows: 24,5%, 23,7%, and 8.4%. There are four categories under the Federal Poverty Level (FPL): less than 100%, greater than 100%, less than 200%, and 200%.
Examining the rate of labour force participation:
Overall Rate: Women entering the workforce in the United States increased the total LFPR by over 8 percentage points between 1962 and 1999. Since hitting an all-time high of 67.3% between January and April 2000, the U.S. general LFPR (age 16+) has been declining, reaching 62.7% in January 2018. The retirement of the Baby Boom generation is the main cause of this drop since 2000. An ageing society with more people past the traditional prime working age (25–54), where the labour force is defined as individuals age 16 and over, has a steadily negative impact on the labour force participation rate (LFPR). Economists and demographers predicted the fall at least as far back as the 1990s. For instance, the BLS predicted in 1999 that the global LFPR would be 66.9% in 2015 and 63.2% in 2025. Prior to the Great Recession, which started in December 2007, Federal Reserve researchers predicted in 2006 that the LFPR would be below 64% by 2016, or roughly 62.7% on average that year.
Primary working age rate:
The LFPR for those employees in their prime age range, 25–54, is also examined by economists. This ratio’s numerator (the labour force aged 25 to 54) and denominator are calculated mathematically (civilian population age 25–54). In order to better identify patterns among people of working age, this can help mitigate the effects of an ageing demographic. Between October 1997 and April 2000, the prime-aged LFPR reached 84.5% three times. Prior to the Great Recession, the rate stood at 83.3% in November 2007, dropped to a low of 80.5% in July 2015, and then began a steady ascent up to 81.7% in January 2018. As of January 2018, it was one of the only important labour market indicators that had not yet reached its pre-crisis level, indicating slack in the labour market.
Since at least the 1960s, men’s prime-age labour force participation has been steadily declining. In the 1980s, it fluctuated between 93 and 95%; in the 2000s, it dropped to about 90%; and in October 2017, it was 88.5%. Higher educational attainment is associated with greater labour force participation.
Women’s prime-age labour force participation increased steadily starting at least in the early 1960s and peaked in August 1997 at 77.2%. Since then, it has fluctuated at approximately 75%, defying the trend of declining involvement among men in their prime. Compared to men, women now have higher educational attainment levels. Higher educational attainment is associated with higher labour force participation, according to a 2018 explanation from the Congressional Budget Office. While women frequently leave the workforce to care for family members, men in their prime years tend to be absent from the workforce due to disabilities. This cohort’s participation is under pressure since an ageing population often needs the help of family members who are still in their prime at home.