I find the difference between unemployment and labor force nonparticipation interesting. Turning to the EPI, unemployment is not having employment while actively looking for employment. Labor force nonparticipation is not working while not looking for work.

During the peak of the pandemic, unemployment skyrocketed. Recently, unemployment has declined substantially and actually looks almost exactly like it did prior to the pandemic.

If you look at a longer time period, we’re in a very good time in which very few folks are unemployed. The unemployment rate in 2019 and 2022 are about as low as it gets. I’ve seen some argue that this is why pressure to increase wages has amplified in the last year.

At the same time, labor force nonparticipation increased substantially during the pandemic and stayed at a higher level.

Even after a massive rise after the precipitous drop, labor force participation is about one percentage point lower than it was in 2019. And 2019 represented a low point in a decades-long decline of labor force participation.

Labor force participation is currently at levels last seen in the mid 1970s. If you look at the age breakdown, it seems like 20-24 year olds are the biggest contributors to the decline:

I’m pretty sure fewer folks are attending college as well. So there’s a big risk that there are folks who’ll be scarred for a long time from the pandemic. In combination, I’m guessing the labor market is potentially way less tight than it would seem if you just looked at the unemployment rate. I’m going to keep my eyes on the early 20s folks in the next decade to see the consequences of these changes. A hopeful outcome is that these folks transform what it means to work and learn and come out just fine. A less optimistic outcome is that this is scarring effects of unemployment + bowling alone + deaths of despair on steroids.