There are so many things to like about the US economy but this is an ugly chart.
US labor force participation fell another 0.3 percentage points in June to 61.5% and excluding the pandemic, is now at the lowest since 1976, when women still hadn’t fully entered the labor force.
For some perspective, if participation was still at 2000-era levels, there would be 15 million more people in the USA working and earning wages.
You can explain about two-thirds of the drop with aging. Participation is about 84% for prime-age workers (25-54) but only 37.1% for those 55 and older as of May 2026. The baby boom cohort began crossing age 55 in 2001 and age 65 in 2011 — almost exactly when the chart breaks down in two legs.
Another big part of the drop is young workers aged 16-24 who aren’t getting the job experience of previous generations. Teen and young-adult participation collapsed from about 66% in 2000 to the mid-50s. A big part of that is more university enrolment combined with credential inflation.
A third part of it — responsible for about 0.5 percentage points — is that prime-age male participation was 91.5% in 2000 and sits near 89% now. The drivers are well documented: the manufacturing employment collapse and China shock hitting less-educated men hardest. I also suspect that young rich winners in tech and crypto dropping out account for some part of that.
Another notable trends is poor US relative participation from prime-age women. It hit a high of 78% just after the pandemic but trails Canada by about 5 percentage points. The common thinking is that’s due to high childcare costs and there’s good evidence of that but higher US relative wealth may also be keeping upper middle-class mothers at home.
Looking ahead, it gets worse for the economy with the BLS seeing it trend to 61.1% by 2034. Now that’s just 0.4 percentage points away and looks like an overestimation. Could we be heading for a 5-handle? That would mean more than 4 in 10 Americans aren’t working.
