For several decades, labor force participation has been shrinking. While one reason is that many Baby Boomers are retiring, reducing the number of participants, that isn’t the only factor in play. Instead, some surprising groups aren’t reaching participation rates that were once present in decades past. Additionally, alternatives to traditional employment paradigms are a factor.
Here’s a look at some of the reasons why labor participation rates are shrinking.
More Young Adults Living with Parents
Overall, an estimated 25 percent of young adults are still living with their parents. While there are benefits to these arrangements, such as making attending college more affordable or allowing young adults to save for major financial goals, those aren’t the only circumstances causing the rise.
In some cases, young adults are remaining with their parents as a means of delaying when they enter the workforce. Staying with parents lessens a young adult’s financial responsibilities, often dramatically. Housing, food, utilities, and similar costs may not fall on their shoulders, or they may be minimized when compared to the cost of moving out. As a result, pursuing a full-time job may not be necessary, leading some to opt out of joining the workforce.
One interesting factor is that young men are the most likely to remain at home with their parents or another older family member. Of the young adults living at home, 59 percent are men. Generally, the earning potential of young men without college educations has declined during the past 50 years, which could make living independently challenging.
In many ways, this upward trend in young adults remaining at home was exacerbated by the pandemic. Many young adults returned to their parent’s homes or remained longer than initially planned due to the employment challenges related to COVID-19. For those young adults, the decision was based more on survival, but the shift in the paradigm likely led some to forgo pursuing full-time opportunities in the years since.
The Rise of the Gig Economy
For many working-age adults, the gig economy is an appealing alternative to a traditional full-time job. Typically, gig work comes with an inherent degree of flexibility and autonomy which often exceeds what’s available with more conventional work arrangements.
Often, it’s possible to earn a wage that’s comparable to a more traditional job by taking several gig positions instead. As a result, those who explore it may find returning to a full-time position with more restrictions on when work is completed unnecessary, as they’re earning similar wages while maintaining more flexibility.
Lower Labor Participation Rates Holding Your Company Back? Contact PrideStaff Bend Today
While there’s little employers can do to broadly impact labor participation rates, there are steps they can take to ease hiring concerns created by a lack of capable candidates. By partnering with a staffing company, organizations can tap into robust talent pipelines filled with vetted job seekers, streamlining recruitment while shortening time-to-hire.
If you need to hire top talent quickly, PrideStaff Bend wants to hear from you. Contact us to learn more about our services and how they can help your company overcome hiring challenges today.