The Labor Market Is Broken

Employment is an ultimatum game, where playing along might get workers less than employers, but refusing to play gets everyone zero.

Inflation is up. The stock market is down. Unemployment is just 3.5 percent. Yet labor force participation remains stubbornly low, with only 62.3 percent of the civilian population working or actively looking for work—well below pre-pandemic levels. And even before the pandemic, that figure had been steadily declining for years.

There are plenty of uncharitable theories about why the American work force is shrinking as a percentage of the population, resulting in 10 million unfilled jobs and a lot of well-wrung hands. The most common is simply that Kids These Days don’t want to work and it’ll be Gen Z’s fault when the U.S. is no longer a global economic superpower.

A substantial number of younger people are not, in fact, keen to get hitched with an employer. In 2022, “for every [25- to 54-year-old] guy who is out of work and looking for a job,” American Enterprise Institute economist Nicholas Eberstadt told the Fifth Column podcast, “there are four guys who are neither working nor looking for work.” – READ MORE