The U.S. labor force participation rate has quietly returned to levels last seen in the 1970s (outside the recent pandemic). It increasingly seems to signal a structural shift in how society works, with a shrinking share of adults participating directly in the production of goods and services. The consequences extend well beyond slower economic growth.
Some implications:
- A growing share of U.S. society has no direct stake in labor markets.
- As fewer adults work or seek work, a larger fraction of voters experience the economy mostly as consumers, retirees, or rentiers, not as workers.
- That changes political incentives around wages, immigration, AI, taxation, and redistribution.