U.S. labor participation rate falls below UK’s (for first time in 36 years)

U.S. labor participation rate falls below UK’s (for first time in 36 years)

The labour force participation rate – the proportion of adults who are either working or looking for work – started to decline in the US in 2000 and has plunged since 2008 from 66 to 63 per cent.

The equivalent of 7.4m people are no longer part of the labour force. Yet participation in the UK has held up remarkably well despite the country’s prolonged downturn and now stands at 63.6 per cent – the first time in 36 years that it has been higher than the US rate.

Economists have been surprised by the trends, not least because the US labour market has long been seen as one of the most resilient and flexible.

“America is even more flexible than us and yet there is this complete contrast,” said Paul Gregg, economics professor at the UK’s Bath university.

Gary Burtless, a senior fellow at the Brookings Institution think-tank in Washington, said the US used to stand out among rich countries for its high labour force participation but that was no longer the case.

“The US used to have a reputation for being very hard working,” he said.

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