Labor force participation rate has dwindled rapidly under the Obama administration

• February 18, 2014 2:28 pm


The labor force participation rate, a key indicator of economic strength, has undergone a sharp decline during the Obama administration, according to the Bureau of Labor Statistics.

The rate of labor force participation has fallen 2.7 percentage points overall under the Obama administration, with declines every year, from 65.7 (2009) to 64.8 (2010) to 64.2  (2011) to 63.7 (2012) to 63.6 (2013) to 63.0 for January 2014. Labor participation has stayed the same or fallen in 43 of the past 60 months that President Obama has held office.

Obamacare and the failed stimulus package have both weakened the economy in that time.

The president's federal health care law will reduce hours worked by the equivalent of nearly 2.5 million jobs over the next 10 years, according to the nonpartisan Congressional Budget Office (CBO). That same CBO report also said that labor force participation would decline to 60.8 percent by 2024, with Obamacare in part to blame with its disincentives to work. The unpopular law also failed in its promise to not increase the deficit, and according to the Weekly Standard, nearly 400 employers have cut back on employee hours to keep them below the 30-hour-per-week barrier triggering the Obamacare employer mandate.

In addition, the stimulus package signed by President Obama after he took office did not come close to meeting its promise to reduce unemployment to below 8 percent by 2012.  Labor force participation never rose above 63.8 percent in 2012 and has continued to decline since then.

The rate is calculated by adding up the employed people and unemployed people actively seeking a job and divides that sum by the total working-age population. It is a widely accepted form of economic sluggishness to have people dropping out of the workforce due to frustration and discouragement.

Labor force participation bottomed out in December, hitting 62.8 percent, the lowest point since the Carter administration in 1978. President Obama's supporters touted the unemployment rate's drop to 6.7 percent, the lowest of his presidency, but that number was hollow. After December's dismal economics report that revealed only 74,000 new jobs, Business Insider posted a chart showing the United States would have 10.8 percent unemployment if it'd had the 30-year average labor force participation.

President Obama discussed the dropped unemployment rate during an address Wednesday about his support for raising the federal minimum wage, but he did not mention the dwindling participation.

"After the worst economic crisis in generations, our economy has been growing for the past four years, and our businesses have created 8.5 million new jobs," he said. "Unemployment rate has come down."

Economists point to Federal Reserve research on more and more Baby Boomers retiring and thus lowering the participation number, which peaked in the late 1990s at 67.2 percent. A 1999 study from the Bureau of Labor Statistics takes that into account and still projected that in 2015, the participation rate would be 66.9 percent and not fall to 63.2 percent until 2025.

When former President George W. Bush was inaugurated for the second time in 2005, the rate stood at 65.8 and was nearly unchanged when President Obama took over in 2009 (65.7 percent).