Where have all the workers gone?

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May 8, 2018

By: Jack Nelson, JLL

Last week we learned big news:  unemployment in the U.S. dipped below 4 percent for the first time since 2000.  Now at 3.9 percent, the jobless rate is reaching historically low levels.  Unemployment was lower during the Korean War and even dipped as low as 1.2 percent during WWII, but 3.9 percent is a significant figure for peacetime.

“The low labor participation rate in the U.S., even while unemployment is declining, indicates a looming labor shortage.”

But the news isn’t all good.  That’s because some 236,000 workers dropped out of the workforce last month.  The labor participation rate – the number of active workers making up the labor force – is low.  Last month, the labor participation rate was 62.8 percent.  The all-time high was 67.3 percent in January 2000. The U.S. lags several industrialized countries, four of which — the United Kingdom (78.8 percent); France (72); Indonesia (69) and Switzerland (68.6) – have participation rates higher than the all time high in the U.S. There are many reasons for this low participation rate but loss of jobs through trade imbalance, offshoring by U.S. companies and increasing automation and technical improvements in the economy are some of the biggest.

6.3 million jobs

The low labor participation rate in the U.S., even while unemployment is declining, indicates a looming labor shortage. In fact, we may already be there. According to a report just released by JLL’s Chief Economist Ryan Severino, a record high 6.3 million jobs remained open and unfilled in the U.S. in January 2018. Meanwhile, the U.S. economy filled 164,000 jobs in April.  At this pace, it would take more than three years for those open jobs to be filled.

The fact is that over the last 70 years, the participation rate for men in the labor force has declined more than 18 percent. At the same time, the participation rate for women in the labor force has declined to 56.7 percent (from a high of 60.3 percent in April 2000.)

Things are worse for Bay Area employers.  Our unemployment rate touched 2.7 percent in March. That’s creating a problem for companies looking to grow, many of which who are already having trouble hiring in the region because of rising housing and living costs.


There are some solutions to alleviating the labor shortage.  Here are three outlined by Severino:

  1. Focus on women. Policies and workplace programs that address gender pay disparities, increase paid maternity/paternity leave, improve work/life balance, provide affordable childcare and generally offer a more flexible schedule are likely to encourage more women to opt back into the workforce.
  2. Focus on flexibility. Policies that facilitate the movement of labor between cities and regions, as well as subsidies for housing and relocation costs could pull more workers back to the workplace.
  3. Focus on education. Better vocational training could produce a better labor pool.  So could increasing college enrollment, especially for students looking to enter the technology field. Similarly, reeducation and retraining for workers displaced by trade, offshoring and automation could keep them in the workforce.

About me

Jack Nelson

I help companies with their office space decisions. Identifying spaces that align with their business goals; growth, experience, productivity and culture. I focus on the people, finding places of work that stimulate engagement, empowerment, and fulfillment. 

You can contact me directly at by phone at +1 (415) 395-4946 or via email at jack.nelson@am.jll.com.




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