Obama official: Decline in labor participation began before recession

Fewer U.S. adults held or were seeking jobs before the recession, an Obama administration official said Wednesday.

Betsey Stevenson, a member of the Council of Economic Advisers, told a conference that the decline was partially tied to the economic downturn.

{mosads}“The declining participation rate does reduce our potential economic growth and exacerbates our future fiscal challenges,” Stevenson said at the event hosted by the think tank Peterson Institute for International Economics, according to the Wall Street Journal.

Economists argue the decline in the workforce is due to retiring baby boomers, but Stevenson said that doesn’t completely explain the changing participation in the labor market.

“Not all of the decline in participation we have seen is the result of natural and good developments,” she said. “In fact, the long-term trend of declining participation in employment rates for many groups, such as prime-age men, and particularly young black men, is troubling, and merits a policy response.”  

She said the government should focus on measures that can reverse the downturn, including those that aim to help minority workers who have fared worse than the general population.

Other policies, for instance, could make work hours and telecommunicating more flexible and “allow workers to balance work and family obligations or that allow older workers to remain in the labor force,” she added.