The FTR Experts were posed with the question, "Is labor participation changing for good?"
Following The 2021 Outlook, the final session of the FTR Engage virtual speaking series, the FTR Experts sat down to answer listener questions beyond what was covered during the Q&A within the presentation.
- The underlying trend in the labor participation rate is currently lower because of the retirement of the baby boom and the aging of the workforce.
- There was virtual collapse in a lot of areas and economic activity when the shutdown occurred. Many of those people have gotten discouraged, particularly if they’re relatively close to retirement.
- Events like school shutdowns have caused some parents to reevaluate their labor participation. Factors like this cause workers to leave the workforce, and many may not come back.
- We are seeing a long-run downward trend in labor participation and any coming improvement will be nowhere near enough to get us back to where we were pre-pandemic.
- In 2017-18 cycles, we saw manufacturing and construction both doing well, both taking labor away from trucking just as trucking needed labor in order to satisfy the demands of manufacturing and construction. We want to see industries that generate economic activity doing well. So labor participation can be influenced by activities in competing industries. To bring back drivers, we saw signing bonuses and new compensation schemes, more nights at home. That helped bring some drivers back into the labor force.