Why Wages and Job Growth Show An Inverse Relationship
The decrease in the Labor Force Participation Rate (LFPR) is what eventually led to job growth slowing but wages increasing significantly. The LFRP represents the number of people who are employed or actively searching for jobs. In February 2020, the LFPR was 63.3%, while it is 62.6% as of June 2023. After the coronavirus pandemic started in March 2020, the LFRP dipped sharply for the rest of 2020 and early 2021, while gradually increasing till June 2023. That being stated, the LFRP hasn't reached pre-pandemic levels yet. As per the United States Census Bureau, demographics are the primary reason why the LFRP has decreased by 0.7% over the past three and a half years. The average population age has increased and people are aging out of the workforce. Figure 1: Change In Labor Force Participation Rate Over The Past Decade (2013 to 2023) ...