Strong job market lures back workers

Edwina Barnard, 42, hadn’t looked for a job since 2009, when a health issue forced her to leave her position as a human resources professional for a non-profit.

But her doctor recently declared her healthy enough to work again, and so she sent out about 30 applications over the past month. She already drew some interest from one employer, but didn’t get the position.

“It’s a good job market,” says the Hampton, Ga., resident, noting that helped encourage her to revive her career. “I love being employed. I didn’t get my master’s (in human resources) to sit around the house.”

A vibrant labor market in which employers are struggling to find workers continues to draw hundreds of thousands of Americans back into the labor force, which includes people working

and looking for jobs. The shift is especially lifting less-educated workers in their prime working years — many of whom had grown discouraged and stopped job-hunting — teens, older workers and the disabled, Labor Department and UBS figures show.

Many economists expected the labor force participation rate — the share of Americans in the labor force — to resume its longterm decline after recording a sharp run-up, from 62.4% to 63%, in late 2015 and early 2016. The belief was that most Americans on the sidelines already had been enticed back into the favorable job market and any others straggling back in would be overwhelmed by the retirement of an average 10,000 Baby Boomers a day.

But the participation rate has held steady since then as the return of idled workers has offset the Boomer retirements. The labor force swelled by about

700,000 in June and July, pushing the participation rate to

62.9% from 62.7%.

“The strong economy and labor market are bringing more people back to the labor force,” says UBS economist Robert Sockin.

The trend could have significant implications for wage growth and interest rates. The workers returning from the sidelines are keeping the low 4.3% unemployment rate from falling even more rapidly and supplying employers a shadow labor force that may be preventing average pay increases from accelerating more sharply.

That’s helping temper inflation, which could prompt the Federal Reserve to put off an anticipated third interest rate hike in 2017.

Perhaps most encouraging is that participation for Americans age 25-54 in their prime working years has climbed to 81.8% from

81.3% over the past 12 months. While the rate for prime-age men has been stable during that period after falling for several years, the rate for prime-age women has jumped nearly a percentage point to 75.3%.

Driving the rise is increased participation by women with less than a college degree, according to UBS and the Federal Reserve Bank of Atlanta.

That’s consistent with recent gains in jobs and pay by lowwage, less educated workers. Employers have been more willing to consider low-skilled job applicants because of the shrinking pool of available workers, Sockin says.

And, he says, women may be returning to the workforce in greater numbers than men because of strong employment growth in health care, a femaledominated sector, particularly in fast-growing occupations such as home health aides.

Women are also taking advantage of employers’ increasing willingness to provide flexible work schedules, in part, so women can juggle work with childcare, Sockin says.