Millions of Americans of the best working age have disappeared from the workforce. Not in Canada

According to the most popular barometer of the Canadian and US job markets, both countries have had the best time lately. The unemployment rate in Canada fell below 5% in the summer, the lowest rate since Statistics Canada began tracking the metric using its current methodology, while south of the border it fell to 3 for the second time since 1969. .6%. The only other time was right before the pandemic hit.

But there’s one big and growing difference between the two: Millions of first-class working-age Americans — those ages 25 to 54 — are missing from the workforce, even as that same cohort in Canada continues to grow. Over the past decade, Canada’s top-age workforce has grown by nearly 13%, while the U.S. workforce has grown by just 2.1% and has not yet fully recovered from the shocks of the Great Recession and COVID-19. recession.

Labor market participation is crucial for growth. If there’s no increased productivity, a stalled or shrinking workforce is like attaching a speed limiter to your economy.

The gap is in part due to Canada’s faster overall population growth. For example, in the second quarter of 2022, Canada’s population grew by 1.3% versus 0.3% in the US, where international net immigration has declined since 2016 and reached its lowest level in decades in 2021. , the US has no newcomers to replace them.

But America’s shrinking workforce in its early years is being driven by even more intractable problems. The employment rate of men in that age group has been declining for decades – from 97% in 1960 to 88% today – especially among those with low levels of education, as technology and offshoring reduce opportunities for low-skilled workers. While women between the ages of 25 and 54 entering the labor market offset the decline in men, the Great Recession also reversed that trend, with female participation only recently returning to the same level as in 2008.

As the COVID recovery continues, there have been hopeful signs in recent months that first-age workers are finally re-entering the workforce. America desperately needs that trend to sustain.

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