Working hard, or hardly working?

Less work, no play and prices are anything but dull

The pandemic is unofficially officially over, metros are buzzing again, and baseball is back! Thus concludes cheerful tidings from Random Walk.

Things we think

No work

It remains true that the percentage of people working or looking for work (the “Labor Force Participation Rate”) remains stubbornly below pre-pandemic levels. If, however, you look at the percentage of prime age workers (25-54 year olds) in the workforce—the blue line—it’s actually getting pretty close to pre-pandemic levels:

Hooray! See, people still work! Everything is fine.

On the other hand, it suggests that the overall worker-loss is permanent, i.e. an LFPR barely above 60% is the new normal. It’s just demographics, you see. An aging population means that the share of prime-age workers is shrinking—even if the young and hardy get back to work full steam ahead, there are simply fewer of them, so overall LFPR is going to stay depressed. We were heading that way to begin with, but the pandemic accelerated the process bec…