The Meaning of California’s Low Labor Force Participation Rate

The most recent data on California’s labor force participation rate (the percentage of California adults employed or looking for work) show the rate continuing to decline the past few years, even as job growth is very strong. Why is this? Should workforce practitioners and policymakers in California be concerned? How much does the rate represent increased discouragement among our workforce? Let’s start with the data, turning to EDD’s Labor Market Information Division. Mr. Brandon Hooker of the Division has compiled the chart above (click to enlarge) that tracks the declining labor force participation rate in California since December 2007. The rate has gone from 66.7% in December 2007 down to 62% in the latest month of December 2015. It would be expected that the labor force participation rate would decrease during the Great Recession. But the slide continued even after the Recession ended.