Minorities and women, especially those in their 20s and early 30s, are returning to the workforce. They’ve been drawn back by rising wages and recruited by employers who may have bypassed them when the supply of unemployed Americans seemed inexhaustible.
The rate of labor-force participation for prime-age adults (25-54) rose more in the fourth quarter of 2018 than in any quarter since 1994, part of a turnaround that started about three years ago. The rate climbed 1.1 percentage points from the end of 2015, reaching a 12-month average of 82 percent.
The participation rate among working-age women, described by Labor Secretary Alexander Acosta as “particularly strong,” has climbed 1.6 percentage points since December 2015, based on the 12-month average. The equivalent rate for men rose only 0.7 points.
The trend is muted for white men and women, but black men and women, as well as Hispanic and Asian women, are reentering the workforce at higher rates than at any other point in the recovery, suggesting the benefits of the expansion are finally reaching most corners of the economy.
Separate Labor Department figures showed more job openings than unemployed people in November, the most recent month for which data was available, continuing a trend that started in early 2018.
The largest gains are among women, particularly those 34 and younger. Men 35 to 54 years old are also being drawn back to the workforce.
Breaking down the data by education, we see a trend that has surfaced many times: The groups who have historically faced the highest unemployment and worst job prospects are returning — in this case, workers who didn’t finish high school. That group has typically been unemployed at nearly twice the national rate.
This change reflects population trends and, possibly, employers’ increased willingness to discard their reservations and preconceived notions. Meanwhile, college-educated workers, employed at much higher rates overall, have continued their long-running slide out of the workforce, though that trend slowed considerably in 2018.
Women of all races and ethnic groups tend to work and seek work at lower rates than men. But they are also seeing larger gains. Participation among Hispanic and African American women has risen significantly more than among their white counterparts. The same is true for black men. Hispanic men, who historically participate in the labor force at high rates, have not gained as much ground, however.
Population dynamics play a role in these figures. White folks in the United States tend to be older, and older Americans are less likely to work. But these trends persist even among prime-age workers, between 25 and 54 years old.
For people with options other than full-time work, it’s a matter of supply, said Joanna Lahey, an economist at Texas A&M University. This can be true of women, who might have a partner in the workforce, she said. It also applies to younger workers, who may pursue additional education if the labor market isn’t enticing.
This flexibility can take many forms. Women who aren’t working typically live with a partner, while more men who aren’t working live with their parents, according to a 2017 analysis by the Brookings Institution’s Hamilton Project.
For others, particularly young black and Hispanic workers, it is a matter of demand, said Lahey, who has written extensively on black women in the labor force. They would like to work, but employers have to be willing to hire them. As earnings rise and the pool of unemployed workers dries up, employers are forced to cast a wider net in their search and call back workers whose résumés they initially discarded.
Research shows employers disproportionately overlook résumés from black and Hispanic candidates.
Since 1989, white applicants were invited to about 36 percent more interviews than their equally qualified black peers, according to Northwestern University sociologist Lincoln Quillian, who analyzed 28 studies on the subject representing 55,842 experimental applications.
Over time, “levels of discrimination remain largely unchanged,” Quillian and his colleagues wrote in an analysis published in the Proceedings of the National Academy of Sciences in 2017. Whites also get 24 percent more responses than Latino applicants, though there’s “modest evidence” that number is falling.
Lahey’s findings, circulated last month as a working paper from the National Bureau of Economic Research, found younger workers were more likely to encounter racial discrimination.
She and her colleagues tracked 149 people as they screened 40 résumés each, purportedly for an entry-level clerical position.
Reviewers spent less time on résumés from black applicants up to 45 years old, which could be inferred based on the applicant’s name and graduation dates. Reviewers concluded those applicants had “worse computer skills and more gaps in their job histories” than equivalent white applicants.