But, it is a lot more than economy. There is a long standing idea among some economists that increasing automation and consequent productivity means that less than the full possible labor force should be capable of producing all the goods that a society needs.
This is silly. A society will never stop “needing” more, it’s inherent in the human psyche. The billionaire doesn’t “need” a yacht that 10 feet longer than his neighbor’s, but he will buy it anyway. You don’t “need” a new car when your five-year-old Chevy serves you well, but you “want” a new car anyway. If you have a 42" TV you want a 56". If you have a 56" you want a 65". You don’t “need” to paint the rec room blue because you like it better than tan, but you will, and somebody will have to make the paint for this “useless” improvement. We will never stop “needing” more, just as we will never stop using more and more energy (until society collapses, of course.)
The reason the labor force participation rate is lower than previous times, and as the article linked upthread, is simple. The baby boom is “retiring” more and more people, disproportionate to any previous time in history. Colleges are accepting more and more students, disproportionate to any previous time in history. Neither of those is “bad” and they are both quite real, and both show up in the statistic of “Oh, I’m not looking for a job anymore.”
That is not to say that there aren’t ALSO real, actual “discouraged” workers, particularly those who still cannot find employment equivalent to what they were earning in 2007. Those days may never come back for them, and they may finally, eventually be reduced to accepting lower status and paying positions than they had at one time. Then again, that “one time” was a bubble where money was flowing freely and irresponsibly (not unlike the internet bubble of the 90’s, obviously a narrower and different sector.)
So I am not particularly concerned with this statistic. It was invented precisely to keep clear anomalies like “retirement” and “student” out of the statistics. Neither do I think the solution of excluding those populations entirely to be perfect, but I am unable to think up a way to include them while excluding them, so I live with it. My best suggestion would be to lengthen the period of reportage from 4-weeks to 8 or more, but I suspect the effect would be minimal anyway.
The widely reported “unemployment” statistic is a gross statistic at best, imperfectly massaged for seasonality, but super-widely researched and sometimes revised, and it serves a useful, if imperfect purpose.