Whether it was caregiving responsibilities, feeling discouraged after a long stretch of unemployment or the realization they’re sitting on a pile of money, many Americans have left the workforce entirely. According to Labor Department estimates, 720,000 people left the workforce in June alone, contributing to a total of about 1 million departures over the past year. The labor force participation rate for individuals 16 and older dropped to 61.5% in June, the lowest level since March 2021 and, excluding pandemic-era lows, the lowest point in five decades.
Economists are divided regarding the primary drivers of this trend. While some older workers may be retiring early due to a booming stock market and healthy 401(k) balances, this does not account for declines in the 25 to 55 age demographic. Similarly, while return-to-office mandates have prompted some women to leave the workforce due to high caregiving costs, the participation rate for men has also seen a decline.
Bill Adams, chief U.S. economist at Comerica Bank, warned that a sustained workforce decline could dampen U.S. economic growth. Adams noted that while productivity is growing at a healthy pace, the economy is failing to bring enough workers into the labor force to sustain historical growth levels. Although the unemployment rate fell from 4.3% to 4.2% in June, Glassdoor chief economist Daniel Zhao characterized this as a negative development, noting that the rate is falling because fewer people are looking for work rather than an increase in hiring.
ZipRecruiter economist Nicole Bachaud suggested that many long-term unemployed individuals have become so discouraged by a difficult job market that they are exiting the workforce entirely. Michele Evermore, a senior fellow at the National Employment Law Project, echoed this sentiment, noting that the job search process has become a significant headache in 2026. Evermore added that some individuals may be taking time to learn new skills or return to school in response to shifting employer expectations driven by artificial intelligence.
Jasmine Tucker, vice president of research at the National Women’s Law Center, emphasized that return-to-office mandates disproportionately impact women, who often bear the brunt of caregiving responsibilities. Evermore further noted that these mandates may also hinder employees with disabilities from maintaining their positions. For older workers, the participation rate for those 55 and older fell to 37.1% in June, a 21-year low. Beyond financial comfort, Evermore pointed out that physical health often dictates the timing of retirement for many individuals. As the U.S. population ages, Adams concluded that the country must prepare to manage worker shortages stemming from these demographic shifts.
After a year of historically weak hiring in 2025, ZipRecruiter economist Nicole Bechaud told USA TODAY that longtime unemployed people may be so discouraged they are leaving the market entirely.
"Somebody who became unemployed a year ago, when it was really, really hard to find a job, is likely still unemployed right now," Bachaud said, adding employers may prefer to hire "somebody who just recently left their job, or who’s still working another job."
