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Expert outlines potential causes for the state's low labor force participation rate numbers

By Timoria Cunningham

Posted May 23, 2024

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In April, the labor participation rate landed at 62.5 percent which is the same it was in November 2021. (Lauren Chapman/IPB News)

Indiana’s labor force participation rate fell last month to its lowest point in more than two years.

In April, the labor participation rate dropped to 62.5 percent which is the same rate as November 2021.

There are several potential causes for that decline, according to Rick Farrant. He's the director of communications for Northeast Indiana Works, a regional workforce development organization. Those reasons include retirement, lack of accessible child care and an increase in families getting by with a single source of income.

Farrant also said that some corporations are learning to get by with fewer workers.

"I do think that many businesses, have learned or are learning how to get by with less. So in other words, they're learning how to complete the same task, but be a little more lean," he said.

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Farrant said, with the decline in the labor force, less money is being spent across the state – which could have long-term effects on the economy.

"If people are not working, less money is being poured into the economy ... that's a–that's a big business issue," Farrant said.

The labor force participation rate is the percentage of people 16 and older that are either working or actively looking for work. Those not in the labor force primarily include students, retirees and other non-working populations, such as individuals unable to work due to a disability or illness.

Timoria is our labor and employment reporter. Contact her at tcunningham@wfyi.org.