It’s time we view sensational economic milestones with a much-needed dose of skepticism. In the year of forever layoffs, what else could go wrong? Turns out, a lot more than we anticipated. A record 105.8 million Americans are now sitting outside the labor force, surpassing the depths of the Great Recession and the peak of the COVID-19 lockdowns.
According to figures from the Federal Reserve Bank of St. Louis, the number of adults who are “not in the labor force” (NILF) has reached an all-time high in June, at 105.8 million. The record comes after a significant surge of 832,000 workers dropping out of the workforce in June alone.
It should be noted that the definition of NILF is broad; it covers all Americans age 16 and over who aren’t currently working, including retirees and students.
“We’ve got a big problem…with the flight from work of prime-age men. And what’s been carrying the overall prime-age labor force participation has been the strong involvement of women, not men,” said labor economist Nicholas Eberstadt, who holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute.
A record 105.8 million Americans are now sitting outside the labor force, surpassing the depths of the Great Recession and the peak of the COVID-19 lockdowns. (Image: Pexels)
Behind the numbers
According to figures, roughly 5.3 million workers – 5% of NILFs – have dropped out of the American workforce because they are discouraged or not looking for work. Furthermore, up to 22% of the American NILF population are on long-term illness, disability, or other forms of benefits, representing more than 23.3 million Americans.
This figure remains higher than the percentage of Americans over 16 in full-time education, which is between 16 and 18%, or just over 19 million Americans.
The largest segment of the NILF population is retirees, who make up to 50% of the total Americans not working. Now, this is not surprising, given the large cohort of baby boomers who are in their golden years.
Around 45% of NILFs are retirees who took standard retirement at the age of 65 or later. Roughly 3-5% retired early.
What’s even more startling is that 59% of Americans in the labor market hit 59% in June. This is the lowest since September 2021, as we emerged from the Covid-19 pandemic. The last time it dropped was after the Great Recession.
“Roughly speaking, there are about 7 million of these men who are out of the labor force for the 25-to-54-year-olds,” said Eberstadt. The issue isn’t limited to men, he argues. “There are about 3.5 million women who are kind of like doppelgangers to this,” he said.
As layoffs in 2026 continue to dominate headlines and labor force participation drops, the focus needs to move toward the figure of 105.8 million Americans. We need policymakers and employers to address this issue so today’s figure doesn’t turn into the new normal tomorrow.
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