Key takeaways:

• The persistent gender wage gap widened slightly in 2025; women were paid 18.6% less than men on average after controlling for race and ethnicity, education, age, marital status, and state.
• Women are paid less than men across all education levels. Women with a graduate degree earn less, on average, than men with only a college degree.

• The gender pay gap worsened following a year of Trump administration attacks on workers, including cuts to the federal workforce; attacks on diversity, equity, and inclusion efforts; ordering mass deportations; and undermining child care and home care providers.
• States can narrow the gender pay gap with policies that guarantee access to paid family and medical leave, mandate pay transparency, raise the minimum wage, and make it easier for workers to form unions.

March 26 is Equal Pay Day, a reminder that there is still a significant pay gap between men and women in our country. The date represents how far into 2026 women would have to work on top of the hours they worked in 2025 simply to match what men were paid in 2025.

On an hourly basis, women were paid 18.6% less on average than men in 2025, after controlling for race and ethnicity, education, age, marital status, and state. After narrowing to a series low of 18.0% in 2024—likely driven by a strong labor market recovery from the COVID-19 recession that lifted wages more at the lower end of the overall wage distribution—the gender wage gap widened slightly in 2025. Though far from a total reversal of the last few years’ progress, the slight worsening in 2025 reflects the slowing of low-end wage growth and the economic consequences of Trump’s first year back in office.

Women are paid less than men due to discrimination associated with occupational segregation, devaluation of women’s work, and societal norms, much of which takes root well before women enter the labor market. The wage gap is smallest among lower-wage workers partly because the minimum wage creates a wage floor. At the 10th percentile, women are paid $1.39 (or 9.1%) less an hour than men, while the wage gap at the middle is $4.12 an hour (or 14.7%). Women at the 90th percentile of their wage distribution are paid $14.05 (or 19.6%) less an hour than men at the 90th percentile of the wage distribution.

Women are paid less than men at every education level

Although women have seen gains in educational attainment over the last five decades, they still face a significant wage gap. Among workers, women slightly outnumber men in the college-educated labor force and are significantly more likely to obtain a graduate degree than men. Even so, women are paid less than men at every education level, as shown in Figure A.

Figure A

Among workers who have only a high school diploma, women are paid 21.5% less than men. Among workers who have a college degree, women are paid 23.8% less than men. That gap of $12.07 per hour translates to roughly $25,100 lower annual earnings for a full-time worker. Women with an advanced degree also experience a significant hourly wage gap of $17.70 in 2025, amounting to over $36,800 annually.

What the data makes very clear is that women cannot educate themselves out of the gender wage gap. Systemic inequities are so persistent that women with advanced degrees are paid less per hour, on average, than men with only college degrees. Men with a college degree only are paid $50.61 per hour on average compared with $49.67 for women with an advanced degree.

Black and Hispanic women experience the largest wage gaps

For Black and Hispanic women, the pay gaps relative to white men are even larger due to compounded discrimination and occupational segregation based on both gender and race/ethnicity. In Figure B, we compare middle wages—or the 50th percentile of each group’s wage distribution—for Asian American/Pacific Islander (AAPI), Black, Hispanic, and white women with that of white men.1

White and AAPI women are paid 81.9% and 93.3%, respectively, of the amount non-Hispanic white men are paid. Black women are paid only 68.3% of white men’s wages at the middle, down from 69.6% in 2024. This is a gap of $9.87 on an hourly basis, which translates to roughly $20,500 lower annual earnings for a full-time worker. For Hispanic women, the gap is even larger: Hispanic women are paid only 64.5% of white men’s wages, an hourly wage gap of $11.06. For a full-time worker, that gap is over $23,000 a year. This disparity has also risen slightly compared with last year.

Figure B

Even when controlling for age, education, marital status, and state of residence, Black and Hispanic women are paid 25.3% and 27.4% less than their white male counterparts, respectively. In other words, very little of the observed difference in pay is explained by differences in education, experience, or regional economic conditions.

Trump administration policies exacerbate lower pay and make it harder to enforce antidiscrimination laws

Over the last year, the Trump administration has repeatedly taken actions that harm women workers, including:

• slashing the federal workforce;
• weaponizing agencies meant to defend workers and combat discrimination by turning them into defenders of discriminatory practices;
• eliminating enforcement of race- and gender-based equal employment practices for federal contractors;
• ordering mass deportations;
• undermining child care providers and vital state funds;
• limiting access to funding for higher education;
• rolling back protections for home care workers; and
• normalizing harassment and retaliation in the workplace.

Black and Hispanic women have endured and will continue to suffer the consequences of these attacks more intensely than many of their white, non-Hispanic male colleagues. Trump’s reckless decimation of the federal workforce, for instance, has disproportionately affected Black women, for whom government jobs have historically been a powerful tool for economic mobility and security. In 2025, Black women’s employment rate fell by 1.4 percentage points to 55.7%. This is one of the sharpest one-year declines in the last 25 years and is a much more dramatic drop than that of other women or Black men. College-educated Black women experienced the largest drop in employment, likely because nearly half of Black federal government workers have a bachelor’s degree or higher. This drop in well-paid, traditionally stable jobs will almost certainly lead to increased economic insecurity. Additionally, mass deportations will likely reduce jobs for both immigrant and U.S.-born women, particularly in the care sector, disproportionately impacting Hispanic women.

The Trump administration has also stifled the government’s ability to protect workers and penalize discriminatory employers. The restriction of the use of words like “gender,” “race,” “equity,” and “discrimination,” and attempts to weaponize the Equal Employment Opportunity Commission (EEOC) against women and workers of color will harm all workers, while weakening our ability to track pay equity and enforce nondiscrimination laws. Staffing levels at the EEOC have fallen steadily over the last four decades, but recent funding cuts and shifting priorities will exacerbate its already reduced capacity for enforcement. There have also been ongoing threats to the availability and continued collection of key data throughout federal agencies. If agencies that collect data on wages and incomes by demographic characteristics pull back, it would be a disaster for anyone—policymakers, researchers, employers, or workers—who wants basic facts about how well the economy is performing for different workers and different sectors.

Despite federal threats, states can help close the gender pay gap

Closing pay gaps by gender and by race and ethnicity will require policy solutions on multiple fronts. Although attacks on gender and racial equity continue at the federal level, state lawmakers can and must take steps to address the gender wage gap. Potential solutions include enacting pay transparency laws, mandating Paid Family and Medical Leave (PFML), raising the minimum wage, funding universal child care, and removing anti-worker, so-called “right-to-work” (RTW) statutes. Figure C highlights the states that have already passed some of these critical pieces of legislation, while underscoring the need for strong federal standards to cover the millions of workers who live outside of these states.

Figure C

Only 14 states have mandatory, comprehensive PFML policies, even though they provide essential benefits that help workers maintain their livelihoods while taking care of themselves and their families. Studies show that access to PFML improves outcomes for parents and children, workforce participation, and job retention, and that this a beneficial policy for both employees and employers. Access to paid leave is also shown to bridge racial gaps in care and pay.

Pay transparency laws are another useful tool that prevents employers from offering unequal pay by requiring them to include wage information in job postings. While there is some variation in laws, all include some requirement that employers provide salary information in job postings, but employers in Connecticut, Maryland, and Rhode Island only must furnish that information if requested by applicants. This wage transparency has the potential to reduce gender-based discrimination by arming jobseekers with more information and limiting employers’ ability to pay different amounts to similarly qualified candidates. A Colorado pay transparency law, for example, reduced gender wage gaps for workers who changed jobs by as much as 8.9%.

Policymakers effectively stopped protecting workers’ rights to form unions and bargain collectively starting in the 1980s, resulting in less leverage for workers and increased income inequality. Weak labor law allows employers to retaliate against union organizing and undermine workers’ right to collectively bargain. Union contracts can help narrow gender and racial wage gaps by providing clear wages for a given level of experience and education, reducing employers’ ability to discriminate in wage setting. Unfortunately, 26 states have RTW laws that make it even harder for unions to effectively organize and bargain for better contracts. States with these laws not only have lower unionization rates but also have wider gender wage gaps. By making it easier for workers to form unions, policymakers can help reduce these pay gaps.

The minimum wage keeps wages from falling below a mandated floor. While the real value of the federal minimum wage has been allowed to decline, down nearly $5 an hour since its peak in 1968, states have stepped in and increased their minimum wage. As of January 2026, 30 states and D.C. have minimum wages higher than the federal minimum, covering more than half of U.S. workers. Since women are disproportionately found in the low-wage workforce, these laws are key to increasing their economic security and narrowing wage gaps at the lower end of the wage distribution.

Although there is no single policy that will close the wage gap, each of these solutions will narrow it and improve conditions for workers across the country. In his first year back in office, Trump has rolled back critical labor standards, decimated federal unions, and laid off tens of thousands of federal workers. Now, more than ever, it is critical that states step up to protect workers under attack, prevent the gender wage gap from expanding, and build an equitable economy that works for all. 

1. Race/ethnicity categories are mutually exclusive in this analysis. Here we denote white to mean white non-Hispanic, Black is Black non-Hispanic, Asian American/Pacific Islander (AAPI) are AAPI non-Hispanic, and Hispanic refers to Hispanic of any race.

Key takeaways:

• Trump has weaponized the EEOC to go after employers with diversity, equity, and inclusion (DEI) programs, accusing them of “reverse racism” against white workers—but nothing in the EEOC’s own data points to evidence of systemic discrimination against white workers.
• People of color have made up a growing share of the U.S. working-age population since 1989, while the share of the white working-age population has fallen from 76.9% in 1989 to 55.4% in 2025.
• According to data submitted to the EEOC by large employers, workers of color make up more than 40% of the workforce but hold only 1 in 5 executive or senior-level positions—a pattern that contradicts the administration’s narrative of bias against white workers.

Trump’s Equal Employment Opportunity Commission (EEOC) recently opened a federal investigation into Nike and its diversity, equity, and inclusion (DEI) initiatives—alleging systemic discrimination against white workers. This is the first time the EEOC has targeted a large private employer with a federal investigation and subpoena explicitly linked to their DEI initiatives and hiring goals. Shortly thereafter, the EEOC sued a Coca-Cola bottling company for sex discrimination following a networking event it held for female employees. The EEOC chair closed a busy February with a letter to Fortune 500 companies, warning them about “unlawful discrimination” related to their use of DEI initiatives.

These recent EEOC actions reflect Trump’s undue control over the agency and his administration’s effective weaponization of the EEOC to fight against DEI, a broad set of programs and initiatives designed to remedy the long and well-documented history of systemic injustices against people of color and women in the labor market. Established by the Civil Rights Act of 1964, the EEOC has operated as an independent federal agency throughout its 60-year history enforcing employment nondiscrimination laws—until last year.

EEOC Chair Andrea Lucas has repeatedly affirmed her commitment to redirecting the EEOC’s priorities toward those of the administration; she has made the scrutiny of DEI programs and initiatives a top enforcement priority. This restructuring of EEOC priorities follows the administration’s revisionist version of history that centers white men—not people of color and women—as the primary victims of labor market discrimination. In an unprecedented move last December, Chair Lucas actively solicited discrimination complaints from white male workers, arguing that DEI initiatives function as illegal quotas that make it easier for employers to discriminate against white men. Previous EEOC chairs have avoided using their platform to solicit charges from specific demographic groups. In January 2026, the Republican majority voted to give the chair more power to decide which matters reach the full commission and to require nearly all litigation to be approved by the commissioners. The vote to centralize power with the chair and Republican majority completely neutralizes bipartisan decision-making over which cases to pursue.

Right-wing commentators have cited a now debunked report that over 90% of new corporate hires were people of color as evidence of DEI gone too far. In this post, we expose the fallacy of such claims by showing increased employment among people of color is consistent with demographic changes in the working-age population. The Trump EEOC’s targeting of employers with programs aimed at improving hiring and promotion of historically underrepresented groups defies the ongoing demographic changes of the U.S. labor force and the spirit of the Civil Rights Act that created the agency. Under current law, anyone who believes they’ve experienced discrimination based on race, sex, color, religion, national origin, age, and disability can file a charge. By prioritizing so-called “reverse discrimination,” fewer of the underfunded agency’s resources will be available to investigate systemic inequities against workers of color or members of any other protected class.

DEI programs or not, the U.S. working population is increasingly more diverse and less white

 As Trump’s EEOC goes after private employers based on their efforts to improve workplace diversity, equity, and inclusion, it is important to understand that non-Hispanic white workers are a smaller share of the U.S. workforce than they were decades ago. In 1989, for example, more than 3 out of 4 people between the ages of 16 and 64 were white (see Figure A). This share declined by 28% over the course of the last three decades. In 2025, just over half (55.4%) of the U.S. working-age population was white. People of color, on the other hand, have become an increasing share of the working-age population since 1989.

Figure A

Last year, more than 2 in 5 individuals between the ages of 16 and 64 were either Hispanic, Black, or Asian American and Pacific Islander (AAPI). This figure nearly doubled between 1989 and 2025. A significant share of this growth can be attributed to the growth of the Hispanic working-age population, which nearly tripled over the course of the last three decades with increased immigration.

Figure B

This demographic shift is most evident among younger workers—the new hires who will gradually replace less diverse cohorts of older workers as they retire. Nearly 1 in 2 individuals between the ages of 16 to 24 are either Black, Hispanic, AAPI, or American Indian and Alaska Native (see Figure B), up more than 80% since 1989. Based on these numbers, it is only logical that historically underrepresented groups of workers account for a larger share of employment now and in the future than they did decades ago—regardless of DEI initiatives. In fact, workplaces that reflect the growing diversity of the labor force are a sign of less discrimination, not of a bias against white workers. Moreover, employers who set and pursue DEI goals that develop the talent and career growth of workers of color are making forward-looking investments in the leadership of the future workforce. This has been a primary motivation and justification for many DEI initiatives.

Despite the growing diversification of the U.S. workforce, EEOC data suggest that people of color continue to be underrepresented in leadership positions

While Trump’s EEOC targets and accuses employers with equity initiatives of bias against white workers, demographic statistics reported to the regulatory agency paint a different picture when it comes to representation in leadership roles. Private employers with 100 or more employees and federal contractors with 50 or more employees are required to file an annual EEO-1 report. These data are used to support EEOC enforcement efforts and can raise flags about systemic patterns of discrimination. Based on publicly available EEO-1 data for 2023 (latest year), white workers are significantly more likely to be overrepresented in leadership positions (see Figure C). In 2023, for example, Black, Hispanic, AAPI, and AIAN workers accounted for more than 40% of workers in all job categories at EEO-1 reporting firms, but only about 1 in 5 employees in executive- or senior-level positions. Similarly, less than 1 in 3 workers in mid-level, managerial positions identified as Black, Hispanic, AAPI, or AIAN in 2023.

Figure C

Table 1 presents the 2023 data along with data for 2020—the year several private employers launched DEI initiatives in response to the racial reckoning that followed the murder of George Floyd at the hands of police officers—and 2017. While it is impossible to disentangle DEI from demographic and pandemic effects based on these data alone, we can see changes in the racial composition of employees at EEO-1 reporting firms over these years that are generally consistent with changes in the working-age population shown in Figure A. More importantly, nothing in these statistics points to evidence of systemic “DEI-motivated discrimination” against white workers. Relative to the preceding three years, between 2020 and 2023, there was a larger increase in the share of all people of color employed in executive-/senior- level and first-/mid-level management positions—3.7 and 3.3 percentage points, respectively—but white workers remained significantly overrepresented in these roles. Throughout the entire period, Black and Hispanic workers remained grossly underrepresented relative to their share of all positions.

Table 1

The Trump EEOC’s intentional diversion of attention and resources away from more prevalent forms of discrimination will hurt all workers

Aggregate results alone neither qualify nor disqualify a charge of discrimination against a specific employer. All charges, whether filed by an individual or an EEOC commissioner, are individually investigated— a process involving extensive information gathering and detailed examination of the facts to assess the merits of the charge. The administration’s aggressive search for evidence of “reverse discrimination” diverts the limited resources of an already understaffed and underfunded agency away from investigating more prevalent forms of racial and gender discrimination that are consistent with persistent racial and gender wage gaps and patterns of occupational segregation.

It would be a mistake to assume that Trump and the Republican majority leading the EEOC don’t understand the nature of demographic changes in the U.S. population and labor market. The administration’s campaign against DEI initiatives and accusations of bias against white male workers represent an emboldened assertion of white supremacy to stoke fear and to recast growing racial, ethnic, and gender diversity as a threat to social and economic advantages historically afforded to white men. This is a strategy that has often led to periods of slower economic growth and greater economic inequality. In the end, it not only makes the American workplace less fair, but it also risks lowering the standard of living for all working people and their families. 

In 2025, Black women’s employment rate fell by 1.4 percentage points to 55.7%. This is one of the sharpest one-year declines in the last 25 years (see Figure A). The decline among Black men and white women was no more than 0.5 percentage points each while employment rose slightly for Hispanic (+0.6 percentage points) and AAPI (+0.4 percentage points) women. At 55.7%, Black women’s employment-to-population ratio (EPOP) was well below the most recent peak of 57.8% in 2023, reflecting employment losses that started in 2024 and accelerated in 2025. These estimates are also available in EPI’s State of Working America Data Library.

Figure A

The decline in Black women’s employment over the last year included exits from the labor force and rising unemployment among remaining jobseekers. Their labor force participation rate dropped from 60.6% in 2024 to 59.7% in 2025 as the unemployment rate rose from 5.8% to 6.7%.

A closer look reveals that college-educated Black women experienced the greatest drop in employment and labor force participation rates. As shown in Figure B, the EPOP for Black women with bachelor’s degrees fell by 3.5 percentage points over the last year—a much larger decline than any other education category, including those who are not college graduates. Similarly, the labor force participation rate declined most for Black women bachelor’s degree holders—down 2.3 percentage points in 2025.

Figure B

Large employment losses and labor force departures among college graduates were a direct consequence of the Trump administration implementing massive federal layoffs and buyouts over the last year, a sector where nearly half of Black workers have a bachelor’s degree or higher. Analysis of Current Population Survey (CPS) microdata further supports this as a driving factor. Figure C presents changes in the number of Black women employed by self-reported sector and industry of employment between 2024 and 2025. Notably, it shows that the overall net loss in employed Black women was driven entirely by public-sector losses, with most job losses in federal government.

While Black women saw a net increase in private-sector employment in 2025—primarily in the growing education and health services industry—there were net losses in six of the 12 major private-sector industries. Among the net losses, 33% occurred in other services, followed by 25% in manufacturing, 21% in financial activities, and 15% in professional and business services. The other services industry includes establishments primarily engaged in repair and maintenance and personal and laundry services, as well as work for private households and religious, grantmaking, civic, and professional organizations.

To put a finer point on the dominant influence of Black women’s employment losses on rising Black unemployment in 2025, Figure C also shows that Black men reported a net gain in the total number employed. Black men had a much smaller decline in federal government employment and relatively fewer industry-specific private-sector losses.

Figure C

While this analysis offers more details about the decline in Black women’s employment, the biggest looming question remains unanswered: Why do federal and private-sector employment losses seem so targeted to Black women? Whether those losses are an early indication of more widespread job losses to come—or casualties of anti-equity backlash in action—could become clearer in the months ahead.

Key takeaways

• Proposed state legislation to extend full, equal collective bargaining rights to all state and local government workers can help Virginia:
  • reduce the state’s large public-sector pay gap
  • improve public services
  • reduce staff vacancies and turnover
  • decrease racial and gender wage disparities
• Strong collective bargaining rights and increased unionization rates are highly correlated with numerous, widely shared benefits including higher wages, more equitable state economies, and healthier democracies.
• Virginia currently has one of the largest public-sector pay gaps in the nation. State and local government employees in Virginia earn, on average, 26.7% less than private-sector peers with similar education and experience.
• The public-sector pay gap varies across states and is largest in states like Virginia where most public employees lack collective bargaining rights. In Virginia, collective bargaining is currently banned for state employees and only recently became permitted for some local government employees.

In 2026, Virginia lawmakers are poised to consider transformative legislation that would extend full collective bargaining rights to public employees at all levels of state and local government. The benefits of comprehensive collective bargaining rights would extend far beyond affected public employees who would enjoy better working conditions. Stronger state collective bargaining laws can help improve the quality of public services and economic outcomes for all Virginians.

Data show that strong collective bargaining laws help states address persistent public-sector pay gaps, reduce staff vacancies and turnover, and lead to higher unionization rates (Morrissey and Sherer 2024). Increased unionization rates are highly correlated with numerous, widely shared benefits including more equitable state economies and healthier democracies (McNicholas et al. 2025).

For Virginia, expanding public-sector bargaining is a critical next step in building an economy that works for all. The expansion will reverse a long history of anti-worker state policies that have suppressed wages and limited workers’ power in the labor market by blocking pathways to unionization. Such policies have resulted in greater income inequality and persistent racial and gender wage disparities (Bivens and Shierholz 2018; Mishel and Bivens 2021). Strong, comprehensive state legislation covering public employees’ labor rights is also especially important at a moment when the federal government has been attacking the jobs, working conditions, and union contracts of over 235,000 federal civil servants residing in Virginia, and threatening long-standing federal protections of all workers’ rights (EPI 2025b; Oakford and Poydock 2025). 

This report examines how public-sector workers with limited or no collective bargaining rights fare compared with public-sector workers with well-established collective bargaining rights. To do so, we estimate pay differences between state and local government workers and private-sector workers with similar education and experience. In this analysis, Virginia is among a minority of states in which state employees have no bargaining rights and only some local government employees have limited bargaining rights. By contrast, 27 states have well-established collective bargaining rights for state and local government workers (Table 1).

The right to bargain collectively over pay is associated with higher unionization rates (union membership as a share of the workforce) in a given state. This report shows that collective bargaining rights and union strength help state and local government workers narrow the pay gap with private-sector workers. We show that the pay gap for public employees is significantly larger when these workers have weak or no bargaining rights, like public employees in Virginia, which has one of the largest public-sector pay gaps in the nation (-26.7%).

Virginia public employees lack collective bargaining rights

Proposed legislation in Virginia would, for the first time in the state’s history, guarantee that all state and local government employees enjoy labor rights similar to those of their private-sector peers (whose rights to collectively bargain are covered under the federal National Labor Relations Act) (HB 1263 and SB 378). The Virginia Assembly passed similar legislation (HB 2764 and SB 917) in 2025, only to have it vetoed by then-Governor Glenn Youngkin (McGinley 2025). 

Virginia is one of a handful of Southern states that for decades explicitly banned public employees and employers from entering into collective bargaining agreements. In 2020, Virginia took an important step toward making collective bargaining newly optional for local governments, but the state’s policies remain out of step compared with most states. Virginia lacks a statewide collective bargaining statute covering all local government employees and still has a ban in place barring state employees from collective bargaining (Borja 2022).

As shown in Table 1, the majority of states and Washington, D.C., already ensure collective bargaining rights for most public employees, including state workers. Many states have had statewide public-sector bargaining statutes in place for decades (Rueben 1996; Sanes and Schmitt 2014). Such laws typically set clear, uniform guidelines for union elections and contract negotiation processes and establish state labor boards charged with fostering productive labor-management relations (including timely contract settlements), ensuring broad awareness of and compliance with statutory guidelines, and mediating or adjudicating disputes as needed.

Table 1

Who are public employees in Virginia?

In 2024, approximately 560,000 Virginians worked in state and local government occupations (BLS-CES 2020–2025). This includes teachers and school staff, firefighters, transit operators, law enforcement, administrative staff, and employees serving the state’s public safety, transportation, health care, judicial, corrections, and higher education systems. As shown in Table 2, 21.2% of Virginia state government employees and 20.4% of Virginia local government employees are Black, and 57.3% of state government employees and 64.5% of local government employees are women. Many public-sector workers in the state are highly educated. Virginia public-sector workers are more than twice as likely to have advanced degrees as private-sector workers and are much less likely to have a high-school level or less education.

Table 2

Anti-union state policies are rooted in racism and harm all Virginia workers

Virginia’s ban on union contracts for public employees is a Jim Crow-era policy with deep roots in the history of slavery and white supremacy. After the passage of federal labor laws accelerated worker organizing in the 1930s, Virginia joined several Southern states in adopting anti-union state laws designed to prevent multiracial union organizing and suppress Black workers’ wages and power (Childers 2023). The Virginia Assembly first took an explicit stance on public-sector bargaining in response to the unionization of Black hospital employees at the University of Virginia in 1946, via a joint resolution declaring it against the public policy of the state to negotiate with public employee unions (a stance later affirmed by state supreme court decisions and codified in statute in 1993). Virginia was also among the first states to adopt anti-union so-called right-to-work legislation in 1947, an anti-labor policy jointly promoted by white supremacist organizations and industry groups intent on slowing the growth of unions to maintain access to cheap labor—especially in Southern states (The Commonwealth Institute 2022; Watts 2021; Pierce 2017, 2018; Sherer and Gould 2024).

As a result of these long-standing anti-union state policies, unionization rates in Virginia for both public- and private-sector workers are well below national averages.

Figure A

Narrowing Virginia’s large public-sector pay gap

Across the country, public-sector employees earn less than their private-sector counterparts, and this pay gap has widened in recent years. In the latest available five-year period (September 2020–August 2025), state and local government employees earned, on average, 17.2% less than private-sector employees with similar education and experience. The size of the public-sector pay gap varies across states and is largest in states like Virginia where most public employees lack collective bargaining rights. Public-sector workers with strong bargaining rights experience a narrower pay gap (-14.3%) than those with weak (-19.6%) or no bargaining rights (-22.5%) (see Table 3).

Virginia currently has one of the largest public-sector pay gaps in the nation. Among all 50 states, Virginia’s -26.7% public-sector pay gap appears to be the second highest, though differences among states clustered at the bottom of the rankings are not statistically significant. (Pay gap statistics are for full-time wage and salary workers ages 18–64, based on the authors’ analysis of pooled September 2020–August 2025 Current Population Survey microdata downloaded from Flood et al. 2025 and EPI 2025a.)

Compensation packages of public employees, on average, include more robust benefits than those of private-sector workers, but Virginia’s public-sector compensation gap remains large, even when factoring in more robust benefits. Benefits are an estimated 32.0% of pay for private-sector workers in the South Atlantic region and an estimated 51.3% of pay for Virginia public-sector workers. Factoring in benefits, Virginia’s public-sector compensation gap shrinks to a still sizable 16.0% (authors’ estimate based on BLS-ECEC 2020–2025 and Public Plans Data 2020–2024; see Morrissey and Sherer 2024 for methodology).1

Table 3

Addressing high staff vacancy and turnover rates in Virginia’s public sector

The growing public-sector pay gap has become a particular concern at a moment when low pay has created serious challenges to recruiting and retaining teachers and other public employees across the country (Cooper and Martinez Hickey 2022; MissionSquare Research Institute 2023; Wething 2024a, 2024b; Martinez Hickey 2025). Virginia has faced particularly acute staffing shortages in public education and in units of state government in recent years (Manzanares 2025; Cantor 2025).

The latest (2025) biennial compensation report from the state’s Department of Human Resource Management notes that “Years without any salary adjustments in the past have made it difficult for state agencies to build a proactive and sustainable approach to addressing compensation, recruitment and retention concerns” (VDHRM 2025). Between 2001 and 2023, low average salary increases for state workers (just 2.9% per year, compared with 3.4% annually in the private sector) have led to high vacancy and turnover rates. As of 2024, roughly 1 in 5 (22.4%) state jobs were unfilled, and the median salary across the state workforce was just $61,305—a full $5,000 less than the median city employee salary in Richmond, which has adopted its own collective bargaining ordinance (McGinley 2025).

Chronic state employee staffing shortages are already having direct impacts on the health, safety, and quality of life of Virginians. To take one example, in 2025 the Virginia Department of Juvenile Justice (DJJ) drew headlines after reporting that inability to adequately staff large facilities for incarcerated youth had led to unsafe conditions, lockdowns, increased restrictions on out-of-cell time, and a lack of rehabilitative services. DJJ directors indicated ongoing difficulty recruiting for open positions, despite participating in job fairs, college and university visits, outreach to military and veteran communities, and offering signing bonuses and referral incentives (Manzanares 2025). The root causes of understaffing identified by Virginia state agencies like DJJ—from burnout and high workloads to low starting salaries, lackluster raises, and difficult or unsafe working conditions—are precisely the topics that a structured collective bargaining process would allow state agencies to address, with direct input from frontline employees.

Addressing racial and gender pay gaps to improve recruitment and retention of workers of color and women

The public-sector pay gap disproportionately affects Black workers and women, who are more likely to be employed in public-sector jobs and who are disadvantaged in the broader labor market (Childers 2025). Strengthening collective bargaining rights for government workers in Virginia therefore promises to narrow the pay gap and reduce racial and gender inequalities in public institutions and across the labor market.

For example, a 2024 RAND report showed that Black teachers nationally receive lower average salaries and pay raises than white teachers do, a difference linked directly to the fact that Black teachers were less likely to live in states where public educators had collective bargaining rights. The inadequacy of pay is one of the main reasons teachers report for leaving the profession, further contributing to the demographic mismatch between teachers and students (e.g., nationwide over half of all students are children of color, but the teaching workforce remains around 80% white) (Steiner et al. 2024; Gopalan 2025). Likewise, data show that in states like Wisconsin where legislators have weakened formerly strong collective bargaining rights in the past two decades, resulting decreases in unionization levels and worker wages have measurably widened public-sector pay gaps and gender pay gaps (Nack et al. 2019; García and Han 2021; Biasi and Sarsons 2022).

Building on success and remedying limitations of current state law that only permits local collective bargaining

In 2020, Virginia partially lifted its long-standing ban on public-sector collective bargaining with legislation creating an “opt-in” system that has allowed local governments to set their own policies on whether and how to bargain with their own employees. While this opening fell far short of creating a consistent statewide framework for collective bargaining, it has resulted in at least 17 of Virginia’s largest cities, counties, and school boards adopting collective bargaining ordinances and creating new pathways to union contracts for substantial numbers of public employees—including, for example, 27,000 teachers and school staff and 12,000 county employees in Fairfax County; nearly 4,000 City of Richmond employees; and others (Borja 2022; Sharma 2022; Khalil 2023; Lukert 2024; Pope 2025; Walter 2026).

The local “opt-in” system was a positive step forward that has already revealed high levels of interest in collective bargaining among Virginia workers. The system resulted in new union contracts covering tens of thousands of frontline educators and civil servants, providing an initial boost to Virginia’s historically low unionization rate.

Significant limitations of the new “opt-in” system have also quickly become clear. As noted above, the major shortcoming of the current law is that it does not ensure equal collective bargaining rights for all public employees. Virginia state employees remain barred from collective bargaining, and in local government where collective bargaining is permitted (but not required), workers continue to lack collective bargaining rights, unless they are able to persuade local officials to adopt and then implement a collective bargaining ordinance. When localities do adopt such ordinances, they may vary in strength and effectiveness (Overman 2023).

As a result, Virginia’s current “opt-in” system for local collective bargaining has generated an uneven patchwork of highly variable (and potentially unstable) collective bargaining policies across the state. Some local governments have continued to block workers’ path to a union contract by rejecting appeals from their own employees to adopt local collective bargaining ordinances (Murphy 2024; Cooper 2025; Lytle 2025; Wilkinson 2025). Because current state law leaves the burden of collective bargaining policy development up to each individual local government, some jurisdictions have expressed interest in or support for collective bargaining while remaining reluctant to invest the necessary time or scarce administrative or legal resources to developing and implementing a local ordinance. Even in larger local jurisdictions with strong collective bargaining ordinances now in place, the “opt-in” system remains fragile and highly vulnerable to instability whenever turnover occurs among elected leaders or administrators with experience necessary to maintain unique local labor-management systems.

Creating a state labor board to provide efficiency and stability for all Virginia public employers and employees

A proposed state labor board equipped to administer a statewide, uniform collective bargaining framework would serve all Virginia state and local government entities and provide consistency, efficiency, stability, and economies of scale. All Virginia public employers and employees would benefit from access to a central, independent state board with capacities to advise public employers and employees about collective bargaining procedures, administer union elections, and mediate contract negotiations. The creation of such state capacities is also especially important at moment when federal labor agencies with similar capacities have been eliminated or rendered non-functional. Indeed, across the country, many states are relying more than ever on their existing state labor boards, and in some cases, are exploring paths to expanding state labor board capacities in order to ensure consistent protections of workers’ rights to unionize and collectively bargain (H.B. 3005; Walter and Madland 2025).

Conclusion

In 2026, Virginia lawmakers should seize the opportunity to enact strong, comprehensive collective bargaining legislation that covers all state and local government workers and creates a state labor board to administer the new system. Under Virginia’s current state law (where collective bargaining is banned for state employees and allowed only for some local government workers), pay for Virginia public employees has lagged far behind that of private sector counterparts with similar education and experience.

Stronger collective bargaining rights can help shrink Virginia’s large public-sector pay gap, reduce racial and gender pay gaps, and improve recruitment and retention of qualified public employees. Removing barriers to unionization for public employees is also a critical step toward reversing the impacts of long-standing anti-worker state policies in Virginia that have for decades suppressed all workers’ wages and contributed to growing income inequality. Lastly, state action to shore up public employee rights is especially important at moment when the federal government is attacking civil servants, public education, health care, and all public services. By extending full collective bargaining rights to historically excluded state and local government workers, state lawmakers can help lead the way to a more vibrant, equitable economy rooted in multiracial democracy in Virginia, the South, and the nation.

Notes

1. If anything, our comparison likely minimizes the public-sector compensation gap in Virginia by comparing benefits for private-sector workers in the South Atlantic region to public-sector workers throughout the country because public-sector data for the South Atlantic region is not available from the Bureau of Labor Statistics. Our comparison does account for the fact that Virginia pension benefits are less generous than public pensions in many parts of the country, though possibly not in two Northern Virginia counties with their own retirement systems. It does not fully account for other differences in benefits between Virginia public-sector workers and their counterparts in other states, though it does account for the fact that public-sector workers in Virginia are covered by Social Security (not true in some states) and adds 1% for public-sector retiree health benefits that are not included in BLS compensation statistics. Finally, it compares all public-sector workers with all private-sector workers, when arguably the better comparison would be between public-sector workers and private-sector workers employed by large employers, who tend to provide more generous benefits than small employers.

References

Biasi, Barbara, and Heather Sarsons. 2022. “Flexible Wages, Bargaining, and the Gender Gap.” Quarterly Journal of Economics 137, no. 1 (February): 215–266. https://doi.org/10.1093/qje/qjab026.

Bivens, Josh, and Heidi Shierholz. 2018. What Labor Market Changes Have Generated Inequality and Wage Suppression? Employer Power Is Significant but Largely Constant, Whereas Workers’ Power Has Been Eroded by Policy Actions. Economic Policy Institute, December 2018.

Borja, Mel. 2022. “How Public-Sector Workers Are Building Power in Virginia.” Working Economics Blog (Economic Policy Institute), February 18, 2022.

Brannick, Priya. 2019. The Janus Impact and Grading of State Public Sector Labor Laws. Commonwealth Foundation, August 2019.

Brannick, Priya M., and Andrew Holman. 2022. The Battle for Worker Freedom in the States: Grading State Public Sector Labor Laws. Commonwealth Foundation, September 2022.

Bureau of Labor Statistics (BLS-CES). 2020–2025. Current Employment Survey, State and Area Employment Data. Accessed January 2026.

Bureau of Labor Statistics (BLS-ECEC). 2020–2024. Employer Costs for Employee Compensation data. Accessed January 2026.

Cantor, Dave. 2025. “Virginia Corrections Department has 2,400 Open Positions.” Virginia Public Radio, August 14, 2025.

Childers, Chandra. 2023. Rooted in Racism and Economic Exploitation: The Failed Southern Economic Development Model. Economic Policy Institute, October 2023.

Childers, Chandra. 2025. “Disinvestment in the Public Sector Undermines Opportunities for Black Women Across the South: Trump Cuts Further Threaten Key Services for Working People Across the Nation.” Working Economics Blog (Economic Policy Institute), July 7, 2025.

Commonwealth Foundation. 2021. “Public Sector Labor Law Database.” Accessed May 9, 2021.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools Is Critical to Solving Staffing Shortages: Federal Relief Funds Can Provide a Down Payment on Long-Needed Investments in the Education Workforce. Economic Policy Institute, February 2022.

Cooper, Tracy. 2025. “Portsmouth Workers Frustrated by Private Collective Bargaining Talks.” 13 News Now, July 22, 2025.

Dippel, Christian, and Zachary Sauers. 2019. “Does Increased Union Power Cause Pension Under-Funding in the Public Sector?” (preliminary draft). September 23, 2019.

Economic Policy Institute. 2025a. Current Population Survey Extracts, Version 2025.12.18, https://microdata.epi.org.

Economic Policy Institute. 2025b. How Many Federal Employees Live in Your State? Accessed January 12, 2026.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, Daniel Backman, Etienne Breton, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, David Van Riper, and Kari C.W. Williams. IPUMS CPS: Version 13.0 . Minneapolis, MN: IPUMS, 2025. https://doi.org/10.18128/D030.V13.0.

Frandsen, Brigham R., and Michael Webb. 2017. “Public Employee Pensions and Collective Bargaining Rights: Evidence from State and Local Government Finances.” Hutchins Center Working Paper no. 35, The Brookings Institution, October 2017.

García, Emma, and Eunice Han. 2021. The Impact of Changes in Public-Sector Bargaining Laws on Districts’ Spending on Teacher Compensation. Economic Policy Institute, April 2021.

Gopalan, Maithreyi. 2025. “Why Does Teacher-Student Demographic Representation Matter for Student Success?” HEDCO Institute for Evidence-Based Educational Practice, October 15, 2025.

Han, Eunice S. 2019. “The Impact of Teachers Unions on Teachers’ Well-Being Under Various Legal Institutions: Evidence from District–Teacher Matched Data.” American Educational Research Association 5, no. 3 (August). https://doi.org/10.1177/2332858419867291.

H.B. 1263, 2026 H.D., Reg. Sess. (Va. 2026).

H.B. 2764, 2025 H. D., Reg. Sess. (Va. 2025).

H.B. 3005, 2025 Gen. Assemb. (Ill. 2025).

International Association of Fire Fighters (IAFF). n.d. “Collective Bargaining” (web page). Accessed May 2024.

Khalil, Jahd. 2023. “Hundreds of Richmond City Employees Select Unions.” Virginia Public Media, June 23, 2023.

Lukert, Luke. 2024. “Fairfax Co. Teachers Vote Overwhelmingly for Collective Bargaining Rights.” WTOP, June 11, 2024.

Lytle, Derek. 2025. “Virginia Beach School Board Sits Divided on Collective Bargaining.” 13 News Now, November 11, 2025.

Manzanares, Keyris. 2025. “Virginia Juvenile Justice System Strained by Staffing Shortages.” Virginia Public Media, April 9, 2025.

Martinez Hickey, Sebastian. 2025. “The School Bus Driver Shortage Has Improved Slightly but Continues to Stress K–12 Public Education.” Working Economics Blog (Economic Policy Institute), November 3, 2025.

McGinley, Sophie. 2025. Building a More Equitable Commonwealth: The Case for Collective Bargaining Rights for Virginia State Employees. The Commonwealth Institute, August 2025.

McNicholas, Celine, Margaret Poydock, Heidi Shierholz, and Hilary Wething. 2025. Unions Aren’t Just Good for Workers—They Also Benefit Communities and Democracy. Economic Policy Institute, August 2025.

McNicholas, Celine, Lynn Rhinehart, Margaret Poydock, Heidi Shierholz, and Daniel Perez. 2020. Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19: 12 Policies That Would Boost Worker Rights, Safety, and Wages. Economic Policy Institute, August 2020.

Mishel, Lawrence, and Josh Bivens. Identifying the Policy Levers Generating Wage Suppression and Wage Inequality. Economic Policy Institute, May 2021.

MissionSquare Research Institute. 2023. State and Local Government Employment Trends, 2023 (issue brief). May 17, 2023.

Morrissey, Monique, and Jennifer Sherer. 2024. The Public-Sector Pay Gap Is Widening. Unions Help Shrink It. Economic Policy Institute, August 2024.

Murphy, Ryan. 2024. “Virginia Beach Rejects Collective Bargaining for City Employees.” WHRO Public Media, April 30, 2024.

Nack, David, Michael Childers, Alexia Kulwiec, and Armando Ibarra. 2019. “The Recent Evolution of Wisconsin Public Worker Unionism Since Act 10.” Labor Studies Journal 45, no. 2: 147–165. https://doi.org/10.1177/0160449X19860585.

National Conference of State Legislators (NCSL). n.d. “Collective Bargaining database.” Accessed May 2024.

National Council on Teacher Quality (NCTQ). 2019. “Collective Bargaining Laws database.” Updated January 2019.

National Education Association (NEA). 2020. “Collective Bargaining Laws for Public Sector Education Employees,” November 2020 (unpublished document used by permission).

New Mexico Public Employee Labor Relations Board. 2023. Public Sector Collective Bargaining by State.

Oakford, Patrick, and Margaret Poydock. 2025. “Trump Is the Biggest Union-Buster in U.S. History: More Than 1 Million Federal Workers’ Collective Bargaining Rights Are at Risk.” Working Economics Blog (Economic Policy Institute), September 2, 2025.

Overman, Stephenie. 2023. “In Virginia, ‘Patchwork’ of Ordinances Makes Public-Sector Organizing a Maze.” Virginia Mercury, January 16, 2023

Pierce, Michael. 2017. “The Origins of Right-to-Work: Vance Muse, Anti-Semitism, and the Maintenance of Jim Crow Labor Relations.” The Labor and Working-Class History Association, January 12, 2017.

Pierce, Michael. 2018. “Vance Muse and the Racist Origins of Right-to-Work.” Expert Forum (American Constitution Society), February 22, 2018.

Pope, Michael. 2025. “Fairfax County May Soon Be the Home of the Largest Collective Bargaining Agreement in Virginia.” WVTF, September 10, 2025.

Public Plans Data. 2001–2024. Center for Retirement Research at Boston College, MissionSquare Research Institute, National Association of State Retirement Administrators, and the Government Finance Officers Association. Accessed January 5, 2026.

Rueben, Kim. 1996. “Extended NBER Public Sector Collective Bargaining Law Data Set” [Stata and Excel files]. Downloadable data available at www.nber.org/research/data/nber-public-sector-collective-bargaining-law-data-set (see last paragraph on this web page). Accessed January 12, 2026.

Ruggles, Steven, Sarah Flood, Matthew Sobek, Daniel Backman, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, Renae Rodgers, Jonathan Schroeder, and Kari C.W. Williams. IPUMS USA: Version 16.0 . Minneapolis, MN: IPUMS, 2025. https://doi.org/10.18128/D010.V16.0

Sanes, Milla, and John Schmitt. 2014. Regulation of Public Sector Collective Bargaining in the States. Center for Economic and Policy Research, March 2014.

S.B. 378, 2026 S., Reg. Sess. (Va. 2026).

S.B. 917, 2025 S., Reg. Sess. (Va. 2025).

Sharma, Rahul Chowdry. 2022. “Where Can Public Sector Employees Collectively Bargain in Virginia? Increasingly, the Commonwealth’s Most Populous Cities and Counties.” Virginia Mercury, July 28, 2022.

Sherer, Jennifer, and Elise Gould. 2024. “Data Show Anti-Union ‘Right-to-Work’ Laws Damage State Economies: As Michigan’s Repeal Takes Effect, New Hampshire Should Continue to Reject ‘Right-to-Work’ Legislation.” Working Economics Blog (Economic Policy Institute), February 13, 2024.

Shimabukuro, Jon O., and Julie M. Whittaker. 2014. Federal Labor Relations Statutes: An Overview. Congressional Research Service (CRS) R42526. Updated September 5, 2014.

Steiner, Elizabeth D., Ashley Woo, and Sy Doan. 2024. Larger Pay Increases and Adequate Benefits Could Improve Teacher Retention: Findings from the 2024 State of the American Teacher Survey. RAND Institute, November 20, 2024.

The Commonwealth Institute. 2022. History of Labor in Virginia: An Interactive Timeline and Map. Accessed January 12, 2026.

Valletta, Robert G., and Richard B. Freeman. 1988. “The NBER Public Sector Collective Bargaining Law Data Set.” Appendix B in When Public Employees Unionize, edited by Richard B. Freeman and Casey Ichniowski. NBER and Univ. of Chicago Press.

Virginia Department of Human Resource Management (VDHRM). 2025. Biennial Compensation Report. November 2025.

Walter, Karla. 2026. Virginia Workers’ Biggest Win in Decades Could Come in 2026. Center for American Progress, January 12, 2026.

Walter, Karla, and David Madland. 2025. Union Trigger Laws 101 How States Can Protect Workers if Federal Labor Law Falls. Center for American Progress, November 19, 2025.

Watts, Parker. 2021. “Labor Day Reflections on Race, Power, and Organized Labor in Virginia.” The Commonwealth Institute, September 1, 2021.

Wething, Hilary. 2024a. “Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part I.”“Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part I.” Working Economics Blog (Economic Policy Institute), October 9, 2024.

Wething, Hilary. 2024b. “Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part II.” Working Economics Blog (Economic Policy Institute), October 16, 2024.

Wilkinson, Nolan. 2025. “Proposal to Allow Frederick City Employees to Unionize Tabled.” The Frederick News-Post, September 25, 2025.

Three key takeaways:

• More than 8.3 million workers will get a raise starting January 1 as 19 states raise their minimum wages.
• For the first time, there will be more workers in states with a $15 or greater minimum wage than in states with the federal minimum of $7.25.
• Minimum wage increases are critical for improving affordability. State and federal policymakers should ensure wage floors meet the needs of all workers.

Nineteen states will increase their minimum wages on January 1, boosting earnings for more than 8.3 million workers by a total of $5 billion. In addition, 47 cities and counties will raise their minimum wages, adding to the number of workers likely to get larger paychecks because of lawmakers—or in some cases, voters—taking action to lift state and local wage floors.

Figure A

State minimum wage increases this January will boost wages for a broad range of working people and help shape a more equitable economy. Our estimates account for all affected workers: Both those directly receiving an increased minimum wage and those indirectly affected as employers adjust their wage ladders to the new wage floor. According to our analysis:

• Women make up the majority (58.1%) of affected workers.
• Black and Hispanic workers will disproportionately benefit. 10.7% of affected workers are Black, despite being 8.7% of the workforce in these states. Meanwhile, 38.3% of affected workers are Hispanic, despite being 19.8% of the overall workforce in these states.
• The vast majority (87.4%) of affected workers are adults, not teenagers.
• A quarter (25.3%) of affected workers are parents. 4.8 million children live in households with at least one worker receiving a pay increase.
• Nearly half (49.4%) are full-time workers and 41.4% have at least some college education.
• More than one in five (21.0%) affected workers have household incomes below the poverty line and 48.8% are within 200% of the poverty line.

Boosting the minimum wage is good affordability policy

Minimum wage increases are an essential tool for putting money in workers’ pockets. As concerns about rising prices and affordability dominate the news cycle, it is critical to recognize that “affordability” is a function of both prices and wages. And while prices in most cases are unlikely to decline significantly, policymakers can make decisions that boost wages for workers. In Hawaii, the minimum wage increase from $14.00 to $16.00 an hour will raise annual wages by $1,346 for a full-time worker (see Figure A). Missouri’s increase from $13.75 to $15.00 an hour will boost annual wages by $920 for a full-time worker.

Price increases are squeezing workers today because lawmakers for decades have made policy decisions that suppress workers’ pay, including allowing the federal minimum wage to stagnate. The federal minimum wage has not increased from $7.25 an hour in more than 15 years, during which time its value has eroded by more than 30%. In 2025, the federal minimum wage is below the poverty line, but it is still the law of the land in 20 states that have more than 60.2 million total workers (see Figure B).

Policymakers can protect the value of the minimum wage over time as prices increase. Many of the states with small wage increases in January, like Minnesota, are making annual inflation adjustments to their wage floor. Not only do these adjustments automatically protect workers’ purchasing power over time, they also provide predictability to employers, allowing them to anticipate and plan modest adjustments to worker pay each year. Despite the prudence of inflation adjustments, conservative policymakers in some states have still opposed it. In Missouri, Republican lawmakers stripped a successful minimum wage ballot measure of its indexing provision, leaving low-wage workers vulnerable to a weakening wage standard over time.

In 2026, more workers will live in a state with at least a $15 minimum wage than a $7.25 minimum wage

In the past decade, dozens of states have passed significant minimum wage increases to counteract federal inaction. In 2026, minimum wages in Arizona, Colorado, Hawaii, Maine, Missouri, and Nebraska will reach or exceed $15 an hour for the first time, meaning that a total of 17 states and Washington D.C. will reach that threshold. For the first time, there will be more workers living in a state with a $15 or higher wage floor than workers living in states still stuck at $7.25 (see Figure B). These increases have taken place in urban and rural states as well as politically “blue” and “red” ones. This milestone reflects the progress of the minimum wage movement over the past decade but also underscores the gap between how workers in some states are paid relative to their peers doing the exact same jobs elsewhere in the country. There are still 14 million workers earning less than $15 an hour who have been left behind because Republican lawmakers at both the federal and state level have denied them a raise.

Figure B

More states could pass a $15 minimum wage soon, despite interference from conservative policymakers. In 2020, Virginia passed legislation to reach a $15 minimum wage by 2026, but the law required reauthorization by the state legislature by July 2024. Republican Governor Glenn Youngkin repeatedly vetoed those planned increases. Governor-elect Abigail Spanberger has promised to support a minimum wage increase. In Oklahoma, Republican Governor Kevin Stitt delayed a vote on a 2024 $15 minimum wage ballot measure until June 2026.

These delays not only push back potential wage gains for workers, they also chip away at the value of those increases because of inflation. Because the Oklahoma policy is a ballot measure, the language cannot be adjusted to account for the lost time since 2024. However, policymakers in Virginia could enact a new minimum wage target that accounts for the higher-than-expected inflation since the pandemic. This would likely mean a minimum wage of $16.64 in 2026 or $17.02 in 2027.1

Rising prices mean higher minimum wage targets are necessary throughout the country

Rising costs of living throughout the country will require policymakers to target minimum wages at higher levels than have been typical in recent years. When striking fast food workers in New York City sparked the Fight for $15 movement in 2012, the buying power of a $15 minimum wage was substantially higher than it is today. In 2025, a $15 minimum wage does not achieve economic security for working people in most of the country. This is particularly true in the highest cost-of-living cities. Table 1 compares the 2026 minimum wage and living wage for select metro areas across the country. The living wage standards are from EPI’s Family Budget Calculator (FBC), a measure of a modest yet adequate standard of living for families in each U.S. metro area and county. The living wage standards are for a single adult, assuming 81% of their total income is from wages.

The minimum wage does not exceed the FBC’s living wage in any county, but minimum wage increases make a significant difference for workers. Oklahoma City has the lowest living costs listed in the table, but the state minimum wage of $7.25 is only 42% of the living wage ($17.31). By comparison, Seattle will have a $21.30 minimum wage in 2026, almost 80% of the living wage in the metro despite its higher cost of living. Even outside of especially high-cost localities, strong minimum wage policies have set wage floors much closer to the living wage needs for workers. For instance, Missouri’s $15 minimum wage is 81% of the living wage in Kansas City, Mo. ($18.51).

Table 1

Workers are continuing to demand higher wages so that they can afford to live in the communities where they work. Hospitality workers in Los Angeles are poised to gain a $30 minimum wage, although the city council could water down the increases. The New York City mayoral campaign and new efforts in D.C. are also elevating ambitious minimum wage policies. As shown in Table 4, dozens of localities in Arizona, California, Colorado, and Washington are already implementing minimum wage targets above $17, $18, and $19 an hour. Seven localities in Washington will have minimum wages above $20 an hour.

Research has consistently shown that increasing the minimum wage remains a powerful tool for making the economy more equitable without causing job losses. The affordability crisis underlines how essential it is for federal, state, and local policymakers to take action so that workers are not left further behind, but lawmakers have taken relatively little new action on minimum wage policy in recent years. Of the 19 state increases this January, only two (Rhode Island and Michigan) are the result of policies passed in 2025. In addition, while Colorado, D.C., and Michigan all boosted their minimum wage this year, they also reinforced carve-outs for tipped workers. Even as millions of workers get raises this January, state and federal policymakers must do more to ensure their wage floors meet the needs of all workers.

Table 2

Table 3

Table 4

Note

1. According to CBO CPI-U projections in January 2020, $15.00 in 2026 was equivalent to $13.00 in 2020. If we adjust $13.00 an hour to account for actual CPI-U increases and CBO projections for future growth (September 2025 projections), the equivalent value is $16.64 in 2026 or $17.02 in 2027. 

Specifically, we have seen a long-term decline in male-dominated jobs—often jobs with higher pay thanks to higher unionization rates—alongside declines in men’s labor force participation (with the exception of the past decade). Meanwhile, female-dominated occupations are growing faster, but unfortunately many of these are currently lower-paying professions. To strengthen labor force participation, job quality and pay need to improve.

Employment losses were largest in male-dominated industries between 1976 and 2024

In a newly released report highlighting trends in men’s and women’s labor force participation, we describe how structural factors affecting industries and occupations are key to explaining historical trends in labor force growth. For men, large declines in military and manufacturing jobs went hand-in-hand with the decline in men’s labor force participation over much of the last 50 years. These were disproportionately a source of good jobs—where wage levels were high, non-wage benefits were common, and social prestige was high. Agriculture, mining, forestry, and fisheries, and wholesale trade also all experienced significant losses in employment between 1976 and 2024.

In frictionless labor markets, men should have responded to the declines in male-dominated sectors simply by moving into new jobs created outside of these sectors. But since alternative sources of employment often offered less attractive jobs for men (particularly non-college men), many men instead dropped out of the labor force entirely.

Jobs of the future are in health care and caregiving, historically female-dominated professions

By contrast, women are more likely to be employed in occupations that have grown in recent decades and are expected to keeping growing in the near future. Over the next decade, the Bureau of Labor Statistics projects that the fastest growing occupations will be in health care support, health care practitioners, computer and mathematical sciences, and community/social services. Women dominate the workforce in three of these four growing occupations: At least 70% of the workers in health care support and community and social services occupation groups are women.

Unfortunately, jobs in which women are overrepresented tend to provide lower pay and fewer benefits than male-dominated occupations, and wages tend to fall in occupations as the share of women increases. Health care support occupations, for example, only pay about three-fourths of the median wage overall ($37,000 versus $49,000). This wage is just barely above the poverty line for a family of four.

How occupational segregation affects men’s and women’s labor market choices 

It’s possible to draw the conclusion from the information above that men will continue to lose out on labor market opportunities and women will continue to gain opportunities, albeit at low pay. But jobs in growing fields such as health care and community and social services need not be dominated by women, nor must they be poor-quality jobs. Men and women make occupational choices based on a variety of individual decisions, as well as larger social and cultural influences. These occupational choices are shaped by a lifetime of experiences, educational expectations, hiring practices, and norms and beliefs about family roles and the division of household labor, which often track women into caregiving roles and men into technology and production roles. While this “occupational segregation” can have a big impact on labor market choices, policy that improves the quality of female-dominated jobs could improve labor market outcomes for both women and men.

Improving jobs of the future can support labor force participation for both men and women

In order for these jobs of the future to be attractive for men and women alike, health care support and community and social service jobs need to pay better wages, provide better benefits, and improve working conditions. The following policy goals would all contribute to stronger labor force participation:

• Tight labor markets would not only draw more would-be workers into the labor force but also give those workers more leverage to secure better pay.
• Stronger labor standards, such as a higher minimum wage and overtime protections, would improve those jobs and make them more appealing to a broader range of workers.
• Increased unionization would also improve pay in those jobs. On average, workers in unionized jobs are paid 8% more than workers in non-union jobs. There is no reason currently low-paid occupations, like health care support jobs, couldn’t enjoy the benefits of unionization. The share of unionized workers in health care support jobs has recently increased, and their wages are higher than those of their non-union counterparts. 

The post-pandemic labor market has given us some evidence that higher pay will translate into improved labor force participation. Despite the structural headwinds to men’s labor force participation imposed by the changing industrial composition of the economy, male labor force participation rates rose significantly in the past decade (and especially in the post-2019 period) as wage growth improved significantly, particularly for non-college workers.

There is no reason that jobs of the future should have bad job quality and low pay. Given that we know which jobs the U.S. economy will need in the next 10 years, policymakers should prioritize improving the quality of these jobs to ensure all workers will access them.

Key takeaways

• The last decade marks a shift in the prime-age labor force participation rate (LFPR). It moved away from a long-term decline toward rebounded participation in the wake of strong labor markets. Current prime-age LFPR is now back to its 2001 level, erasing much of those losses. Key conclusions from this: Full-employment labor markets are needed to keep LFPRs strong, and long-term structural determinants of LFPR growth cannot be accurately diagnosed during times of cyclical labor market weakness.
• Since 1979, key drivers of the decline in men’s labor force participation included the following:
  • extended periods of excess unemployment rates
  • the labor market scarring effect of mass incarceration
  • the decline of historical sources of employment for noncollege men like the manufacturing and military sectors
  • increased opioid usage
• During the strong labor market in the late 2010s and following the tremendous recovery from the pandemic recession, noncollege men and Black men have seen substantial increases in    labor force participation.
• Women, by contrast, experienced historical gains in labor force participation throughout the 1980s and 1990s but then their participation stalled out in the early 2000s —and began falling behind relative to peers in OECD countries. In the U.S., insufficient support for balancing paid work and family responsibilities has been a limiting factor in further increases in women’s labor force participation. However, increases in workplace flexibility, with the rise of hybrid or remote work following the pandemic, may have boosted labor force participation, particularly for women with caregiving responsibilities.

Policy recommendations for maintaining and improving gains in labor force participation:

• In addition to policies that prioritize tight labor markets, policies should target the following for adults:
  • reductions in opioid use
  • reductions in incarceration rates
  • improvements in policies that support parents and caregivers
  •  substantial improvements in the pay and working conditions of jobs of the future (like caregiving jobs) to attract and retain workers
• Investments in today’s children are crucial for boosting the labor force participation of future generations, such as safety net policies that promote long-term health and educational investments. The future labor market benefits of investing in children are so strong in the long run that they may even be fiscally self-financing.

Executive summary

Labor force participation is both a key input and a consequence of strong economic growth. While there are many reasons some do not participate in the formal labor market—school, family caregiving responsibilities, retirement, work-limiting disabilities—a strong labor market with high employer demand for workers is a necessity to give as many willing workers as possible a chance for employment.

In an aging population in which college attendance is far more common than it used to be, demographic trends have a strong influence on the overall labor force participation rate. Few people think that it’s a problem that many older Americans choose to enjoy retirement or that many younger adults are enrolled in school rather than searching for work. What is, however, a potential problem is many prime-age workers—those between 25 and 54—are dropping out of the job search and work. To assess the extent of this problem, this report focuses primarily on prime-age labor force participation, the share of the population between 25 and 54 that is working or looking for work. This measure rose sharply from the mid-1970s to the mid-1990s. After that, it was flat for a period, then fell during the mid-2010s, most notably following the Great Recession. Over the last 10 years, participation has rebounded strongly and is now back to its 2001 level, erasing much of those post-2000 losses.

The rise in participation before 2000 was primarily driven by women as they increased their education, delayed family formation, and chose to participate in the paid labor market, driven in part by greater opportunities to access higher-paying previously male-dominated professions. The rise in participation over the last decade improved outcomes for both men and women, as strong employer demand led to workers entering or returning to the labor market. By 2024, women’s participation hit an all-time high, and men’s participation rate is back to its 2010 level.

Changes in labor force participation over the last nearly five decades varied by gender, but also across various demographic groups. While changes within demographic groups were the most important drivers of overall trends, there were notable differences between groups. For instance, those without a college degree—particularly men—experienced steeper declines in participation. And education upgrading (increasing the share of the population with a college degree) over the long term did little to offset that weakness. Loss of jobs in areas that traditionally were large-scale employers of noncollege men, such as manufacturing and the military, is undoubtedly related to reduced opportunity and participation in the labor force for those without a four-year college degree.

Black men, in particular, experienced notable declines in participation before the strong labor market over the last 10 years returned their participation to its 2000 level. The quadrupling of incarceration rates through the 1980s and 1990s disproportionately impacted Black men, making it harder for them to secure employment because of both the labor market scarring effects of incarceration as well as labor market discrimination.

Across peer countries in the OECD, prime-age labor force participation didn’t fall off to the same extent for men as it did in the U.S. and continued to rise for women over time. Insufficient support for balancing paid work and family responsibilities in the U.S. has been a limiting factor, particularly for women’s labor force participation. A body of international evidence indicates that larger investments in those areas—such as child care and paid leave—have the potential to help boost participation. Recent increases in work flexibility following the pandemic, such as hybrid or remote work, may have aided the entry or reentry of workers with caregiving responsibilities.

Policy choices–both of commission and omission—can affect the future growth of labor force participation, but outside of immigration, the effects will be comparatively modest relative to historical swings in labor force participation. Strengthened public care can increase labor supply, particularly for women. Poor health, pain, and opioid use have been linked to lower participation, so improving population health and the provision of health care could increase labor force participation. Further, investments in today’s children, through programs that provide health care, early education, and food security, can also pay dividends in terms of future labor force participation.

A strong economy and high-quality jobs are strongly related to labor force participation. When the labor market is tight, workers come back in search of better opportunities. Even with the pandemic job losses, the tight labor market over the last decade has all but erased the declines in the 2000s when excess unemployment and slow job growth kept would-be workers on the sidelines.

Introduction

The rate at which people participate in the U.S. labor force—which includes people who are working, as well as those who are unemployed but actively looking for work—has enormous implications for the economy and can serve as a barometer for its overall health.

There is no ideal labor force participation rate, and a society in which 100% of the population is in the labor force is not only unrealistic, but also undesirable. For example, high labor force participation could reflect a strong economy, or it could reflect a lack of access to social safety nets that force the very old and people with work-limiting disabilities into the workforce in order to survive. Falling labor force participation rates could be the result of a recession or other negative event like a global pandemic or could be caused by an aging population with many retired people or increased educational opportunities that delay entry into the labor force among younger cohorts.

Because there is no obvious ideal labor force participation rate, policymakers should think less about particular targets to hit for this rate and should instead aim at removing barriers that stand in the way of willing workers and their ability to search for and secure a decent job. While there are good reasons to not participate, such as gaining education or skills, harmful barriers could include macroeconomic slack in labor markets or more structural barriers like discrimination or insufficient societal investment in workers’ health and skills or insufficient support for balancing paid work and family responsibilities.

Labor force participation that is high due to few barriers between willing workers and the ability to find decent jobs is a key ingredient to a healthy, stable economy. This relationship moves in both directions: A healthy economy is one that sees few barriers to willing workers finding jobs, and growing labor force participation is also a key component of economic growth. When the number of people in the labor force increases, it boosts production and leads to higher consumption.

The overall labor force participation rate in the United States is lower now than at its peak in 2000, largely because the population is aging and members of the baby-boom generation have retired. Participation among younger people has declined over time, raising concerns among some economists and policymakers. But the direction of these trends has not been consistently negative, and there is evidence from the last decade that earlier patterns were less durable than predicted.

This report provides an overview of prime-age labor force participation over the last 45 years, summarizes prior research on possible drivers behind the changes over time, and highlights when and how patterns have shifted over the last decade, concluding with policy recommendations that the data suggest could be most helpful to support a continued upward trajectory.

Overall trends in labor force participation

The prime-age labor force participation rate is the share of the civilian noninstitutional population between ages 25 and 54 that is working or looking for work. We focus on this measure to remove those who may be more likely to be in school or retired. As educational attainment has increased over time, a larger share of the population may be out of the labor force for longer (primarily affecting the population younger than 25). At the same time, the population has aged, and a growing share of the population has moved into retirement. Removing those under 25 and over 54 from our analysis removes those mostly demographic changes in labor force participation. Unless otherwise stated, all analysis in this report will include only the U.S. population 25 to 54 years old and will, therefore, be referred to as the labor force or the labor force participation rate (LFPR).

In this report, our primary data set is the basic monthly Current Population Survey. For most analysis, we have a consistent series from 1976 to 2024 and use that entire period, when possible, to display trends. For consistency when decomposing changes over periods of time, we start with 1979 because it is the first business cycle peak in our data, and we don’t want to capture any cyclical trends that may have impacted the data from 1976. Using endpoints for analyses that are at different points of the business cycles can cloud conclusions on structural changes in the labor market. This is what happened with much of the research on labor force participation rates from the mid-2010s when the economy was still suffering employment losses in the aftermath of the Great Recession.

Prime-age labor force participation increased year over year throughout most of the post-World War II era for which we have data. Between 1976 and 2024, the prime-age labor force participation rate rose 8.8 percentage points from 74.8% to 83.6%. As Figure A demonstrates, there was a sharp rise in labor force participation from 1976 to the mid-1990s when it stabilized somewhat, then fell until the mid-2010s. With the notable exception of the pandemic recession, labor force participation has been on the rise for the last 10 years.

Figure A

Labor force participation rates by gender

The overall trends in prime-age labor force participation are valuable in understanding the overall story of the labor market, but they mask some stark differences between participation rates for men and women. Figure B shows that men’s labor force participation is consistently higher than women’s throughout the entire period. What’s most striking is the rise in participation overall through the 1990s was entirely driven by women. There are a number of cultural and socioeconomic factors behind that rise in women’s participation as women increased their college attendance and graduation rates while narrowing the gender gap in college majors, delayed marriage and childbirth, and acquired more market-relevant skills. Combined, these shifts led to greater opportunities for women to enter previously highly male-dominated occupations and earn higher wages (Goldin 2006). Both men and women experienced declines in participation from around 2000 to the mid-2010s, and then both groups experienced a rise since then, though stronger for women.

Figure B

Labor force participation rates move with overall labor market strength

Labor force participation rates tend to decline under weak economic conditions, like recessionary periods. But when the 2008 recession began, prime-age participation had still not fully recovered losses from the early 2000s, and LFP continued to fall for both men and women after the recession ended and the economy started expanding again. The majority of the decline in prime-age labor force participation occurred in the years after the 2008 recession, when prime-age LFP fell by 2.2 percentage points over the course of six years.

A significant body of research was released in the mid-2010s that highlighted the long-term fall in labor force participation, particularly among men, but the last 10 years have shown us a notable reversal in trend as participation for both men and women have been on the rise. While prime-age women are now experiencing their highest labor force participation rates on record, men’s have stopped their downward movement and risen 1.1 percentage points since their low point in 2014 (except in the pandemic recession).

The strength of the labor market over the last 10 years has meant more and better opportunities for potential labor market entrants. There have been two distinct periods over the last 45 years in which a growing economy has led to more broadly shared prosperity: the late 1990s and the last 10 years. Table 1 maps changes in labor force participation in those particular time periods against unemployment rates. Then, we summarize those two periods of time into two categories. The stronger labor market is defined by 1995–2000 and 2014–2024, while the weaker labor market is defined by the remaining 30 years since 1979.

In the good times, the unemployment rate averaged 4.7%, and labor force participation increased 0.3 and 0.1 percentage points per year, on average for women and men, respectively. In the bad times, women’s labor force participation continued to rise, but was largely driven by the structural increases in opportunities in education and reduced barriers to entry for higher-paying professions that characterized the 1979–1995 period. Men’s participation fell 0.2 percentage points in these times of weaker opportunities and lower wage growth when the overall unemployment rate averaged 6.7% (Gould 2020). Since 2000, periods of high unemployment have been associated with declines in both male and female labor force participation.

Table 1

Periods of higher unemployment for much of the last 45 years appear to be related to lower participation rates, particularly among men. But, as the women’s labor force participation rate stabilized in 2000, the trends have been similar for both men and women. The weaker labor market between 2000 and 2014 meant losses in participation, as workers saw fewer opportunities for themselves in the labor market. Though delayed, the labor market expansion in the lead-up to the business cycle peak in 2019, and in the strong bounceback of the last four years, has coincided with greater labor market participation for new or returning workers.

Mechanically, when workers see fewer opportunities and leave the labor force, the unemployment rate will fall as people who may have been classified as unemployed are now out of the labor force and, therefore, not counted. To the extent this is happening, even the higher unemployment rates in the bad times may be overstating labor market strength or undercounting weakness.

Since men’s and women’s labor force participation rates differ greatly in terms of their absolute levels across the entire period in question, we will conduct separate analyses for women and men. We caution readers to note the change in scale between figures for women and men when comparing trends. Women’s low participation in the 1970s requires a wider range; when men’s are narrowed to the range of interest, it can appear to amplify changes. While there were large losses over the entire period for men, they may appear larger than they are when compared with women’s wider labor force experiences.

Labor force participation rose for all racial/ethnic groups among women, while white and Black men experienced the largest declines

Figure C illustrates prime-age labor force participation rates for women (on the left) and men (on the right) for four groups: Hispanic of any race, white non-Hispanic (white), Black non-Hispanic (Black), and other (non-Hispanic). Other (non-Hispanic) is mostly Asian and Pacific Islander women and men; however, a series for this group doesn’t date as far back as 1976. Among women, Hispanic women have the lowest participation rates, while white and Black women have the highest. White women experienced the sharpest rise in participation through the 1970s, 1980s, and 1990s, and all groups experienced a lack of progress or a softening in participation in the early 2000s. Except for the dip in the pandemic recession, all groups experienced a resurgence in participation over much of the last decade.

Figure C

Over the entire period, Black men had the lowest labor force participation rates, and their declines were the sharpest for much of the last 45 years, never recovering fully in each recovery until the most recent period. With the exception of losses in the pandemic recession, Black men experienced a significant increase in participation over the last decade. Now, their labor force participation rate is the highest it has been in nearly 25 years. White men also experienced declines until the mid-2010s, but their participation rate stabilized and remains just shy of their pre-pandemic levels. Hispanic men experienced milder declines over the entire period and an uptick since the pandemic recession.

Though we do not show a figure for labor force participation rates by nativity (and the data only go back to 1994), it’s worth noting that among women, the participation rate of noncitizens is much lower than that of native or naturalized women (See Appendix Table 1). Among men, the largest fall in participation occurred among the native-born though 2014 but then rose over much of the last 10 years, except during the deep pandemic recession. Non-native men, either naturalized or noncitizens, did not experience large declines in participation, but their presence in the U.S. is often tied to the availability of work so their denominator—the population of each of these groups—also ebbs and flows with the strength of the labor market.

Over the last nearly five decades, the prime-age population has shifted from over 80% to about 55% white non-Hispanic, a drop of about 28 percentage points (EPI 2025a). While the Black share of the prime-age population rose about 4 percentage points, the largest gains were among the Hispanic share, increasing about 16 percentage points between 1979 and 2024 (EPI 2025a).

Given differences in labor force levels by race and ethnicity and the changing composition of the population by race and ethnicity over time, it is useful to decompose the overall change in the labor force into its component parts: the change in population share (or the between effect) and the change in labor force participation within groups (the within effect). Figure D shows these two effects, on the left for women and on the right for men.

Figure D

Compared with the changes due to the changing composition of the workforce, the changes within groups loom much larger. For women, the changing composition pulls down participation in part because Hispanic women were a growing share of the population with lower participation rates, compared with the falling share and higher participation rates of white non-Hispanic women. The rise is due to within-group increases in participation over the entire period.

Among men, the changing composition of the workforce played a small role, though likely driven by a falling population share of white men with higher participation rates in general. The drop in participation rates within each race/ethnic group played a much larger role over the 45-year period.

Labor force participation rate fell sharply for men with less than a four-year college degree, while participation for women with a college degree is at its highest ever

Labor force participation rates for different groups by educational attainment vary but follow the same general pattern for men and women, respectively. Both men and women with lower levels of educational attainment, shown in Figure E as noncollege—less than a four-year bachelor’s degree—exhibit lower levels of labor force participation throughout the last 45 years. For women, the noncollege participation tracked college participation, though their rates notably continued rising into 2000, while college participation peaked in 1997 (before the current period). Then, noncollege women’s participation dropped off in the 2000s and rose only mildly over the last 10 years. After softening for several years, labor force participation for women with a college degree is now at an all-time high.

Figure E

The labor force participation rate for men with and without college degrees has declined over time, but unevenly. Men without a four-year college degree experienced large declines between 1979 and 2014, a fall of 8.2 percentage points. They experienced some gains in the expansion of the late 2010s but were harmed more in the pandemic recession. While their participation rate is now back to their 2019 level, the increase hasn’t put a huge dent in the losses they suffered in the 35 years following 1979.

The reduction in labor force participation for noncollege men over time has been considerably greater than for men with a four-year degree. Technology has reduced employment for some types of workers, especially in manufacturing and jobs made up of routine tasks, while boosting employment for other kinds of work, and there is evidence that middle-skilled or middle-wage occupations have declined and have been replaced with a combination of low- and high-skilled jobs (CEA 2016).1

The decline in jobs that are available to workers with lower levels of formal education—or perhaps more accurately, the decline in the types of jobs these men have traditionally had access to, such as those in manufacturing—may make men more likely to leave the labor force. The decline in routine manual-labor jobs—skilled and semi-skilled jobs in production, maintenance, and material moving occupations, which are concentrated in manufacturing but are common in many other industries as well—has been significant and was accelerated by the 2008 recession.

From 2000 to 2017, routine manual-labor jobs as a share of all nonfarm employment fell by nearly 5 percentage points (Valletta and Barlow 2018). There is a correlation between routine manual-labor jobs and prime-age labor force participation, and in states where the drop was larger, there tended to be corresponding larger declines in participation. Controlling for other state-level economic conditions does not alter the relationship, indicating that the share of routine manual-labor jobs is not a proxy for other broad changes such as changes to the unemployment rate. The reduction in the routine manual employment share from 2000 to 2017 is estimated to have reduced the prime-age participation rate by approximately 1.3 percentage points, slightly more than half of the actual 2.3 percentage point decline in prime-age LFP (Valletta and Barlow 2018).

More specifically, the share of men’s employment in the manufacturing sector has fallen to less than half of what it was in 1979. As shown in Appendix Table 3, men’s share of employment in combined durable and nondurable goods manufacturing was 28.5% in 1979, but by 2024, these shares were reduced to 12.8%. To be clear, women’s participation in manufacturing jobs also declined substantially over the period, dropping from 17.9% to 6.3% of women’s employment; however, given that these jobs made up a smaller share of women’s overall employment composition, the loss was felt less by women than by men.

Additionally, the debate over falling male labor force participation often does not mention an important and heavily male economic sector that has shrunk enormously in terms of the opportunities it provided for those who might otherwise have lower-than-average participation rates: the military.

Figure F shows the overall decline in men’s labor force participation alongside the decline in total military employment scaled to the male noninstitutional prime-age population. To be clear, these are not true shares because our measure of the prime-age population is limited to the noninstitutional population, which excludes those in military service. However, the decline in military employment has meant that millions of noncollege men who might have lower-than-average opportunities in the civilian economy can no longer find work in the military. Throughout the mid-1960s through the 1990s, the share of prime-age men in the military dramatically decreased, from a high of 14% in 1967 leveling out at just under 4% of the prime-age male population in the 2000s.

Figure F

Educational upgrading played a small role compared with within-group changes in labor force participation

As with the composition of the population by race and ethnicity, there were large shifts in the educational attainment of men and particularly women between 1979 and 2024. As shown in Appendix Table 2, the share of women with a college degree rose 30.3 percentage points, while the share of men with a college degree rose 14.3 percentage points. Even though women started out with a smaller share of college graduates, today they are more likely to have a four-year degree relative to men. Given that overall labor force participation is far higher for college degree holders, all else equal, we would expect participation rates to have climbed over the 45-year period. While not the same as the labor force participation rate, prime-age women’s increased educational attainment is estimated to have contributed 2.7 percentage points to their employment rate between 2000 and 2023 (Arnon et al. 2023).

There is evidence that pursuing postsecondary education may be delaying labor force entry, at least for some populations. While most college students are younger than prime age, about one-third of students enrolled at Title IV institutions in the fall of 2023 were age 25 or older, and one-quarter were ages 25 to 39 (NCES 2024). Research comparing prime-age men between millennial and baby-boomer generational cohorts found that school attendance explains a roughly a third of millennial men under 30s’ lower labor force participation, but that this effect has virtually no impact by age 40 (Bengali, Duzhak, and Zhao 2023). And when millennial men are separated by education, labor force participation for those with a high school diploma or less is relatively flat from age 25 to 40, while it increases with age for those with a college degree or more, suggesting that additional educational attainment may play a role in delaying eventual entry into the labor market.

In Figure G, we examine the role that changing education composition played in the changes in labor force participation. As the shift in educational attainment was twice as large among women, it’s not surprising that it played a large role in lifting women’s participation rates overall. But the increases in participation within education groups were even more important since 1979. For men, the declines in participation within each group played an outsized role in explaining declines in labor force participation. As we saw in Figure E, these losses were more acute among noncollege men.

Figure G

Labor force participation among married women rose quickly, as unmarried women saw little change

Participation rates for men and women by marital status display a strikingly different pattern, as shown in Figure H. Married men are more likely to work than unmarried men, while unmarried women are more likely to work than married women. Unmarried women always exhibit relatively high levels of labor force participation, and that has changed little over much of the last few decades, except for mild rising and falling in business cycles. Married women, however, experienced a sharp rise in participation from just over a half (52.3%) to three-quarters (75.8%), currently at their highest level of participation on record.

On average, married men are about 9 percentage points more likely to participate in the labor force than unmarried men. That gap has been relatively consistent over the last 45 years, though unmarried men are more subject to swings in the labor market.

Figure H

Over the last nearly five decades, marriage rates have declined for both men and women, falling by about a quarter overall (see Appendix Table 2). All else equal, the decrease in marriage rates for women would pull up overall labor force participation for women. Figure I illustrates this decomposition. The shift toward unmarried status pulled up women’s participation but depressed men’s, as unmarried women are more likely to work than unmarried men, but unmarried men are less likely to work than married men. Rising participation, especially among married women, was a major factor in the rise of participation among women. Men’s falling labor force participation over the 1979–2024 period is explained by both falling participation among married and unmarried men and falling married rates.

Figure I

Labor force participation among women with young children rose, while men’s labor force remained tied to aggregate labor market conditions

While a small percentage of prime-age workers overall report they are not in the labor force due to family and care responsibilities, family structure and caregiving have strikingly disparate impacts on men’s and women’s participation. Care for children is a significant driver of this difference, as mothers are more likely than fathers to be primary caregivers. Mothers have lower participation rates than similarly aged women without children, even after controlling for demographics and education (Kahn, García-Manglano, and Bianchi 2014).

Participation rates for women with young children tend to lag participation rates for women overall and have not grown at the same rate (see Appendix Table 1). Women with children under age 3 have lower participation rates than women with children under 5, although the gap between these two groups has closed slightly since the early 2000s. Women experience a significant and sharp decline in labor force participation after having their first child. Compared with one year prior to having their first child, mothers are 18 percentage points less likely to be in the labor force in the quarter they give birth, and it takes an estimated two years after the birth of their last child for LFP to recover to roughly the same rate as pre-motherhood (Sandler and Szembrot 2019).

Some of this is likely due to personal preferences and cultural norms around caregiving, but there is also evidence that suggests high prices for child care contribute significantly to lower maternal labor force participation. Previous studies have found a positive relationship between access to child care and the mother’s LFP, although the size of the effect varies across studies (Morrissey 2017). More recent data suggest a close to a 1-to-1 relationship between the price of care and employment; as child care prices increase by 1 percentage point, a mother’s probability of employment declines by 0.9 percentage points, and the relationship is even stronger in states with traditional gender norms (Collins et al. 2021).

Factors thought to have influenced prime-age labor force participation between 2000 and the mid-2010s

The majority of the decline in prime-age labor force participation occurred in the years immediately after the 2008 recession, when the participation rate fell by 2.2 percentage points over the course of six years. This prompted a wave of research and subsequent news coverage aimed at understanding the drivers behind this shift. Labor force participation rates tend to decline under weak economic conditions like recessionary periods. But when the recession began, the prime-age LFP had still not fully recovered losses from the early 2000s, and it continued to fall for several years for both men and women after the recession ended and the economy started expanding again.

The longer-term trends indicated that there were factors exerting downward pressure on prime-age participation beyond the business cycle. Estimates on how much of the change in LFP was caused by cyclical factors vary, ranging from one-sixth to about two-thirds (Shierholz 2012; CEA 2016). But while point estimates varied, there was widespread agreement that structural factors contributed significantly to falling labor force participation after 2007.

Many of the factors identified, such as declining opportunities for men without four-year college degrees and stalled parental and child care policies, have already been discussed. A wide range of other potential causes has also been hypothesized to be behind the reduction in prime-age participation, with an overall focus on the experience of men, given their steeper declines.

Poor health, pain, and the opioid epidemic

The number of prime-age adults who report they are not in the labor force due to poor health or disability has increased over time and is the primary reason for nonparticipation reported by men (Tüzeman and Tran 2019). Prime-age women overall report their health as better and their well-being as higher compared with men, and women’s self-reported health does not vary significantly by labor force status. In contrast, prime-age men who are not in the labor force report worse health indicators compared with working men (Graham and Pinto 2021).

Racial and ethnic disparities in health are well documented (NASEM 2017), but in contrast to decades of findings that people of color experience disproportionate health challenges, white men, among prime-age men not in the labor force from 2010 to 2016, reported worse health, lower well-being, and more pain than men of other racial groups. Among these white men, overall low scores were driven by those with lower educational attainment and those at the older end of the prime-age range, especially those ages 45 to 54. Because their health was so much worse than similar men who are working, this suggests that poor health may be the cause of their nonparticipation rather than its effect (Graham and Pinto 2021).

The opioid epidemic has also been linked to declining labor force participation, although it is difficult to assign causation or separate cause from effect due to a lack of reliable data. Opioid prescriptions increased significantly beginning in the late 1990s and peaked in 2012 (Chai et al. 2018) with 17.8 billion opioid analgesic pills dispensed that year alone (Woods et al. 2021). While the overall decline in prime-age labor force participation predates the opioid epidemic, there is evidence opioid use may have contributed to the trend.

A number of studies show that increases in the use of opioids are associated with negative labor market outcomes, including lower labor force participation, although effect sizes vary (Maclean et al. 2020). One widely cited report found that labor force participation fell more in counties with higher opioid prescription rates. After controlling for race, marital status, age, education, manufacturing jobs, and census region, increased opioid prescriptions are estimated to account for as much as 0.6 percentage points of the decline in prime-age male LFP and 0.8 percentage points of the decline for women—or roughly 20% of the total decline from 1999 to 2015 (Krueger 2017). Subsequent research found an opposite pattern by gender, estimating that a 10% increase in the local opioid prescription rate is associated with a 0.53 percentage point decline in prime-age participation for men and a 0.10 percentage point decline for prime-age women (Aliprantis, Fee, and Schweitzer 2023).

Social Security Disability Insurance

Along with increased self-reported poor health, pain, and opioid use, growing incidence of disability benefits has also been proposed as a cause of falling prime-age labor force participation in the 2000s and 2010s. Social Security Disability Insurance (SSDI) has been an important component of the social safety net since benefits began in 1957. Reforms were made to the disability screening process in the 1980s, and researchers have posited that, coupled with an increase in the real value of benefits, this led to the subsequent large increase in enrollment, with the number of workers receiving SSDI benefits tripling from 1980 to 2013. Some went so far as to suggest that many of the applicants may be making fraudulent claims (Autor and Duggan 2006). Although SSDI benefits replace only a fraction of a disabled worker’s prior earnings and disabled beneficiaries are more than twice as likely to live below the poverty line (CBPP 2025), some researchers hypothesized that SSDI benefits would reduce the incentive for people with some remaining work capacity to stay in the labor force.

Estimates on how much increased SSDI receipt has contributed to declining labor force participation for prime-age men vary but generally account for very little of the total change (CEA 2016). SSDI is suggested to have a particularly chilling effect on LFP for men with lower levels of education since benefit receipt has grown more for prime-age adults without a college degree, a group that has also seen larger declines in participation (Burk and Montes 2018). But research comparing data on SSDI and participation rates between 1975–1984 and 2008–2017 found that increases in disability benefits explain almost none of the decline in LFP for men with less than a high school education and only very small shares of the drop in LFP for prime-age men with only a high school diploma—0.01 percentage points of the decline for men ages 25–34 and 35–44, and 0.3 percentage points for those ages 45–54 (Binder and Bound 2019).

Incarceration rates

The number of people incarcerated in the U.S. quadrupled from 1978 to 1998 (BJS n.d.), and young Black men are disproportionately likely to be impacted. The rise in incarceration has cross-cutting effects on measured labor force participation. Because the surveys that estimate participation do not include the incarcerated population, if those currently incarcerated would be likely to have lower-than-average labor force participation rates in the noninstitutional labor market, a rise in incarceration can actually boost measured participation by removing this population from the denominator.

However, if a spell of incarceration causally reduces the probability of labor force participation because it makes an individual’s connections to the labor force more tenuous (being in an institution categorically means one is not in the labor force) or because skills and work experience can depreciate over time, then a growing stock of people in the market with a spell of incarceration in their history could lower overall participation through these scarring effects. Further, people with a history of incarceration are more likely to experience labor market discrimination (Burk and Montes 2018).

Spells of incarceration are estimated to have accounted for at least a quarter of the decline in LFP among all Black men between 1979 and 2000, and over one-half of the decline in participation rates among Black men ages 25–34 without a high school diploma (Holzer, Offner, and Sorenson 2005). More recently published research found that having received a criminal charge in their youth significantly increased the number of weeks prime-age men spent out of the labor force up to 26 years later. However, the data used in this research may be overestimating effects since it cannot account for reasons why someone is not in the labor force, including school attendance or because of later incarceration (Ellsworth 2017).

While not specifically measuring effects on prime-age labor force participation, additional research quantifies the way prior convictions—which may or may not result in incarceration—impact future employment. Having been convicted of a felony is estimated to have reduced the employment rate for all men in 2008 by 1.5 to 1.7 percentage points, and by 6.1 to 6.9 percentage points for men without a high school diploma (Schmitt and Warner 2011). Later research using state-level modeling estimated that every 1 percentage point increase in the share of the adult population with a felony conviction is associated with a 0.3 percentage point increase in the rate of nonemployment—including unemployment and being out of the labor force—for adults aged 18 to 54 (Larson et al. 2022).

Leisure activities

As previously discussed, prime age women are much more likely to leave the labor force to undertake family responsibilities, and men rarely report this as the reason for their nonparticipation. But regardless of the reason for their nonparticipation, there is also no evidence that men ultimately use the time they may have otherwise used for labor market activities on household work. Time-use data show that prime-age men not in the labor force spend twice as much time on leisure activities compared with other men, but only slightly more time on housework and caring for children (Krause and Sawhill 2017).

From 2000 to 2015, total market hours worked fell more for younger men ages 21 to 30 than for men ages 31 to 55, and younger men’s detachment from the labor market increased. Computer and video game technology advanced over this same period, which increased the appeal of this leisure time, and younger men significantly increased their time spent gaming. While recognizing other factors such as declining demand for younger men’s labor, researchers have hypothesized that video and computer games are a potential factor that contributed to the reduction in the labor supply of younger men, estimating that increased gaming technology was responsible for up 38% to 79% of the differential in work hours reduction between younger and middle-aged men (Aguiar et al. 2017).

Subsequent research confirms that time spent playing video games increased among men in the 2000s (Krueger 2017; Gray 2019). The increase in time spent gaming was concentrated among men under 30, and nonworking young adult men spent more time playing computer and video games than their working peers did. However, total electronics leisure time was flat over this period because time spent on gaming was generally offset by decreased time watching television or movies, not by reduced job search or labor market activity. And while young men who had recently exited the labor force spent more time gaming than employed men did, they spent less time compared with men who had been out of the labor force longer, undercutting the hypothesis that gaming was the reason for their exit (rather than a consequence of it). Overall, the data suggest that shifting cultural norms have made it more socially acceptable for slightly older and non-employed men to spend time playing video games, not that young men were leaving the labor force in order to devote more time to gaming (Gray 2019).

Real and relative wages

Real hourly wages (adjusted for inflation) for prime-age men without a college degree were meaningfully lower in 2015 compared with the early 1970s, while real wages for men with degrees increased over the same time—although the decline is not consistent throughout the entire period, and real wages for all educational groups did increase in the late 1990s (Binder and Bound 2019).

While an individual’s personal level of pay is important to labor market decisions, there is also evidence that men’s relationship to other men’s wages may have a meaningful impact on their beliefs about the financial returns on the time and effort invested in work and subsequent labor supply. Data from 1980 to 2019 show that noncollege prime-age men are more likely to leave the labor force when their earnings decline relative to other prime-age men. Increases in real earnings may not be enough to offset the effect of inequality; it’s the comparison to what other similar-ages men are paid that seems to matter most. The relationship with women’s wages is weaker, and white non-Hispanic men are driving the relationship, indicating that the LFP of historically privileged groups may be more sensitive to changes in relative economic standing. This decline in relative earnings for noncollege prime-age men is estimated to have contributed to 44% of the decline in labor force participation over this period (Wu 2022).

Additional recent research comparing wages in men’s birth states found a positive relationship between the wages paid to other men starting in an individual’s boyhood and their eventual labor force participation when they reach prime age, even after controlling for labor market conditions and demographic variation. The study found that a $0.33 increase in the average experienced aggregate lifetime hourly wage of men raised the probability of prime-age labor force participation by 10 percentage points. The effects persisted even when men moved states, and were stronger within racial categories with an effect twice as strong for Black men compared with white men. Racial decompositions found that white men were most influenced by the wages of other white men, while Black men were influenced by both Black and white wage trajectories (Levin and Vidart 2025). The data suggest that lifetime wage experiences, and what men see other similar men being paid throughout the life course, may shape beliefs about the returns on work, which in turn, influence labor force participation. This may help explain why men’s LFP continued to decline in the 1990s when real wages rose.

More recent changes to the economy 

The research outlined above was largely conducted using data from the years immediately after the 2008 recession, often with endpoints before prime-age labor force participation started recovering in the late 2010s. Labor force participation declined dramatically in 2020 but rebounded faster than predicted, continuing the upward trend in place before the pandemic. Between 2020 and 2024, the prime-age labor force grew about two-and-a-half times faster than the prime-age population (EPI 2025b). And as of 2024, prime-age men’s participation had regained its 2010 level, while women’s hit a historic high.

Research on the drivers of the rapid recovery and longer-term prime-age LFP increases is ongoing, but there are indicators that the single most important factor might simply be the state of macroeconomic slack. The 2010s saw prolonged and large output gaps that persisted for almost a decade after the business cycle peak in 2007. The more recent post-pandemic recovery was far faster, with output gaps essentially erased 18 months after the previous peak.

Since 2015, when prime-age participation started to recover, researchers have found a consistent procyclical relationship between changes in state unemployment rates and prime-age LFP, a relationship that is not present for business cycles between 1990 and 2014. The wage gains experienced by low-wage workers have been larger during the recent economic expansions compared with earlier periods, and since this groups tends to be more responsive to changes in labor market conditions, it is possible that higher wages for workers at the lower end of the wage spectrum drove labor force participation rates up (Prabhakar and Valletta 2024). However, as wage growth has slowed, this procyclical rise has likely cooled for now.

Prime-age women’s labor force participation fell more than men’s in the early months of the pandemic, declining by 3.4 percentage points compared with men’s decline of 2.8 percentage points, although women’s LFP recovered earlier and more consistently than men’s in 2023 (EPI n.d.). Maternal employment and labor force participation were also deeply impacted by the closure of in-person schooling and child care, more so than for fathers and women without children (Landivar et al. 2023). As a result, in contrast to studies done in the 2010s, much of the post-pandemic research has focused on the labor market experiences of women and mothers.

Labor force participation for mothers whose youngest child was under age 5 hit a record high of 71% in September 2023 (Aron-Dine, Bauer, and Powell 2025). There are a number of factors that could have influenced this outcome, including increased access to telework, as mothers with preschool-aged children are the most likely group of prime-age workers to telework, or this could be the result of the procyclical factors previously discussed.

Earlier analysis found that prime-age women contributed the most to the rebound of the overall labor force participation rate post-pandemic, and among all prime-age women, it was mothers with children under 5 who increased their participation the most from 2019 to 2023. However, this seems to be largely because their participation rate, which was already lower than the rate for all prime-age women and mothers of older children, declined the least among mothers in the labor market collapse period (April–May 2019 to April–May 2020). During the recovery period (April–May 2020 to April–May 2023) prime-age women without minor children had a larger impact on the net change in the labor force participation rate, holding population constant. (Bauer and Wang 2023).

Analysis by the Council of Economic Advisers on the impact of the Biden-Harris administration’s $24 billion in child care stabilization funds, which were issued as subsidies to child care providers, estimates a 2–3 percentage point increase in the labor force participation rate for mothers of children under 6 as a result of the funds (CEA 2023). Labor force participation rates stabilized around the time the funds expired, and after that point, growth in LFP for mothers of young children followed the same patterns as those of other women, lending support to the hypothesis that increased child care funding was driving earlier increases. However, these estimates only control for the expanded child tax credit and state unemployment rates, with no control for increases in telework. Telework increases have also been hypothesized to affect all groups of women similarly, but that finding differs by data source. Analysis using Current Population Survey data shows prime-age parents are more likely to telework than workers without children (Aron-Dine, Bauer, and Powell 2025), while others using Census Pulse Survey data found non-mothers were more likely to telework in the first half of 2023 (Bauer and Wang 2023).

Prospects for labor force participation going forward and how policy can affect them

There are many reasons for comparative optimism about prime-age labor force participation going forward, driven by a partial reversal of a number of pressing social challenges. For one, the low points of the 2010s seem to have been significantly driven simply by excess macroeconomic slack. To the degree such prolonged periods of slack can be avoided going forward, labor force participation rates should avoid similar large slumps. For another, the incarcerated population in the United States has fallen significantly in the past 2 decades. To the degree that the future will see fewer workers scarred by a spell of incarceration, this should boost labor force participation. Further, the high point of the opioid epidemic seems to have passed, and rates of addiction are falling, removing another key headwind to labor force participation.

All of these potential tailwinds to labor force participation are obviously contingent on policy decisions—both economic and social. Further, a number of other margins that will affect labor force participation also will be largely driven by policy. Below, we highlight a number of determinants of labor force participation in coming years and assess how policy can increase or reduce their effect.

Efforts to reduce opioid use further may increase labor force participation

Although the exact effects are challenging to measure due to a lack of comprehensive data, there is some evidence suggesting that the increased use of opioids contributed to declining labor force participation in the late 2000s through mid-2010s (Aliprantis, Fee, and Scheitzer 2023). Since that time, a number of laws at the state and national levels have been enacted in response to the opioid crisis. Federally, the Comprehensive Addiction and Recovery Act of 2016, the 21st Century Cures Act, and the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act are intended to lessen the demand and supply of opioids while reducing the harms of opioid use disorder (CBO 2022). These efforts are multifaceted but include strategies such as providing funding to states to invest in prescription drug monitoring programs, increasing budgets for public health services to prevent and treat substance use disorders, and developing treatment alternatives to incarceration.

Tracing the impact of these laws is difficult, in part due to the effects of the pandemic, which contributed to increased opioid use, misuse, and deaths in 2020 (CBO 2022). However, post-2020 some measures have markedly improved. The overall rate of opioid dispensing has declined by roughly 20% since 2019, and opioid deaths involving prescription drugs have declined since their peak in 2017 (CDC 2024; NIDA 2024b). Emergency room visits for suspected nonfatal overdoses related to all opioids also declined over this time period (CDC 2024). At the same time, overdose deaths from any drug and those involving any opioid (not just prescription drugs) continued to increase through 2022 before declining in 2023, although they remain elevated by historical standards (NIDA 2024a).

It is too early to know if these measures will continue to trend downward, but there does not seem to be a simple, straightforward, ongoing connection between opioid misuse and labor force participation. Overdose rates are not a perfect proxy for misuse, but deaths from synthetic opioids increased dramatically after 2014 and remain very high, largely caused by illicitly manufactured fentanyl (NIDA 2024c). This occurred at the same time that prime-age labor force participation has also been increasing. It is possible that there are more complex relationships developing between opioid misuse and LFP, particularly as the opioid crisis changes over time.

Reducing the labor market scarring of incarceration

For Black men in particular, incarceration presents a uniquely challenging obstacle to gaining employment and rejoining the labor force (Pager 2003; Williams, Wilson, and Bergeson 2019; Holzer, Offner, and Sorenson 2005; Ellsworth 2017). At least 1 in 5 Black men will experience incarceration at some point in their lives (Robey, Massoglia, and Light 2023). These results suggest that any successful policy effort to reduce incarceration and recidivism rates would be highly supportive of labor force participation. While recent ban-the-box policies (such as those that do not require job applicants to disclose their criminal history for most jobs) have had mixed results in their ability to promote overall employment (Rose 2021), Bailey et al. (2024) found that children in households that received food stamps had a reduced likelihood of being incarcerated as adults later in life by 0.5 percentage points, suggesting that meeting families’ basic needs can do more than just improve health.

More promising than the ban-the-box policies is California’s 2011 policy to redistribute the costs of sending an adult to prison to the governing locality that makes the decision to incarcerate. This policy is associated with a reduction in the prison population of 50,000 between 2009 and 2019, suggesting that public financing policy can play a surprisingly effective role in supporting labor force participation (Pfaff 2024). The law, AB 109 or colloquially referred to as realignment,” mandated that nonviolent, nonsexual, and nonserious offenders were required to serve sentences under county supervision. Prior to the law, prosecutors, who are paid by the county, were incentivized to prosecute offenses to their highest conviction to get offenders sent to prison, which was paid for exclusively by the state. This redistribution of costs significantly curtailed prosecutors’ incentives to seek higher sentences for less serious offenses and as a result, reduced incarceration rates in California substantially.

Job quality matters to attract workers into the labor market, particularly into some of the fastest-growing occupations

A key headwind for men’s labor force participation in the past few decades has been a slowdown in job growth in sectors like manufacturing and mining that traditionally provided relatively high wages for workers without a college degree. Much of the change in the composition of employment is largely outside the purview of policymakers—but policy can have some effect on the margins of this employment composition. More importantly, how changing employment composition translates into changes in wages or perceived opportunities for different population groups is highly contingent on policy.

Occupational segregation is the tendency for one gender to more likely work in certain occupations than another. For instance, men are more likely to work in manufacturing and construction, while women are more likely to work in education and health care (industrial sectors are provided in Appendix Table 3, but the same phenomenon exists in occupations). Gender stereotypes, such as the idea that women are better suited to caregiving or that men are naturally better at physically demanding tasks, can constrain people’s options and make them more or less likely to pursue traditionally gendered jobs (Palffy, Lehnert, and Backes-Gellner 2023).

Occupational segregation is driven by social and cultural forces that compel women into caring professions (Schieder and Gould 2016). While many people do have choices about which jobs to apply for, accept, or reject, these decisions are made within the context of larger social and cultural influences. Occupational choices are shaped by a lifetime of experiences, including the expectations children are raised with, educational experiences, hiring practices, and norms and beliefs about family roles and the division of household labor held by employers, co-workers, and society. These norms and expectations impact women’s as well as men’s occupational “choice.” As we’ve shown above, the loss of both manufacturing and military jobs in the U.S. came at a cost to men in particular. On the flip side, the growth in jobs in health care will disproportionately benefit those more likely to work in health care, in this case, women.

Figure J illustrates the occupations expected to gain the most jobs, in percent terms, between 2024 and 2034 (BLS 2025a), as well as the share of women in those four occupations in 2024. The industries shown are expected to grow at least twice as fast as the average rate of 4%.

Three of the four fastest-growing occupation groups are dominated by women. The fastest-growing occupation group over the next 10 years—health care support occupations—is expected to grow by 12.4% and is comprised of jobs that pay lower-than-average wages. The median wage in health care support occupations is about three-fourths the median wage overall ($37,000 versus $49,000). Currently women make up about 84% of workers in health care support occupations. Low pay is both a cause and effect of occupational segregation. Jobs in which women are overrepresented tend to provide lower pay and fewer benefits than male-dominated occupations do, and wages tend to fall in occupations as the share of women increases (Levanon, England, and Allison 2009).

Figure J

For workers of any gender to enter those faster-growing occupations, those jobs need to be better. That means better pay, better working conditions, and better benefits. Stronger labor standards, such as a higher minimum wage and overtime protections, can improve those jobs and make them more appealing to a broader range of workers. Increased unionization can also improve pay in those jobs. On average, workers in unionized jobs are paid about 12.8% more than workers in nonunion jobs (EPI 2025c) A key reason jobs in manufacturing could support a middle-class lifestyle was the high unionization rates. There’s no reason currently low-paid health care support occupations couldn’t enjoy such conditions. The number and share of unionized workers in health care support jobs has recently increased, and their wages are higher than those of their nonunion counterparts (BLS 2025b; BLS 2025c).

Labor force participation is more resilient in peer countries

Figure K compares the United States with the OECD average prime-age labor force participation, 1976–2024, women on the left and men on the right. While they display similar overall trends at the endpoints—upward for women and downward for men—there are some notable differences. In the OECD countries, men’s participation also fell between 1976 to the early 2000s, but the losses tapered off quickly, and today, participation remains around its 2000 level. In the United States, men’s participation continued to drop, most notably during the Great Recession and prolonged recovery before starting its upward climb as the economy expanded.

While it is the case that many of our peer countries in the OECD also experienced downturns, particularly in the Great Recession, their labor force participation rates did not fall as far, largely due to different policy responses. Policies such as work sharing and time banking that provide support for workers to stay on the payroll helped blunt the impact of the Great Recession in places like Germany, which saw its unemployment rate tick down at the same time the rate in the U.S. more than doubled (Baker 2018).

Figure K

Women’s labor force participation never stopped its upward rise in the OECD average, even while it softened in the United States following 2000. The steep gains in participation in the U.S. tapered off significantly, while it continued to rise in the OECD until today. The policy environment around work for women is quite different, particularly in Western European countries, which have stronger family leave and child care supports.

There is meaningful evidence that the lack of work-family policies and relatively sparse care infrastructure in the U.S. depresses women’s labor force participation. In 1990, out of 22 OECD countries, the U.S. ranked 6th for women’s prime-age labor force participation, but by 2010 had fallen to 17th place. The lack of family-supportive policies in the U.S., such as paid parental leave and publicly provided child care, can explain 29% of the decline in the U.S.’s ranking of female LFP relative to other OECD countries (Blau and Kahn 2013).

In the subsequent 15 years, the gaps between policies in other OECD countries and the U.S. have typically widened. Compared with other high-income OECD countries, the U.S. is now even more of an outlier on nearly every workplace policy that could help boost labor force participation among workers with family responsibilities.

Since 2010 the total amount of paid parental leave available to two parents in OECD countries has increased from an average of 58.1 weeks to 64.6 weeks (OECD 2024). Yet the United States remains an extreme outlier and is one of the only countries in the world that does not guarantee workers the right to any form of paid parental leave. Across the other 37 OECD countries, mothers are eligible for an average of more than one year (53.5 weeks), and fathers are eligible for more than three months (13 weeks) of paid leave.

Families in the United States also pay more on average for child care than families in other OECD countries. In the U.S., a single parent paid the average wage would need to spend 40% of their wages to pay for center-based care for two toddlers—about 5 times the cost burden (8%) for the OECD, on average (OECD n.d.). And while net costs increased for U.S. families, they declined in most other OECD countries, with the overall OECD average dropping from 15% to 8% between 2004 and 2023.

The cost burden is much greater in the U.S. compared with other countries where child care fees are similarly high or higher because the U.S. does not provide meaningful benefits like child care allowances or fee rebates to help families reduce their financial costs. While there are tax credits that allow some working parents to write off child care expenses, not all families qualify, and the overall impact on net costs is minimal.

The share of GDP the United States spends on early childhood education and care has declined since 2010, while the OECD average has increased (OECD Social Expenditure Database n.d.). In 2021, the last year with complete data on all 38 OECD countries, U.S. spending (0.3% of GDP) was less than half the OECD average (0.7%).

Policies related to remote work and workplace flexibility—such as the ability of workers to alter their start and stop times—were not part of the original analysis conducted by Blau and Kahn (2013). However, flexibility and remote or telework options have been identified as important policies to support labor force participation, particularly among mothers post-2020. As of April 2024, 25 of the 38 OECD countries had laws in place allowing workers to request flexible schedules, remote work, or both (World Bank 2024).

The 2019 Work-Life Balance Directive2 created a right for workers in the European Union to request flexible work arrangements, including remote work, to better coordinate work with family caregiving responsibilities. The law does not guarantee that employers will grant approval to every request, but they are required to seriously consider requests for flexibility and must provide reasons for refusing requests. In the United Kingdom, workers’ rights to request flexible work arrangements were expanded through the Employment Relations (Flexible Working) Act 20233. Workers in the U.K. now have a legal right to request flexibility starting from their first day of employment rather than having to wait 26 weeks before making the request as they did previously.

In the United States, workers do not have an explicit legal right to request remote work or workplace flexibility, and employers are not required to consider such requests when they are made. Although the data are not conclusive, there are indications that increased access to telework during and after the pandemic enabled greater labor force participation, including among mothers of young children. Broadening access to flexibility and remote work would likely further increase entry or reentry into the labor force among workers with caregiving responsibilities, as well as supporting continued participation for current workers.

Investing in children is a long-run strategy to increase labor force participation in the future

Previous sections noted the sharp increase in college attainment among the U.S. population in recent decades and also noted that college graduates saw much slower rates of declines in labor force participation than noncollege workers did. The public sector has supplied the majority of financing for higher education in the United States for the entire post-World War II period. In short, the boost to labor force participation (and economic growth generally) supplied by higher education was a policy choice.

Policy choices about how prepared future generations will be to participate in the labor force are not just confined to education spending (though that is obviously important as well). Investing in children by supporting their basic needs such as food, medical care and child care has been shown to have demonstrable long-term effects on health and economic sufficiency. These, in turn, support attachment to the labor market. Early childhood is a sensitive period, and investments in children tend to have large benefits as they age (Cunha and Heckman 2007; Heckman 2008). Additionally, a stronger welfare state raises the income and resources of a child’s family (Ruhm and Waldfogel 2012). Importantly, these benefits tend to outweigh the costs of the program or any potential impacts on the parents (Aizer, Hoynes, and Lleras-Muney 2022).

Long-term studies have tracked children in households with access to food stamps (SNAP), early childhood education, and Medicaid to assess the impact of these programs on these children as adults. With respect to food stamps, Hoynes, Schanzenbach, and Almond (2016) found that access to food stamps for households with children led to statistically significant improvements in measures of metabolic health when they were adults. Moreover, researchers found positive impacts of receiving food stamps on economic sufficiency (high school completion, use of food stamps, and earnings), with statistically significant increases among adult women who receive food stamps. Bailey et al. (2024) linked the 2000 Census and 2001–2013 American Community Survey to information from Social Security to examine how SNAP program rollouts from 1961–1975 impacted children as adults. They found that children with access to food stamps before age 5 have better outcomes as adults in the form of increased economic self-sufficiency (3% standard deviation increase), human capital (6% SD increase), quality of neighborhood residence (8% SD increase), and a 1.2-year increase in life expectancy. 

Several studies have also documented the long-run impact of Medicaid with implications for labor market participation. Miller and Wherry (2019) studied infants who gained access to Medicaid in utero via their mother’s prenatal coverage. They find that infants with prenatal coverage had lower rates of chronic health conditions as adults, fewer hospitalizations, and increased high school graduation rates. Thompson (2017) examined the long-term impact of Medicaid access and found that each additional year of Medicaid eligibility during childhood improved overall adult health (self-score evaluations) and reduced chronic conditions and asthma prevalence as adults. Given that disability and chronic health conditions are some of the main reasons that individuals stay out of the labor force, these studies show that access to Medicaid as a child can promote the conditions that would lead to labor force attachment.

Finally, Brown, Kowalski, and Lurie (2020) use tax data to estimate the long-term impact of Medicaid eligibility in childhood on a variety of outcomes measured at ages in early adult life. They find that eligibility for Medicaid during childhood increased college enrollment rates, delayed fertility, reduced mortality, and reduced dependence on EITC benefits, and led to higher tax payments among adults, suggesting that access to Medicaid has the long-term benefit of improved economic self-sufficiency and employment.

While the U.S. doesn’t have a national pre-K early-childhood program, studies of individual programs show promising results. Chicago’s Child-Parent Center Education Program preschool was linked to higher educational attainment and socioeconomic status, a higher likelihood of health insurance coverage, and lower rates of justice-system involvement and substance abuse (Reynolds et al. 2011). Michigan’s HighScope Perry Preschool program was linked to fewer arrests, higher earnings, and higher educational achievement and attainment (Schweinhart 2005), and careful cost- benefit analysis estimated that every dollar invested at age 4 yields a return of $60–$300 by age 65 (Heckman et al. 2010). Additionally, studies of state-introduced universal kindergarten programs in the 1960s and 1970s found that this additional early childhood education increased both educational attainment for some groups of students (Cascio 2009, 2010; Dhuey 2011); and labor market outcomes in the form of weeks worked and wages (Dhuey, 2011), suggesting that early childhood education interventions can support labor market attachment.

Studies in Europe have documented the impact of pre-K and early childhood care on long-term outcomes. In Denmark, researchers found that early increased preschool density was positively associated with completed schooling, particularly for daughters of less educated mothers, and later adult earnings (Bingley and Westergaard-Nielsen, forthcoming). In France, researchers found that the large-scale universal preschool program increased test scores, high school graduation rates, and adult wages, with larger effects for children from disadvantaged backgrounds (Dumas and LeFranc 2010). In Norway, an expansion of subsidized child care led to increased educational attainment (more years of schooling, higher rates of college attendance) and labor market participation (Havnes and Mogstad 2011).

The role labor force participation rates play in the economic future of the U.S.

Labor force growth is a key element of economic growth more generally. At the most basic level, growth in overall gross domestic product (GDP) over brief periods of time can be proxied as the sum of the growth rates of the labor force and of labor productivity—with productivity defined as the amount of output generated in an average hour of work in the economy. Given this, every percentage point rise or fall in the growth rate of the labor force translates one for one into a corresponding change in overall GDP growth.

In coming decades, the question that matters more than any other for projecting labor force growth for the U.S. economy is the pace of net immigration. For example, the Congressional Budget Office projects that the U.S. labor force will grow by just under 7% from 2025 to 2035 (CBO 2025a). But if the influence of immigration flows is removed, this growth will fall to just 0.5% over the entire next 10 years.4

There is no realistic scope at all for changes within U.S.-born labor force participation rates to fundamentally change this and lead to significant increases in the labor force over the next decade. Most importantly, the U.S.-born population is aging fast. Over the next 10 years the share of the U.S. adult population over the age of 65 will rise by another 4 percentage points (to over 27%). Given the gap in labor force participation rates for workers aged 65–74 and those under the age of 65, this translates into a reduction in the overall labor force participation by roughly a full percentage point over the decade—a powerful headwind to growth.5

In theory, the CBO has taken some account of the fact that major headwinds to growth in prime-age participation rates over the past decade or so should likely reverse (or at least, dial down) in the next 10 years. These headwinds include excess labor market slack, the stock of prime-age adults with some spell of incarceration in their past, the prevalence of opioid addiction, and the steady shrinkage of military employment scaled against the civilian workforce. If none of these past headwinds to labor force participation were taken into account in CBO projections, their reversal could conceivably add 1–2 percentage points to prime-age labor force participation rates over the next 10 years. But, again, this doesn’t come close to rivalling the potential effects of changes in net immigration, and CBO has likely accounted for a number of these influences in their projections, at least in part.6

If one of the more ambitious long-run strategies for boosting future labor force participation highlighted in the previous section was undertaken (large investments in child health, nutrition, and education for example), these effects could conceivably add another percentage point to labor force participation rates, but only at a quite long time horizon (well over 10 years).7

One upshot of the dominance of immigration flows in conditioning future labor force growth and the continued downward pressure on labor force growth imposed by the aging of the U.S.-born population is that anybody promising large increases in GDP growth in coming years without calling for higher rates of immigration will have a very hard time fulfilling this. Again, every percentage point decline in the growth rate of the labor force subtracts a percentage point from GDP growth, and changes in labor force growth in the coming decade will be driven near entirely by immigration inflows.

Of course, GDP growth is (roughly) the sum of growth in the labor force plus the growth of productivity. In theory, a slower growth rate of the labor force could be overcome by a surge in productivity growth, and overall GDP growth could still rise. However, productivity growth over the past century in the U.S. economy has fluctuated with a relatively narrow band—essentially between 1% and 2% annually. Since the 1960s, spells of productivity growth over 2% have been rare—just the late 1990s and early 2000s. It is theoretically possible that we are in a stage currently where technological change will accelerate and productivity growth will surge to the higher bands of its historical experience, but this is very hard to bank on. Promises of future growth surges from other technological changes (like robotization in the 2010s) yielded real, but quite modest, productivity growth.

But while productivity growth is unlikely to generate historically fast GDP growth in coming decades, it is the most relevant part of the growth equation to focus on. A higher GDP driven by a larger labor force does not necessarily raise living standards. It is productivity growth alone that makes a country richer over time in the most relevant sense—providing the potential for higher living standards per person.

By far the most substantive way that differing rates of labor force growth can affect Americans’ economic future is through the tax and transfer system. The federal government in the U.S. has historically taken on the role of ensuring adequate income in retirement for all citizens by running social insurance programs—Social Security and Medicare—through the nation’s fiscal system. Very roughly speaking, current workers are taxed to provide benefits to current retirees. As the share of the population that is retired rises relative to the stock of current workers, this means a higher share of workers’ output needs to be devoted to providing income for retirees.

This need not imply any pronounced economic pressure. Productivity growth means that even if a rising share of workers’ incomes is devoted to social insurance for current retirees that workers’ net-of-tax income levels can still rise steadily over time. But this demographic angle of the large social insurance programs run by the federal government does pose potential political challenges. These political challenges could well be lessened by policy decisions that keep the ratio of current workers to current retirees higher than it otherwise would have been—and here is where issues of labor force participation could matter.

Conclusion

Labor force participation is both an input and a consequence of a healthy economy. While there is no ideal labor force participation rate that policymakers should target, they should target any barriers that are keeping willing workers from being able to actively search for work. These barriers include too-slack labor markets stemming from macroeconomic policy failures; labor market discrimination; insufficient investment in workers’ health, skills, and credentials; and a failure to make investments needed to enable parents with young children to also participate meaningfully in the labor market.

Outside of immigration, however, the changes to labor force participation that can be leveraged by even quite ambitious policy changes will be relatively small and will not meaningfully change the trajectory of the U.S. macroeconomy over a decade or so. This does not mean they are not worth doing, instead it means that policymakers should be realistic when claiming that future economic growth can be boosted by increasing growth in the U.S. labor force.

Appendix

Appendix Table 1

Appendix Table 2

Appendix Table 3

Acknowledgments

The authors thank Katie deCourcy and Stevie Marvin for research assistance and Grace Park for editing. This project was made possible by financial support from the Peter G. Peterson Foundation.

Notes

1. We should note that this change in employment shares by skill- or credential-grouping does not predict at all accurately any related change in wages. In short, one can believe that changing employment shares by occupation—even those driven by technological changes—fail to move relative wages or inequality in any significant way, and that non-relationship between employment and wage changes by occupation is validated in the data (see Mishel, Schmitt, and Shierholz 2013).

2. Council Directive 2019/1158, 2019 O.J. (L 188), 79–93.

3. The Employment Relations (Flexible Working) Act 2023, c. 24 (UK), https://www.legislation.gov.uk/uksi/2024/438/made.

4. Authors’ analysis is based on information in CBO 2025a, b. The size of the over-19 labor force over the next decade is provided directly in CBO 2025b. This data also provide the share of growth in the over-19 population that is accounted for by immigration. To obtain the counterfactual growth, we just removed the portion of growth associated with immigration each year and recalculated the level of the labor force for each year in the next decade.

5. Numbers in this paragraph are based on authors’ analysis of data in CBO 2025a, b. CBO 2025b reports that the share of the over-64 population will rise as a share of the total adult population by almost exactly 3 percentage points between 2025 and 2035. Currently, the LFPR for workers between the ages of 65 to 69 is almost exactly 30 percentage points lower than for workers between the ages of 55 to 64. Multiplying these together (which gives 0.9%) should give a very rough sense of the downward pressure on labor supply stemming from aging.

6. Schmitt and Warner (2011) estimated that the scarring effect of incarceration could reduce the employment-to-population ratio of men by between 0.6 to 2.6 percentage points by 2008. Given that the stock of incarcerated men has fallen by roughly 20% since its highest point (and a bit more than this as a share of the population), this penalty going forward could have been reduced by 0.15 to 0.6 percentage points. In regard to opioids, given estimates that rising opioid use throughout the 2000s could have reduced labor force participation rates by as much as 1 percentage point, any leveling off of this could remove a powerful headwind to labor force growth, and any affirmative reduction in the incidence of opioid addiction should, in theory, potentially boost labor force growth.

7. Most estimates of the effect of early childhood investments—whether it be early education, health, or nutritional investments—report the effect on earnings of exposed children when they become adults. Assuming a package of investments in today’s children were able to boost their earnings by 5% when they became adults (which seems plausible given that early childhood educational investments alone have been estimated to increase annual earnings of exposed children by over 20%, and the share of today’s children not currently receiving high-quality early childhood education is estimated to be over half of all children (see Lynch and Vaughul 2015)). If increased labor force participation accounted for a fifth of this total earnings effect (as opposed to lower unemployment rates, higher hours worked during a year, and higher hourly wages), then a range of estimates would indicate that these investments could boost the adult labor force participation rates of today’s children by roughly a percentage point. It seems plausible that increased labor force participation could, by itself, explain a fifth of projected future earnings. For example, annual earnings of workers with a college degree are roughly 60% higher than with only a high school degree. This 60% difference can be very roughly expressed as the sum of differences in labor force participation, unemployment rates, hours worked per year, and average hourly earnings. Labor force participation rates for workers with a bachelor’s degree or greater are roughly 12% higher than for workers with only a high school diploma , which is roughly a fifth of the total difference in annual earnings. 

References

Aguiar, Mark, Mark Bils, Kerwin Kofi Charles, and Erik Hurst. 2017. “Leisure Luxuries and the Labor Supply of Young Men.” National Bureau of Economic Research Working Paper no. 23552, June 2017.

Aizer, Anna, Hilary Hoynes, and Adriana Lleras-Muney. 2022. “Children and the US Social Safety Net: Balancing Disincentives for Adults and Benefits for Children.” Journal of Economic Perspectives 36, no. 2: 149–174. https://doi.org/10.1257/jep.36.2.149.

Aliprantis, Dionissi, Kyle Fee, and Mark E. Schweitzer. 2023. “Opioids and the Labor Market.”  Labour Economics 85 (December 2023). https://doi.org/10.1016/j.labeco.2023.102446.

Arnon, Alex, Aidan O’Connell, Jesús Villero, and Youran Wu. 2023. Explaining the Rise in Prime Age Women’s Employment. Penn Wharton Budget Model, November 2023.

Aron-Dine, Aviva, Lauren Bauer, and Eileen Powell. 2025. “Seven Economic Facts About Prime-Age Labor Force Participation.” The Hamilton Project, The Brookings Institution, July 1, 2025.

Autor, David H., and Mark G. Duggan. 2006. “The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding.” Journal of Economic Perspectives 20, no. 3: 71–96. https://doi.org/10.1257/jep.20.3.71.

Bailey, Martha J., Hilary Hoynes, Maya Rossin-Slater, and Reed Walker. 2024. “Is the Social Safety Net a Long-Term Investment? Large-Scale Evidence from the Food Stamps Program.” Review of Economic Studies 91, no. 3: 1291–1330. https://doi.org/10.1093/restud/rdad063.

Baker, Dean. 2018. “Can Work Sharing Bring the US Workplace into the 20th Century?” Comments presented at the Work and Family Researchers Network Conference, Washington D.C., June 21, 2018.

Bauer, Lauren, and Sarah Yu Wang. 2023. Prime-Age Women Are Going Above and Beyond in the Labor Market Recovery. The Brookings Institution, August 2023.

Bengali, Leila, Evgeniya A. Duzhak, and Cindy Zhao. 2023. “Men’s Falling Labor Force Participation across Generations.” FRBSF Economic Letter (Federal Reserve Bank of San Francisco), October 10, 2023.

Binder, Ariel J., and John Bound. 2019. “The Declining Labor Market Prospects of Less-Educated Men.” Journal of Economic Perspectives 33, no. 2: 163–190. https://doi.org/10.1257/jep.33.2.163.

Bingley, Paul, and Niels Westergaard-Nielsen (in press). “Intergenerational Transmission and Day Care in Denmark.” In Inequality from Childhood to Adulthood: A Cross-National Perspective on the Transmission of Advantage, edited by John Ermisch, Markus Jantti, and Timothy Smeeding. New York: Russell Sage Foundation.

Blau, Francine D., and Lawrence M. Kahn. 2013. “Female Labor Supply: Why Is the United States Falling Behind?” American Economic Review 103, no. 3: 251–256. https://doi.org/10.1257/aer.103.3.251.

Brown, David W., Amanda E. Kowalski, and Ithai Z. Lurie. 2020. “Long-Term Impacts of Childhood Medicaid Expansions on Outcomes in Adulthood.” Review of Economic Studies 87, no. 2: 792–821. https://doi.org/10.1093/restud/rdz039.

Bureau of Justice Statistics (BJS). n.d. “Jurisdiction Population, 1978–2021.” [chart], Frequently Requested Figures. Accessed August 15, 2025.

Bureau of Labor Statistics (BLS). 2025a. “Table 1.1 Employment by Major Occupational Group, 2024 and Projected 2034 (Employment in Thousands)” (web page). Last modified August 28, 2025.

Bureau of Labor Statistics (BLS). 2025b. “42. Union Affiliation of Employed Wage and Salary Workers by Occupation and Industry.” (web page). Last modified January 29, 2025.

Bureau of Labor Statistics (BLS). 2025c. “43. Median Weekly Earnings of Full-Time Wage and Salary Workers by Union Affiliation, Occupation, and Industry.” (web page). Last modified January 29, 2025.

Burk, David M. E., and Joshua Montes. 2018. Factors Affecting the Labor Force Participation of People Ages 25–54. Congressional Budget Office, February 2018.

Cascio, Elizabeth U. 2009. “Maternal Labor Supply and the Introduction of Kindergartens into American Public Schools.” Journal of Human Resources 44, no. 1 (January): 140–170. https://doi.org/10.3368/jhr.44.1.140.

Cascio, Elizabeth U. 2010. “What Happened When Kindergarten Went Universal?” Education Next 10, no. 2: 62–69.

Center on Budget and Policy Priorities (CBPP). 2025. “Chart Book: Social Security Disability Insurance” (web page). Last modified February 28, 2025.

Center for Disease Control (CDC). 2024. “Opioid Dispensing Rate Maps” (web page). Last modified November 7, 2024.

Center for Disease Control (CDC). 2025. “DOSE-SYS Dashboard: Nonfatal Overdose Syndromic Surveillance Data” (web page). Last modified August 29, 2025.

Chai, Grace, Jing Xu, James Osterhout, Mark A. Liberatore, Kathleen L. Miller, Carolyn Wolff, Marisa Cruz, Peter Lurie, and Gerald Dal Pan. 2018. “New Opioid Analgesic Approvals and Outpatient Utilization of Opioid Analgesics in the United States, 1997 through 2015.” Anesthesiology 128, no. 5: 953–966. https://doi.org/10.1097/ALN.0000000000002187.

Collins, Caitlyn, Leah Ruppanner, Liana Christin Landivar, and William J. Scarborough. 2021. “The Gendered Consequences of a Weak Infrastructure of Care: School Reopening Plans and Parents’ Employment During the COVID-19 Pandemic.” Gender & Society 35, no. 2: 180–193. https://doi.org/10.1177/08912432211001300.

Congressional Budget Office (CBO). 2022. The Opioid Crisis and Recent Federal Policy Responses. Publication no. 58221, September 2022.

Congressional Budget Office (CBO). 2025a. “Economic Projections” [Excel file], Budget and Economic Data, January 2025. Last modified April 2025.

Congressional Budget Office (CBO). 2025b. “The Demographic Outlook: 2025 to 2055” (web page). Accessed August 15, 2025.

Council of Economic Advisers (CEA). 2016. The Long-Term Decline in Prime-Age Male Labor Force Participation. June 2016.

Council of Economic Advisers (CEA). 2023. “Did Stabilization Funds Help Mothers Get Back to Work After the COVID-19 Recession?” Council of Economic Advisers Working Paper, November 2023.

Cunha, Flavio, and James Heckman. 2007. “The Technology of Skill Formation.” American Economic Review 97, no. 2 (2007): 31–47. https://doi.org/10.1257/aer.97.2.31.

Dhuey, Elizabeth. 2011. “Who Benefits from Kindergarten? Evidence from the Introduction of State Subsidization.” Educational Evaluation and Policy Analysis 33, no. 1: 3–22. https://doi.org/10.3102/0162373711398125.

Dumas, Christelle, and Arnaud Lefranc. 2010. “Early Schooling and Later Outcomes: Evidence from Pre-School Extension in France.” Théorie Économique, Modélisation et Applications Working Paper no. 2010-07, November 2010.

Economic Policy Institute (EPI). n.d. “Labor Force Participation Rate, Ages 25–54, by Gender, 1989–2025” in Jobs and Unemployment (web page). Accessed August 15, 2025.

Economic Policy Institute (EPI). 2025. Current Population Survey Extracts, Version 2025.6.11, https://microdata.epi.org.

Economic Policy Institute (EPI). 2025a. “Count of Civilian Population, Ages 16+” [web], State of Working America Data Library. Published 2025.

Economic Policy Institute (EPI). 2025b. “Number of Labor Force Participants” [web], State of Working America Data Library. Published 2025.

Economic Policy Institute (EPI). 2025c. “Union Wage Premium, Average (Regression-Based)” [web], State of Working America Data Library. Published 2025.

Ellsworth, Mary. 2017. “Does Criminal History Impact Labor Force Participation of Prime-Age Men?” Scientia et Humanitas: A Journal of Student Research 7: 41–52.

Goldin, Claudia. 2006. “The Quiet Revolution That Transformed Women’s Employment, Education, and Family.” American Economic Review 96, no.2: 1–21. https://doi.org/10.1257/000282806777212350.

Gould, Elise. 2020. State of Working America Wages 2019: A Story of Slow, Uneven, and Unequal Wage Growth over the Last 40 Years. Economic Policy Institute, February 2020.

Graham, Carol, and Sergio Pinto. 2021. “The Geography of Desperation in America: Labor Force Participation, Mobility, Place, and Well-Being.” Social Science & Medicine 270, (February): 113612. https://doi.org/10.1016/j.socscimed.2020.113612.

Gray, Kimbrough. 2019. “Xboxes and Ex-Workers? Gaming and Labor Supply of Young Adults in the U.S.” Munich Personal RePEc Archive Paper no. 100245, June 2019.

Havnes, Tarjei, and Magne Mogstad. 2011. “No Child Left Behind: Subsidized Child Care and Children’s Long-Run Outcomes.” American Economic Journal: Economic Policy 3, no. 2 (May): 97–129. https://doi.org/10.1257/pol.3.2.97.

Heckman, James J. 2008. “Schools, Skills, and Synapses.” Economic Inquiry 46, no. 3 (2008): 289–324. https://doi.org/10.1111/j.1465-7295.2008.00163.x.

Heckman, James J., Seong Hyeok Moon, Rodrigo Pinto, Peter A. Savelyev, and Adam Yavitz. 2010. “The Rate of Return to the HighScope Perry Preschool Program.” Journal of Public Economics 94, no. 1–2: 114–128. https://doi.org/10.1016/j.jpubeco.2009.11.001.

Holzer, Harry J., Paul Offner, and Elaine Sorensen. 2005. “What Explains the Continuing Decline in Labor Force Activity Among Young Black Men?” Labor History 46, no. 1: 37–55. https://doi.org/10.1080/0023656042000329864.

Hoynes, Hilary, Diana Whitmore Schanzenbach, and Douglas Almond. 2016. “Long-Run Impacts of Childhood Access to the Safety Net.” American Economic Review 106, no. 4: 903–934. https://doi.org/10.1257/aer.20130375.

Kahn, Joan R., Javier García-Manglano, and Suzanne M. Bianchi. 2014. “The Motherhood Penalty at Midlife: Long-Term Effects of Children on Women’s Careers.” Journal of Marriage and Family 76, no.1: 56–72. https://doi.org/10.1111/jomf.12086. 

Krause, Eleanor, and Isabel Sawhill. 2017. What We Know and Don’t Know About Declining Labor Force Participation: A Review. Brookings Institution, May 2017.

Krueger, Alan B. 2017. “Where Have All the Workers Gone?: An Inquiry into the Decline of the U.S. Labor Force Participation Rate.” Brookings Papers on Economic Activity 2017, no. 2: 1–87. https://dx.doi.org/10.1353/eca.2017.0012.

Landivar, Liana Christin, William J. Scarborough, Leah Ruppanner, Caitlyn M. Collins, and Lloyd Rouse. 2023. “Remote Schooling and Mothers’ Employment During the COVID-19 Pandemic by Race, Education, and Marital Status.” Russell Sage Foundation Journal of the Social Sciences 9, no. 3: 134–158. https://doi.org/10.7758/RSF.2023.9.3.06.

Larson, Ryan, Sarah Shannon, Aaron Sojourner, and Chris Uggen. 2022. “Felon History and Change in US Employment Rates.” Social Science Research 103. https://doi.org/10.1016/j.ssresearch.2021.102649.

Levanon, Asaf, Paula England, and Paul Allison. 2009. “Occupational Feminization and Pay: Assessing Causal Dynamics Using 1950–2000 U.S. Census Data.” Social Forces 88, no. 2: 865–892.

Levin, Remy, and Daniela Vidart. 2025. “‘Nobody Wants to Work Anymore’: Lifetime Wage Experiences and the Decline of Male LFP in the United States.” University of Connecticut Working Paper, March 2025. http://dx.doi.org/10.2139/ssrn.5216777.

Lynch, Robert, and Kavya Vaghul. 2015. The Benefits and Costs of Investing in Early Childhood Education. Washington Center for Equitable Growth, December 2015.

Maclean, Johanna Catherine, Justine Mallatt, Christopher J. Ruhm, and Kosali Simon. 2020. “Economic Studies on the Opioid Crisis: A Review.” National Bureau of Economic Research Working Paper no. 28067, November 2020. https://doi.org/10.3386/w28067.

Miller, Sarah, and Laura R. Wherry. 2019. “The Long-Term Effects of Early Life Medicaid Coverage.” Journal of Human Resources 54, no.3: 785–824. https://doi.org/10.3368/jhr.54.3.0816.8173R1.

Mishel, Lawrence, John Schmitt, and Heidi Shierholz. 2013. Assessing the Job Polarization Explanation of Growing Wage Inequality. Economic Policy Institute, January 2013.

Morrissey, Taryn W. 2017. “Child Care and Parent Labor Force Participation: A Review of the Research Literature.” Review of Economics of the Household 15: 1–24. https://doi.org/10.1007/s11150-016-9331-3.

National Academies of Sciences, Engineering, and Medicine (NASEM). 2017. Pain Management and the Opioid Epidemic: Balancing Societal and Individual Benefits and Risks of Prescription Opioid Use. Washington, D.C.: National Academies Press. https://doi.org/10.17226/24781.

National Center for Education Statistics (NCES). 2024. “Table 4. Number and Percentage Distribution of Students Enrolled at Title IV Institutions, by Enrollment Status, Student Age, and Level and Control of Institution: United States, Fall 2023” (web page). Accessed August 15, 2025.

National Institute on Drug Abuse (NIDA). 2024a. “U.S. Overdose Deaths by Sex, 1999–2023″ in “Drug Overdose Deaths: Facts and Figures” (web page). Accessed August 15, 2025.

National Institute on Drug Abuse (NIDA). 2024b. “U.S Overdose Deaths Involving Prescription Opioids, 1999–2023” in “Drug Overdose Deaths: Facts and Figures” (web page). Accessed August 15, 2025.

National Institute on Drug Abuse (NIDA). 2024c. “U.S. Overdose Deaths, Select Drugs or Drug Categories, 1999–2023″ in “Drug Overdose Deaths: Facts and Figures” (web page). Accessed August 15, 2025.

Organisation for Economic Co-operation and Development (OECD). 2024. PF2.1 Key Characteristics of Parental Leave Systems. Last updated December 2024.

Organisation for Economic Co-operation and Development (OECD). n.d. “Net Childcare Cost for Parents Using Centre-Based Childcare” [table], OECD Data Explorer. Accessed August 15, 2025.

Palffy, Patricia, Patrick Lehnert, and Uschi Backes-Gellner. 2023. “Social Norms and Gendered Occupational Choices of Men and Women: Time to Turn the Tide?” Industrial Relations 62, no. 4: 380–410. https://doi.org/10.1111/irel.12332.

Pager, Devah. 2003. “The Mark of a Criminal Record.” American Journal of Sociology 108, no. 5: 937–975. https://doi.org/10.1086/374403.

Pfaff, John. 2024. “Realignment: The Transformative (and Complicated) Reform No One Talks About.” Prisons, Prosecutors, and the Politics of Punishment, June 11, 2024.

Prabhakar, Deepika Baskar, and Robert G. Valletta. 2024. “Why Is Prime-Age Labor Force Participation So High?” FRBSF Economic Letter (Federal Reserve Bank of San Francisco), February 5, 2024.

Reynolds, Arthur J., Judy A. Temple, Suh-Ruu Ou, Irma A. Arteaga, and Barry A. B. White. 2011. “School-Based Early Childhood Education and Age-28 Well-Being: Effects by Timing, Dosage, and Subgroups.” Science 333, no. 6040: 360–364. https://doi.org/10.1126/science.1203618.

Robey, Jason P, Michael Massoglia, and Michael T. Light. 2023. “A Generational Shift: Race and the Declining Lifetime Risk of Imprisonment.” Demography 60, no. 4: 977–1003. https://doi.org/10.1215/00703370-10863378.

Rose, Evan K. 2021. “Does Banning the Box Help Ex-Offenders Get Jobs? Evaluating the Effects of a Prominent Example.” Journal of Labor Economics 39, no. 1 (January): 79–113. https://doi.org/10.1086/708063.

Ruhm, Christopher, and Jane Waldfogel. 2012. “Long-Term Effects of Early Childhood Care and Education.” Nordic Economic Policy Review no. 1 (2012): 23–51.

Sandler, Danielle, and Nichole Szembrot. 2019. “Maternal Labor Dynamics: Participation, Earnings, and Employer Changes.” U.S. Census Bureau, Center for Economic Studies Discussion Papers 19–33, December 2019.

Schieder, Jessica, and Elise Gould. 2016. “Women’s Work” and the Gender Pay Gap. Economic Policy Institute, July 2016.

Schmitt, John, and Kris Warner. 2011. “Ex-Offenders and the Labor Market.” WorkingUSA: The Journal of Labor and Society 14, no. 1 (March 2011): 87–109.

Schweinhart, Lawrence J. 2005. Lifetime Effects: The High/Scope Perry Preschool Study Through Age 40. Ypsilanti, M.I.: High/Scope Press.

Shierholz, Heidi. 2012. Labor Force Participation: Cyclical Versus Structural Changes Since the Start of the Great Recession. Economic Policy Institute, May 2012.

Thompson, Owen. 2017. “The Long-Term Health Impacts of Medicaid and CHIP.” Journal of Health Economics 51: 26–40. https://doi.org/10.1016/j.jhealeco.2016.12.003.

Tüzeman, Didem, and Thao Tran. 2019. “The Uneven Recovery in Prime-Age Labor Force Participation.”  Economic Review, Federal Reserve Bank of Kansas City, 2019 Issue Q III: 21–41.

Valletta, Robert G., and Nathaniel Barlow. 2018. “The Prime-Age Workforce and Labor Market Polarization.” FRBSF Economic Letter (Federal Reserve Bank of San Francisco), September 10, 2018.

Williams, Jason M., Sean K. Wilson, and Carrie Bergeson. 2019. “‘It’s Hard Out Here If You’re a Black Felon’: A Critical Examination of Black Male Reentry.” Prison Journal 99, no. 4: 437–458. https://doi.org/10.1177/0032885519852088.

Woods, Corinne, Grace Chai, Tamra Meyer, Judy Staffa, and Gerald Dal Pan. 2021. “Patterns of Opioid Analgesic Use in the U.S., 2009 to 2018.” Pain 162, no. 4 (April 2021): 1060–1067. https://doi.org/10.1097/j.pain.0000000000002101.

World Bank. 2024. “Women, Business and the Law 2.0 Data for 2024” [Excel file], Women, Business and the Law. Last modified March 4, 2024.

Wu, Pinghui. 2022. “Wage Inequality and the Rise in Labor Force Exit: The Case of US Prime-Age Men.” Federal Reserve Bank of Boston Research Department Working Papers no. 22–16, September 2022. https://doi.org/10.29412/res.wp.2022.16.

Although job growth began to wane in the second half of 2024, the current administration’s economic mismanagement has led to a significant slowdown in job growth this summer. The most recent jobs report confirmed that the economy actually lost jobs in June 2025, and job growth for August was much weaker than anticipated.

Despite all this chaos and uncertainty, Hispanic workers have managed to hold on to their previous job market gains. This resilience is largely a story about employment growth among Latinas. But there are growing signs that these workers and their families remain vulnerable to economic hardship as the current administration attacks immigrants, basic needs programs, and common-sense economics.

Despite a labor market slowdown, Hispanic workers continued to show strength in the first half of 2025

By 2023, the employment rate of Hispanic workers (63.8%) had achieved a near-full recovery from the shock of the COVID-19 pandemic. Despite weaker overall job growth earlier this year, the same share of Hispanic workers remained employed in April 2025 (see Figure A). While this figure declined marginally to 63.4% in August 2025, it is much less pronounced than the decline Black workers are now experiencing. This is because Black workers are more directly affected by federal government layoffs and are generally among the first to sharply experience the adverse effects of an economic slowdown and eventual downturn.

Figure A

Latina workers remain the backbone of this story of resilience

Although Latinos have historically enjoyed higher employment rates than Latinas, the record gains for Hispanic workers over the last few years have been largely driven by Latinas. Despite being disproportionately affected by the pandemic recession, Latinas reached a record-high employment rate (56%) in 2023. The share of Latinas with a job reached a new peak (59.6%) in April 2025 (see Figure B). Once again, this experience differs from that of Black women, who have been adversely impacted by the weaker job growth since February of this year. In fact, the employment rate of Latinas surpassed that of Black women for the first time in March 2025.  

Figure B

Hispanic workers continue to face persistent disparities in earnings and poverty

Undoubtedly, Hispanic workers have shown remarkable resilience in the face of the Trump-Vance administration slowing job growth dramatically in 2025. But these workers and their families remain vulnerable to economic insecurity as fears of a downturn continue to rise. Income disparities and variability leave Hispanic workers and their families with less financial cushion than their peers to maintain their standard of living in case of a job loss. Less than half of Hispanic adults have enough savings to cover an unexpected $400 expense with cash or its equivalent.   

Latinas and Hispanic children are especially vulnerable to economic insecurity and hardship. Latinas face a greater pay gap than most other groups of women in the labor market. Inequities in household incomes also leave Hispanic children three times more likely to experience poverty than their white peers. Given their material needs, these families and children will be unfairly affected by a weakening economy and Trump’s attacks on basic needs programs like food stamps and Medicaid—not to mention a senseless approach to immigration and trade policy.

1. There has been a clear deterioration in the labor market for Black workers this year: the unemployment rate is rising and employment is falling.
2. The decline in Black workers’ employment appears to be concentrated among Black women while Black men’s employment rates appear more stable.
3. Since January 2025, overall women’s employment has fallen most in professional and business services, manufacturing, and federal government—suggesting likely culprits for the decline in Black women’s employment.

An important signal that the rising Black unemployment rate may actually be more than a temporary blip in a notably volatile data series is that the share of employed Black adults between the ages of 25 and 54 is down compared to the last couple of years. After peaking at a historic annual high of 77.9% in 2024, the average so far this year is 76.6%. Until now, the rate had risen every year since 2021.

Another developing news story that has garnered increasing attention is the reported 300,000 Black women losing jobs and/or leaving the labor force in recent months. While a number that big certainly makes headlines, employment levels from the monthly household survey—especially those based on a small demographic slice of the monthly survey sample—should always be used with caution. While I’m not convinced that 300,000 is the most accurate accounting of the situation, Black women are uniquely experiencing a decline in employment that is not observed among other groups of women or Black men.

A clearer and more reliable indicator of how Black women are doing in the labor market is their employment-to-population ratio (EPOP). As Figure A shows, Black women’s employment has dropped sharply this year, but there has been a longer downward trend that started in early 2024. This stands in stark contrast to the trend for white women whose EPOP has changed little over the same time while Hispanic women have seen a slight increase.

Figure A

Similarly, Figure B shows that the EPOP for Black men in the same age group has been much more stable over the last three years. Since the decline for Black women is not reflected in other group trends by gender or race alone, there appears to be something happening in the labor market that has been particularly damaging to Black women. Below, I explore possible explanations based on analysis of payroll employment data.

Figure B

The 2020 pandemic recession showed how occupational segregation can contribute to a larger decline in employment among groups overrepresented in industries with the largest job losses. While the Bureau of Labor Statistics does not report industry-specific job losses by race and gender, they do produce a series on women’s payroll employment using data collected in the monthly establishment survey. And although the data from the household and establishment surveys are not directly comparable, checking for similar or related trends can be informative. With those caveats in mind, Figure C shows that women’s payroll employment has declined in eight industries between January and August of this year. The largest of those losses have occurred in professional and business services (–83,000), manufacturing (–41,000), and federal government (–33,000). Close to half of all workers in federal government and professional and business services are women, as are 29% of manufacturing workers (see Table 1).

Figure C

Since federal job cuts have frequently been cited as a contributing factor for employment losses of Black women due to overrepresentation in that sector relative to their share of the total workforce, let’s start there. Table 1 shows that the year-over-year rate of decline in payroll employment of all women in federal government (–1.2%) was slower than the rate of decline in total employment (–2.4%) in that sector. This suggests that women aren’t losing jobs faster than men in the federal sector, but without additional information, we can’t rule out the idea that women’s federal losses are disproportionately falling on Black women.

The second-largest number of women’s job losses has been in manufacturing. As Table 1 shows, women are a smaller share of total employment in this industry compared with the federal government or professional and business services. However, unlike in the federal government, women have lost manufacturing jobs at a faster than average rate over the past year.

The largest number of women’s job losses has been in the professional and business services industry, which employs seven times more women than the federal government. As such, a higher rate of women’s job losses in this industry would be more likely to show up in declining EPOPs for Black women. Compared with the total year-over-year rate of job losses in the industry (–0.3%), women have lost jobs at a much faster pace (–1.3%).

As shown in Table 1, a closer look into the rate of employment decline in professional and business services shows that losses have been overwhelmingly concentrated in employment services—a decline of 3.2% between July 2024 and July 2025. Similarly, women’s losses within professional and business services were also skewed toward employment services.

Employment services accounts for roughly 15% of total employment within the professional and business services major industry. Women are nearly half (47.9%) of employment services workers and the most common occupation is human resource worker. This suggests the shedding of employment services jobs as a likely culprit behind large job losses among women in the industry. Again, additional information would be required to definitively conclude that those job losses are disproportionately falling on Black women. Well-documented patterns of occupational segregation often limit the representation of Black women in higher-level and higher-paying professional and management positions, resulting in overconcentration in service, administrative, and support occupations. Thus, it would not be a huge leap to assume that women’s job losses skewed toward employment services, over one of the subsectors beginning with “professional, scientific, and technical” or “management”, are probably having a negative impact on Black women’s employment.

Table 1

Daniel Navarrete
Division of Regulations, Legislation, and Wage and Hour Division,
U.S. Department of Labor
Room S-3502
200 Constitution Avenue NW
Washington, D.C. 20210

Comments on RIN 1235-AA51: Application of the Fair Labor Standards Act to Domestic Service.

Dear Mr. Navarrete:

The Economic Policy Institute (EPI) submits this comment to strongly oppose the Department of Labor’s Notice of Proposed Rulemaking Application of the Fair Labor Standards Act to Domestic Service. We strongly oppose stripping basic wage and hour protections, which should be the fundamental right of every worker, away from one of the most critical sectors of the U.S. workforce. We urge the Department of Labor (DOL) to instead support the agency’s proposed alternative that would preserve the existing regulations that provide for a minimum hourly wage (currently $7.25 at the federal level) and overtime protections for the millions of workers that provide care and services in the home.

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.

For years, EPI has conducted research on the low-wage workforce, including on domestic workers and the home care workforce specifically. EPI research and those from other trusted sources have repeatedly found that, despite the invaluable nature of their work, most home care workers face low pay, rarely receive benefits, and have less access to full-time work than other workers. Because they work in private homes, they are outside of public view and isolated from other workers, leaving them particularly vulnerable to exploitation.1

Overturning Fair Labor Standards Act (FLSA) protections for these workers would represent a massive blow to low-wage workers, and to women and people of color in particular, who are heavily overrepresented in this industry, as we discuss further below. Caregiving work can be meaningful and rewarding, but it is also often physically, mentally, and emotionally demanding work. Home care workers work with elders, people with disabilities, people recovering from illness or medical procedures, and assist with intimate day-to-day including administering medication, monitoring health vitals, bathing, preparing meals, providing transportation, and engaging in activities. This provides essential caregiving support to both clients and their families. As the U.S. population ages, and more and more people, both seniors and people with disabilities, prefer to receive care in their homes and integrated community settings rather than in institutional settings such as nursing homes or group homes, we should support, not undermine, the home care workforce as they help to meet these needs.

Many groups of domestic workers were originally excluded from the FLSA. This policy decision explicitly left domestic and agricultural workforces–which, at the time of enactment in the New-Deal era, were majority-Black–without the basic minimum wage and protections being extended to other workers. As the NPRM notes, Congress extended FLSA protections to some groups of domestic workers in 1974, including those who were employed directly by a member of a household to perform tasks. But the 1974 changes to the bill also established the vague and overused “companionship exemption.” Over time, employers have applied the companionship exemption far wider than its original intent. We argue that the companionship exemption was never meant to say that workers providing caregiving services for pay through third-party employers, such as through home health care staffing agencies, should not receive at least the minimum wage. The current NPRM seeks to rescind the Department’s 2013 home care regulation (2013 final rule) that narrowed this exemption. In these comments, we discuss how the Department’s economic impact analysis for this NPRM is incomplete, methodologically flawed, and internally inconsistent.

The Department’s NPRM contains inadequate economic analysis and understates the economic costs of this regulation that would be borne by home care workers.

The regulatory impact analysis (RIA) in the NPRM is fundamentally incomplete. It significantly understates the complexity and scope of impacts arising from this proposed rule. It (1) fails to quantify key transfers, (2) overlooks distributional harms, and (3) makes unsupported claims of benefits and downplays costs and transfers. This RIA cannot support informed decision-making or a rational comparison of regulatory alternatives.

Failure to quantify key impacts

The RIA is less than 5 pages long and provides no dollar impacts—no estimated regulatory familiarization costs; no estimated changes in hiring costs; no estimated transfers from workers to employers as a result of loss of minimum wage protections, overtime protections, or compensation for travel time; no estimated impacts of changes in the rate of turnover; no estimates of employment impacts; nothing. The analysis is entirely speculative. By contrast, the RIA in the 2013 final rule2—which this proposal would rescind—included all of these estimates and more. Omitting them here is a flagrant violation of the Administrative Procedures Act requirement to assess reasonably quantifiable impacts.

Overlooks distributional harms

The Department acknowledges that rescinding the 2013 rule will transfer income from workers to employers and consumers, yet it fails to provide even a range of those transfers, or to acknowledge the distributional harms that will result. These harms are not abstract: home care workers are among the lowest-paid workers in the U.S. economy, and shifting income away from them will directly harm them and increase inequality.

In 2022, EPI produced a chartbook with detailed information about the demographics, wages, benefits, and poverty rates of several domestic worker occupations, including home care workers.3 The chartbook uses the same definition of home care workers used in the Government Accountability Office (GAO) study cited by the Department in the NPRM.4 As detailed below, the demographic profile of home care workers is different from that of workers as a whole, with home care workers disproportionately likely to come from demographic groups—like women and people of color—that have lower average earnings due to the impact of broad structural biases on labor market outcomes. But the EPI chartbook shows that even after controlling for gender, nativity, race/ethnicity, educational attainment, age, marital status, and geography, agency-based home care workers have an hourly wage that is 25.6% less than other similar workers, and non-agency-based home care workers have an hourly wage that is 31.3% less than other similar workers. Annual earnings gaps are even larger—42.8% and 58.3%, respectively.

Home care workers are also much less likely to have workplace benefits than other similar workers: after applying the same set of controls listed above, agency-based home care workers are 17.1 percentage points less likely to have employer-provided health insurance and 14.1 percentage points less likely to have an employer-provided retirement plan than other similar workers. Similarly, non-agency-based home care workers are 24.9 percentage points less likely to have employer-provided health insurance and 20.6 percentage points less likely to have an employer-provided retirement plan.

Finally, home care workers are much more likely than similar workers to live below the poverty line or below twice the poverty line—the latter being what researchers often use as a measure of what it takes to make ends meet. Again after applying the same set of controls, agency-based home care workers are 7.0 percentage points more likely to live in poverty than other similar workers, and 19.9 percentage points more likely to live below twice the poverty line. Non-agency-based home care workers are 7.1 percentage points more likely to live in poverty than other similar workers, and 13.6 percentage points more likely to live below twice the poverty line.

Using the same definition of home care workers, we have done related calculations using updated data (pooled 2022-2024 data).5 We found that 85.0% of home care workers are women, 63.3% are people of color, 32.6% are immigrants, 85.7% do not have a college degree, 28.4% are custodial parents of at least one child under 18, and only 8.6% are represented by a union. The median home care worker earns $16.57 per hour, which is less than $35,000 per year for a full-time, full-year worker and on par with the 20^th percentile of the overall wage distribution.6 Taking away minimum wage and overtime protections from such a vulnerable group virtually guarantees a regressive transfer of income.

Unsupported claims of benefits and downplaying costs and transfers

The main benefit the Department cites for the recission of the 2013 rule is that, by lowering labor costs, it will expand access to health care services by encouraging more providers to enter or grow in the home care market. This claim is absurd, as it ignores the fact that there is a severe shortage of home care workers. This fact is very explicitly detailed elsewhere in the NPRM, which notes, for example, that “the supply of home care workers is failing to keep pace with the growing demand for home care services” and cites a 2023 industry report that “the workforce shortage in home-based care has reached crisis proportions,” with “home health care providers [reporting that they turn] away over 25% of referred patients due to staff shortages.”7

With providers already forced to reject patients because of too few workers, there is no meaningful room for expansion given the current supply of workers. Lowering wages will not expand labor supply. Virtually the only way to draw more workers into the profession is to improve these jobs. Stripping away protections that boost pay will make recruitment harder, not easier, and will worsen the problem of insufficient access to home care services. Interestingly, the NPRM does acknowledge that the rule could “lead to increased employee turnover and difficulty attracting skilled workers to the industry.”8 This admission directly contradicts the Department’s central claim that rescission will expand access to home care services, underscoring the internal inconsistency of the analysis.

It is worth noting that a worsening home care worker shortage does not mean, as the NPRM suggests, that the 2013 final rule failed to attract workers to the industry. The NPRM states:

And although the Department predicted in 2013 that ‘‘guarantee[ing] minimum wage and overtime compensation for home care jobs . . . will attract more workers to the home care industry,’’ growth in the home care workforce ‘‘slowed’’ in the years following the 2013 rule, with ‘‘the number of home care workers per100 [individuals receiving home and community-based services] declin[ing] by 11.6 percent between 2013 and 2019.

First, the number of home care workers per 100 individuals receiving home care is a deeply flawed measure to use as evidence that the 2013 rule didn’t attract workers. That ratio depends not only on workforce growth, but also on growth in the number of people needing care—a factor driven by external forces like demographic shifts, not by labor supply. In fact, the number of individuals receiving care grew by more than 25% between 2013 and 2019, according to the study the department cited.9 If instead that population had grown at roughly the same pace as the overall nonfarm payroll workforce—1.7% annually on average—the ratio would have meaningfully increased.

However, the report the Department cited in that passage does indeed show that the home care workforce grew more slowly from 2013–2019 than from 2008–2013.10 But it is crucial to recognize the vastly different macroeconomic conditions in those two periods. The first period, 2008–2013, consisted of the Great Recession and a very weak recovery—the unemployment rate reached 10% in 2009 and was still 7.4% on average in 2013. In that environment, workers often had little choice but to take whatever jobs they could get, including the low-paying home health care jobs that were available because demand for home health services was growing.

By contrast, the 2013–2019 period was marked by a steadily strengthening labor market, with the unemployment rate getting below 5% by 2016 and as low as 3.5% in 2019. In this context, workers were far less compelled to take whatever jobs they could find, no matter how low the pay—and, as described above, home health care jobs are among the lowest paid in the economy, even after the 2013 rule. It is therefore unsurprising that growth in home care employment would slow between these two periods. The fact that the Department took the slowdown in growth between two periods—periods that were very different on measures that had nothing to do with the rule—as evidence that the rule didn’t draw people into the profession is an egregious error in economic reasoning.

The Department further claims that “workers who are employed by multiple home care agencies…may be able to consolidate their employment with one agency, thus yielding a convenience-related benefit.” This would apply to at most a very small fraction of home care workers: we find that just 7.4% of home care workers have more than one job. It is also worth noting that the GAO report cited by the Department in the NPRM finds no evidence that the share of home care workers with multiple jobs increased following the rule.11

It is also important to note that the fact that the federal minimum wage is currently set at a historically low level does not imply that rescinding minimum wage protections for home care workers would have little practical effect, as the NPRM suggests. First, workers who become exempt from FLSA coverage as a result of this rescission may be at risk of losing coverage under higher state and local minimum wage laws in any states/localities that don’t have their own home care worker coverage. But perhaps more importantly, although the federal minimum wage has been allowed to erode in real terms, it should not be assumed that this will persist indefinitely. Over time, it is reasonable to expect that the federal minimum wage will be increased, in which case exempting home care workers would prevent them from sharing in those future improvements.

Evidence confirms that, unsurprisingly, minimum wage increases do indeed raise the wages of home care workers. For example, a 2022 study published in the journal Home Health Care Management & Practice found that home health aides’ hourly wages were $1.00 higher in states that increased their minimum wages from below $8 to above $10.12

The Department also discusses that the benefits of the rule will include decreased regulatory compliance burden on home care providers. However, the Department does not provide any meaningful evidence for this assertion. And as the National Domestic Workers’ Alliance has noted, the record-keeping requirements of the FLSA–which include basic timesheets and information on hours worked that are already widely used by all covered employers in the U.S.–are not any more burdensome than compliance with other regulations, such as tax law. Recordkeeping for both employers and for state agencies are critical in public transparency–particularly since so many agencies receive public funds through Medicaid in order to operate.

Finally, the Department’s assumptions that the recission will have limited negative effects relies heavily on the 2020 GAO study mentioned above which concluded that the 2013 final rule was not associated with higher hourly or weekly pay for home care workers relative to other occupations with similar entry requirements. However, the Department ignores more recent research by an Associate Professor at Rutgers University that uses narrower comparison groups that are more similar to the home care workers impacted by the rule and finds that the 2013 rule was indeed associated with higher hourly pay and higher weekly earnings among agency-based home care workers.13

In sum, the Department’s economic impact analysis is incomplete, methodologically flawed, and internally inconsistent. It omits quantifiable impacts that were standard in the 2013 rulemaking, disregards the regressive distributional consequences for a disproportionately vulnerable workforce, and relies on selective evidence. By overstating potential benefits and minimizing costs and transfers, the NPRM fails to provide a sound analytical basis for rescission.

DOL should withdraw this rule and instead focus on strengthening protections and enforcing existing labor rights for home care workers.

Home care occupations are projected to grow at a much faster pace than the rest of the workforce. Home care workers are critical to supporting families and households across the country. To draw workers into this vital industry, it is crucial home care jobs become good jobs that pay family-sustaining wages and that provide dignified protections and working conditions to workers.

For far too long before DOL’s final rule went into effect in 2015, the home care industry was reliant on an exploitative labor model dependent on paying low wages. Taking away basic protections for these workers is a loss for the workers themselves, who will find their pay and benefits slashed even further, and will harm patients and clients who need caregiving services and struggle navigating an industry that has long faced challenges with worker turnover and retention. The home care industry has already adjusted to providing these basic protections, as the rule has been in full effect for a decade. Revoking these protections is legally unwarranted, economically damaging, and unjust. We urge the agency to withdraw the rule as proposed.

Sincerely,

Heidi Shierholz, Ph.D.
Executive Director
Economic Policy Institute

Samantha Sanders
Director of Government Affairs & Advocacy
Economic Policy Institute

1. Laura Dresser, Valuing Care by Valuing Care Workers: The Big Cost of a Worthy Standard and Some Steps Toward It, Roosevelt Institute, October 2015.

2. 78 Fed. Reg. 60497.

3. Asha Banerjee, Katherine deCourcy, Kyle K. Moore, and Julia Wolfe, Domestic Workers Chartbook 2022, Economic Policy Institute, November 2022.

4. Government Accountability Office (GAO), Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 2020.

5. Economic Policy Institute, Current Population Survey Extracts, Version 2025.8.8, https://microdata.epi.org. (Pooled 2022-2024 data).

6. The average of the overall 20^th percentile wage from 2022-2024 is $16.37. Economic Policy Institute, “Hourly wage percentiles – Real hourly wage (2024$),” State of Working America Data Library, 2025.

7. 90 Fed. Reg 28981.

8. 90 Fed. Reg 28982.

9. Amanda R. Kreider and Rachel M. Werner, “The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services”, Health Affairs no.5, April 2023. https://doi.org/10.1377/hlthaff.2022.01351.

10. Amanda R. Kreider and Rachel M. Werner, “The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services”, Health Affairs no.5, April 2023. https://doi.org/10.1377/hlthaff.2022.01351.

11. Government Accountability Office (GAO), Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 2020.

12. Di Yan, Helena Temkin-Greener, Ronni Pavan, Hao Yu, and Shubing Cai, “Did Minimum Wage Policy Changes Impact Home Health Workforce?”, Home Health Care Management and Practice no.25, pp. 206-212, December 2022. https://doi.org/10.1177/10848223221140502.

13. Joy Jeounghee Kim, “Extending the FLSA Protection to Home Care Workers: Effects on Workers’ Labor Market Outcomes,” Rutgers University, 2021. https://doi.org/10.7282/00000139.