Workers keep leaving the US labor force. Experts can't agree why

Whether it was caregiving responsibilities, feeling discouraged after a long stretch of unemployment or the realization they're sitting on a pile of money, many Americans have left the workforce entirely.

Over the past year, about 1 million workers have thrown in the towel. In June alone, 720,000 people left the workforce, the Labor Department estimated. The labor force participation rate, or the percentage of those 16 and older who are working or looking for work, fell to 61.5% in June, marking the lowest reading since March 2021. Excluding the lows seen during the COVID-19 pandemic, it represents the lowest rate in five decades.

Experts are split on what is driving the departures.

Some older employees who have benefited from a booming stock market may be retiring feeling comfortable with their 401(k)s, though that doesn't explain why the participation rate for people ages 25 to 55 has fallen. A Catalyst survey earlier this year found that some women left the workforce when companies imposed return-to-office mandates and they needed to care for kids at home, but that doesn't explain why the participation rate for men has also dropped.

What is clear is that a sustained decline in the workforce could slow U.S. economic growth.

"Economic growth is a combination of the economy generating more for each hour that workers are at the job and more workers working more hours," said Bill Adams, Comerica Bank's chief U.S. economist. "The first half of that – productivity – is still growing at a good pace in the U.S., but the second half – bringing more workers into the economy – is not contributing as much to growth as it has in the past."

What a shrinking workforce means for unemployment

The unemployment rate ticked down from 4.3% to 4.2% in June. That could be considered a bright spot in a jobs report that fell short of forecasters' hiring expectations. But in a note after the report's release, Glassdoor chief economist Daniel Zhao said it fell for "the wrong reasons."

Although U.S. employers' hiring has accelerated over the past several months, Zhao said, the unemployment rate is falling not because more people are getting hired but because fewer are looking for work.

"This points to a labor market that's stubbornly refusing to reaccelerate, despite recent optimism," Zhao said in the note.

Some workers are burned out from the job search

After a year of historically weak hiring in 2025, ZipRecruiter economist Nicole Bechaud told USA TODAY that longtime unemployed people may be so discouraged they are leaving the market entirely.

"Somebody who became unemployed a year ago, when it was really, really hard to find a job, is likely still unemployed right now," Bachaud said, adding employers may prefer to hire "somebody who just recently left their job, or who's still working another job."

Michele Evermore, a senior fellow at the National Employment Law Project, agreed. She said that rejection stings after several rounds of interviews and that landing a job has become "a real headache" in 2026.

"That's worth thinking about when you see people demoralized and not wanting to work," she said, adding people may also be taking time this year to acquire new skills, learn a trade or return to school as they feel employers' expectations shifting amid the growth of artificial intelligence.

Some employees reject return-to-office mandates

Jasmine Tucker, vice president of research at the National Women's Law Center, said return-to-office mandates amid high caregiving costs disproportionately drove women to leave the labor force.

"If a family is trying to make ends meet and one person has to leave the labor force because they can't pay for care ... it's going to be the person who makes less, and that tends to be the women because of the wage gap," Tucker said.

Evermore added that return-to-office mandates may have made it harder for employees with disabilities to keep their jobs, another possible contributor to a shrinking labor force.

"There are plenty of jobs that you could probably continue to do from home, [but] employers are taking this sort of hard-line stance in some cases," Evermore said.

For some people, it was time to go

The participation rate for employees 55 and older fell to 37.1% in June, marking a 21-year low.

"On top of retirement, the stock market has boomed in 2026, and so a lot of older Americans who have 401(k)s and other retirement savings are feeling better able to step away from the workforce," Adams said.

Evermore added that even if older employees aren't sitting on a comfortable retirement fund, after decades in the labor force their health sometimes lets them know when it's time to go.

"A lot more people think that the decision to retire is going to be totally up to them, and oftentimes it's up to their bodies," Evermore said.

Though a wave of retirements is expected given the country's aging population, Adams said that in the long run, "the U.S. is going to have to figure out how to manage shortages of workers that are being affected by these demographic changes."

Reach Rachel Barber at rbarber@usatoday.com, follow her on X @rachelbarber_, and subscribe to her newsletter "Making More of Your Money" here.

This article originally appeared on USA TODAY: Workers keep leaving the US labor force. Experts can't agree why

Reporting by Rachel Barber, USA TODAY / USA TODAY

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This story was originally published July 9, 2026 at 7:46 AM.