A Forever Tight Labor Market? What???

When we share our book title, we often get a quizzical look, followed by a “but aren’t college graduates having a hard time getting jobs?” Well yes, sort of, even though college graduate hiring has been picking up lately (77% of college graduates report getting hired within 3 months of graduation, up from 63% in 2024). And many industries that rely on workers with less than a college degree, and immigrants, are struggling to find and keep talent.

In any case, our book’s premise looks more closely at the long-term supply of labor, rather than the short-term demand for labor. And recent labor market data suggests that one of the three causes of a “forever tight labor market”, labor force attachment (the other two are birthrates and immigration) continues to worsen.

According to U.S. Labor Department data released in early May, one in three men, 16 and older were not working or looking for work, the definition of labor force attachment. The 67 percent rate of male labor force participation is the lowest it’s been (except for COVID) in several decades. Just twenty years ago, the rate was 73.5 percent.

Much of this decline is fueled by the retirement of older men, but the biggest decline is among younger men, many of whom are in school, but many others of whom suffer from mental health, drug use, and incarceration. And workforce participation of men 20-24 is expected to decline further by nearly 5 percent over the next decade.

While female labor force participation has substantially rebounded since COVID, the overall labor force participation rate declined from February 2026 to March to 61.9 percent, the lowest level since November 2021. And the U.S. Bureau of Labor Statistics projects an overall decline in the labor force participation rate to 61.1 percent by 2034.

When you combine continued declines in labor force participation with continued declining birth rates, and zero immigration, you’ve got a “forever tight labor market”. The moment hiring picks up, which it will, employers will struggle to find and keep talent. Sowhy not start doing something about it now?