The deterioration in the US labour market over the past 20 years

A comparison of employment rates and participation rates (the proportion of the working-age population in the labour market) between the United States and the euro zone reveals a clear deterioration in the US labour market over the past 20 years, with declines in both employment and participation. Contrary to popular belief, the labour market today is less conducive to employment in the United States than in the euro zone. What may account for this deterioration in the US labour market? At first sight, possible causes include: Americans’ employability and skills; Deindustrialisation and manufacturing job losses; Labour costs; Declining geographical mobility. It seems that the decline in the employment rate and in the participation rate in the United States is primarily due to: Deindustrialisation, Declining geographical mobility. The reason is that income distribution has become highly skewed against employees in the United States, and employability is low, but no more so than in Europe.