The slow rebound of LI's labor force is in part due to early retirements, expert says

Long Island’s labor force was smaller last month than it was in October of last year, despite gains over the last 21 months, state data show.

On a year-over-year basis, the Island’s labor force – the sum of all employed and unemployed Islanders actively job hunting – is down by more than 18,000 people, though the number of employed is up and the number of jobless who are actively seeking work is down.

"We did have an increase in the number of employed residents, an increase of 10,600," said Shital Patel, labor market analyst for the state Labor Department’s Hicksville office. "But more people dropped out of the labor market."

The labor force drop is more dramatic when looking back two years.

Since October 2019, 64,600 Islanders have lost their jobs, and 55,700 have stopped looking for work, Patel said.

Several factors are contributing to the Island’s anemic labor force recovery, she said, including child-care and elder-care concerns and a relatively old work force.

Patel said she suspects that a "major factor in the shrinking labor force is an increased number of retirements."

Over the past decade, "the region’s labor force has increased by about 2.5% and the growth has been almost entirely in workers aged 55 and over," Patel said. "In 2019, there were a record number of people over the age of 65 working on Long Island."

For many corporate employees, she said, "the decision to retire earlier than planned was helped by 401(k) accounts bolstered by record stock values along with a surge in home values."

But while many retirements were voluntary, she continued, "Many people with incomes at or below the national median were forced into early, unplanned retirements."

On a month-over-month basis, Long Island’s jobless rate fell slightly in October, with a lower percentage of unemployed residents than the state and nation, state data show.

The Island’s unemployment rate fell to 4.0% last month, a decrease of 0.2 percentage points from September, according to the state data released Tuesday. During the same month, the state reported a 6.0% unemployment rate while the nation overall recorded a 4.3% rate.

The jobless rates for Nassau and Suffolk were each down, and they mirrored each other at 4.0%.

"There’s been a short-term improvement relative to the previous month," said John Rizzo, chief economist for the Long Island Association business group. "But ultimately this is still a story about labor force participation."

While Rizzo said he agrees that factors like accessing childcare are contributing to the Island's weaker labor participation, he also credits issues such as workers "being more selective in the jobs they'll take," and the lingering effects of enhanced unemployment benefits, which came to a halt in early September.