A record number of Americans are now classified as being outside the labor force, with new federal data showing that 105.8 million adults were not working or seeking employment in June—a milestone that has prompted renewed concern among economists about a growing exodus from the workforce.

Figures released by the Federal Reserve Bank of St. Louis show that the number of Americans categorized as “not in the labor force” (NILF) climbed to an all-time high after approximately 832,000 people exited the workforce during June alone. The total now exceeds levels seen during both the Great Recession and the COVID-19 pandemic.

The NILF category includes all Americans age 16 and older who are neither employed nor actively looking for work, encompassing retirees, students, and others outside the labor market.

Nicholas Eberstadt, a leading labor economist and the Henry Wendt Chair in Political Economy at the American Enterprise Institute, said a closer examination of the data reveals a troubling trend, particularly among working-age men.

“We’ve got a big problem…with the flight from work of prime-age men. And what’s been carrying the overall prime-age labor force participation has been the strong involvement of women, not men,” said Eberstadt, who holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute.

Roughly 5.3 million Americans—about 5% of those outside the labor force—are no longer participating because they have become discouraged or have stopped searching for employment altogether.

Meanwhile, an estimated 23.3 million Americans, or approximately 22% of the NILF population, are receiving long-term illness, disability, or similar government benefits.

That share now exceeds the percentage of Americans over age 16 who are enrolled in full-time education, a group that accounts for roughly 16% to 18% of the NILF population, or just over 19 million people.

Retirees continue to make up the largest segment of those outside the labor force, accounting for roughly half of the total. Economists note that this reflects the continued retirement of the Baby Boomer generation.

Among retirees, about 45% left the workforce at the traditional retirement age of 65 or older, while an estimated 3% to 5% chose to retire earlier.

Although the raw number of Americans outside the workforce has reached a historic high, labor force participation also declined. In June, only 59% of Americans were either working or actively seeking employment—the lowest level since September 2021, when the nation was emerging from the pandemic.

Before that, labor force participation had not fallen to such a low level since the aftermath of the Great Recession.

Eberstadt said another growing concern involves healthy, working-age Americans who have voluntarily stepped away from employment and are making little or no effort to return.

“Very roughly speaking, there are about 7 million of these men who are out of the labor force for the 25-to 54-year-olds,” said Eberstadt, whose 2016 book, “Men Without Work,” discussed the phenomenon of American men in their prime leaving the workforce.

He emphasized that the trend is not limited to men.

“There are about 3.5 million women who are kind of like the doppelgangers to this,” he said.

“There’s a growing group of dropout women who are neither working nor looking for work, have no children under the same roof with them, and no husband present.”

While America’s aging population contributes to the increase in retirees, Eberstadt argued that demographics alone cannot explain the decline in workforce participation.

“If you look at what’s going on in Europe and Japan, which are both aging, shrinking societies, their workforce participation rates are going up now. So it’s not as if it’s impossible for aging, shrinking societies to mobilize more or involve more in the workforce,” he said.

“These are the healthiest, best educated Americans that have ever lived on the planet,” Eberstadt said.

He attributed much of the problem to what he described as a fragmented network of disability and assistance programs that make it difficult to track recipients and, in some cases, may discourage workforce participation.

“The extent and the sprawl of participation or dependence upon different disability programs is a blind spot,” he said. “There’s no office in Washington, DC, big as it is, that can tell you how many Americans are receiving benefits from which disability programs and how many in collectivity and how many are receiving from multiple disability programs.”

As artificial intelligence continues reshaping white-collar industries and fueling concerns about future job losses, some policymakers have proposed adopting a universal basic income (UBI), under which citizens would receive guaranteed payments regardless of employment status.

Eberstadt argued that such a policy would likely encourage even more Americans to leave the workforce.

“Disruptive technologies in the past have been really great for people who have had skills,” he said. “Their productivity and incomes have gone up a lot.

“They’ve also displaced a lot of labor for people who don’t have skills. It looks like we’re going to be on that same track with AI, wherever it goes in the next 18 months or 10 years,” Eberstadt said.

“When Henry Ford came down the road, I don’t think that anybody had any idea what a combustion engine was going to do in mass-produced cars,” he said.

“But I would not like to see a guaranteed income, a UBI. Because I look at how men who are neither working nor looking for work say that they are spending their days now. And it is very depressing to see what they say they are doing. And I wouldn’t like us to be buying more of that,” he said.

“They are not engaged in civil society, not helping out around the house, not getting out of the house. Spending 2,000 hours a year in front of a screen. That’s a great warm-up act for becoming a statistic in deaths of despair,” he said.