In fact, most of the increase in the labor force participation rate has been due to the rapid rise in the participation of women, many of whom have young children. Additionally, the new welfare reform law has added many former welfare recipients to the American workforce. Women who head families have experienced recent employment growth of almost five percent. The very strong pace of job growth, even with rising participation rates, has produced record-low unemployment. Tight labor markets present new labor force entrants with employment opportunities, and encourage employers to offer jobs to relatively low-skill workers.
Employment gives workers with little education or experience an opportunity to cultivate new skills.
Finally, despite low unemployment, there has been little evidence of significant inflationary pressure. Some commentators speculate that the increased number of labor force participants coupled with strong productivity gains have mitigated a rise in prices. Unfortunately, those with little education or weak labor force attachment still face difficulties even in today's positive economic environment.