I recognize that it is easy for me, as a central banker, to say that we need to confront our own protectionism. But this is a political problem that we in Canada and the United States have to solve.
As an accounting matter, the drop in the participation rate since 2008 can be attributed to increases in four factors: retirement, disability, school enrollment, and other reasons, including worker discouragement.8 Of these, greater worker discouragement is most directly the result of a weak labor market, so we could reasonably expect further increases in labor demand to pull a sizable share of discouraged workers back into the workforce.