Is more people returning labour force good news?

The US Federal Reserve sees more American people returning to workforce and the reason the Fed gives is that the strength of the US economy encourages more people to join the active labour force in order to gain more incomes. However, the reason may not be that straightforward.

Marginal return from incomes is changing over incomes. For a person to join, especially rejoin the labour market, a good potential income level is necessary for the inactive labours to re-become active labours to compensate what they lose for joining the labour market. Under such circumstance, the economy has to good to encourage more people to join the labour market. On the other hand, this is not the only case for people rejoining the labour market, there could be other reasons. When people can no longer afford their lifestyles, they will be forced out to rejoin the labour market; under such circumstance, it signals that the US economy is not doing very well and the US good economic performance might ignore some groups of people in the US.

Therefore, seeing participation rate increasing and good economic data does not mean more people want to grab their chances and earn their fortunes from the bull market, it could be caused by unfair distribution of the wealth in the society that when some people in the society get much less and costs of living increase, they have to go out for work.