The U.S. economy has stopped creating jobs. The labor force is shrinking. And the one thing that was actually working — women entering the workforce at historic rates — is being treated as an accident rather than a blueprint.
In this episode of The Tradeoff, Mattie Duppler unpacks what Federal Reserve Chair Jay Powell meant by \"zero employment growth equilibrium\" — an economy where net job creation is zero because the labor force has stopped growing. Lower immigration, a declining birth rate, and a working-age population that is shrinking while federal spending on retirees keeps climbing.
Mattie makes the case that the productivity gains keeping GDP afloat trace directly to women, and specifically mothers, who entered the workforce at unprecedented rates during the pandemic. She connects federal childcare spending ($12 billion) to the Defense Department budget ($893 billion and counting), argues for tax incentives around caregiving, and draws a direct comparison to Japan — a country that has lived in this equilibrium for 30 years and dropped from the world's second largest economy to 22nd in GDP per capita.
This isn't a Fed recap. It's the case that investing in working parents is the most important economic question of our generation — and nobody in Washington is treating it like the emergency it is.
Topics: women in the workforce, working mothers, childcare policy, birth rate, labor force participation, productivity, federal spending on children, child tax credit, remote work, Japan demographic decline, zero employment growth equilibrium, Federal Reserve March 2026.
Show Notes:
San Francisco Fed — \"What's Driving Labor Force Participation Among Women?\" (2025) https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/02/whats-driving-labor-force-participation-among-women/
Chicago Fed — \"Female Labor Force Participation in the Post-Pandemic Era\" (2024) https://www.chicagofed.org/publications/chicago-fed-insights/2024/female-labor-force-participation
Brookings — \"Prime-Age Women Are Still Driving the Labor Market Recovery\" (2024) https://www.brookings.edu/articles/prime-age-women-are-still-driving-the-labor-market-recovery/
Brookings / Hamilton Project — \"Seven Economic Facts About Prime-Age Labor Force Participation\" (2025) https://www.hamiltonproject.org/publication/economic-fact/seven-economic-facts-about-prime-age-labor-force-participation/
BLS — \"Women in the Labor Force, 2023\" https://www.bls.gov/opub/reports/womens-databook/2023/
Peterson Foundation — \"How Much Government Spending Goes to Children?\" (2025) https://www.pgpf.org/article/how-much-government-spending-goes-to-children/
First Five Years Fund — \"Funding for Key Early Learning Programs, FY2026\" https://www.ffyf.org/resources/2026/01/funding-for-key-early-learning-programs-fy2026/
OECD — Employment Outlook 2025: Japan https://www.oecd.org/en/publications/2025/07/oecd-employment-outlook-2025-country-notes_5f33b4c5/japan_fa8fbc74.html
The Diplomat — \"Japan's Grim Demographic Reality\" (2025) https://thediplomat.com/2025/12/japans-grim-demographic-reality/
IMF — \"Shrinkanomics: Policy Lessons from Japan on Aging\" https://www.imf.org/en/publications/fandd/issues/2020/03/shrinkanomics-policy-lessons-from-japan-on-population-aging-schneider
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