The “NILF” Phenomenon and its Role in Social Security’s Future
The 2026 Social Security Trustees Report singled out declining fertility rates as one of the key reasons for a year-over-year deterioration of the program’s long-term financial picture. In the report’s “Notable Changes Since Last Year’s Report” section, the Trustees offered this comment: “The ultimate total fertility rate is 1.75 children per woman for this report. This rate is lower than the rate of 1.90 children per woman used in last year’s report.” Since the fertility rate is the key factor in a society’s long-term ability to keep its population size stable without dependence on immigration, and since the statistical norm for fertility rates to accomplish this is 2.1, this gap–which, by the way, is viewed by some economists as overly optimistic–leads to a pessimistic view on Social Security’s future revenue stream. Shrinking population means shrinking workforce, which simply equates to lower tax revenue to support a growing number of benefitiaries as our population ages.
But beyond the fertility issue, there’s another, perhaps more obscure demographic emerging…the “NILF” factor: the not-in-labor-force measurement of the U.S. workforce. As noted in a recent article by The New York Post’ Anthony Blair, “The number of adults who are “not in the labor force” (NILF) surged to an all-time high in June to 105.8 million.” His article, which you can read in full here, draws on related commentary from American Enterprise Institute scholar Nicholas Eberstadt, author of the insightful piece titled “Can a Depopulating America Still Flourish Economically?”
These articles reinforce the gloomy future workforce projections suggested by the most recent Social Security Trustees Report.