(From Courrier-Journal.com) -- Nika Stewart’s small business has what sounds like a problem: “I have people on the payroll that I rarely see in person,” she says. But she knows her employees work hard. Her Freehold, N.J.-based social media management company, Ghost Tweeting, has gone from zero to about 75 clients in less than two years.

She doesn’t see her team members because “almost everyone who works for us is a mom,” and telecommuting, with flexible hours, is what makes work possible for them. Because she’s fine with the concept, she gets great talent at a good price.

It’s an intriguing idea, and one that more people concerned about America’s economic future should keep in mind. While most people focus on the unemployment rate -- which remained at 7.8 percent in December -- the more interesting trend is in labor force participation. The percentage of people older than 16 working or looking for work has been declining for the past 12 years. Many economists blame demographics. Baby Boomers are retiring. Women’s participation has plateaued. There are reasons for both trends, but also implications: When fewer people work, this hurts long-term growth, nudging us closer to 2 percent annual increases vs. the 3 percent we’ve long enjoyed.

A shrinking labor force, though, is less inevitable than it seems. Changes in how people work could slow, or even reverse the shrinking, if we choose to embrace them.

Since the middle of the 20th century, workforce participation has fluctuated. In October 1950, 59.4 percent of Americans over age 16 were working or looking for work. In October 1970, 60.4 percent were. Then, over the next three decades, the bulge of the Baby Boom poured into the workforce. The rate rose to 67.3 percent by early 2000.

The decline in participation since then -- to 63.6 percent last December -- means the U.S. economy has given up roughly half the gains since the 1960s. Some of the decline is due to the lousy job market. But in a March report, Barclays economists noted that two-thirds of those who’ve left the workforce say they do not want a job. They are often north of 55 and call themselves retired. Some are not the family’s primary breadwinners (participation among mothers with kids younger than 6 fell from 65.3 percent in 2000 to 63.6 percent in 2008).

Read more.