David Andolfatto draws some useful comparisons between Canada, 1990-1999, and the U.S., post-2008. As he points out, Canada experienced a decade-long slump in the 90s which featured a depressed participation rate and employment/population ratio. It's useful, I think, to show how this experience was different from what we're seeing now in the U.S.
First, suppose we look at the paths of the unemployment rate in Canada, 1990-1999, and the U.S. from the beginning of 2008 to the present:
Next, let's look at the unemployment rate and the participation rate in Canada, 1990-1999 (deviations from the mean in the sample, to highlight what is going on):
Now the U.S., post-2008,
So, if you think the 1990-1999 period in Canada tells us that the labor force participation rate in the U.S. is on the way up, you should be more skeptical. But labor force behavior in other countries, including Canada, is illuminating concerning what is going on in the U.S. right now. Canada has had similiar real GDP growth to the U.S. since the last recession, and has similar demographics, but its participation rate did not fall like the U.S. participation rate did recently, as David shows. So what's causing the U.S. participation rate to fall? I don't think it's anything to do with wages. Here's the times series, since 2007, of average labor productivity and real wages.
Another interesting feature of the data is what is going on with the long-term unemployed. Here's the number unemployed 27 weeks and more as a percentage of the labor force: