Plumer writes,

while part of the story is clearly that the labor force is shrinking because the bad economy is driving workers out, another significant factor is that baby boomers are beginning to retire early — a trend that has worrying implications for future growth.

This squares with my intuition, which is that the decline in labor force participation has a large secular component, driven by the aging of the population. Unfortunately, this story runs into a little bit of difficulty when confronted by the facts. Thus, McBride wrote,

The participation rate for the ‘over 55’ age group has been rising since the mid ’90s (purple), although this has stalled out a little recently (perhaps cyclical).

…The participation rate is generally trending up for all older age groups. The ’65 to 69′ age group hit a new record high in March!

Follow the link to his post, which tells the story in graphs.