There are precedents for a lower workforce. It was not so long ago that women did not participate much in formal labor, but rather spent their creative energies improving their families and homes. That might not be an empowering choice today, and I'm not advocating for it, but it shows that the economy has in the past and probably still can get along perfectly well with a lot of sidelined labor capacity. The important thing is that the sidelined labor find some useful purpose outside the workplace rather than simply consuming welfare: in the past, domestic work like childrearing and social/emotional work like building community soaked up excess labor capacity and still had pro-social effects.