> How do weak labor force participation rates indicate an oversupply in labor?
It means people either can't find work, or the work available is so unattractive that it is preferable not to work. In a tight labor market employers will offer better pay, flexibility, hire less desirable workers, etc.
OECD stats linked below, for ages 24-64 it's under 80% for OECD countries on average. And that includes part-time and underemployed workers.
https://data.oecd.org/emp/labour-force-participation-rate.ht...