The title of this column is one of the most popular titles for magazine columns and economic reports since Covid hit in 2020. Everywhere you go these days you see “Help Wanted” and “Now Hiring” signs seeking servers, mechanics, counter help, cashiers, bus drivers, ed techs, you name it.
So where did all the workers go?
Well, economists have been trying to answer that question since well before Covid. Back in 2017, the Brookings Institution concluded that 43 percent of the observed decline in male labor force participation was due to opioid addiction. I’m not buying that.
The labor force participation rate in this country peaked in 2000 at 67.1 percent (that’s the percentage of the population either working or looking for work.) Currently, the LFP rate is around 60 percent. The rate of participation by women in the workforce has remained pretty constant at 58 percent, but the rate of male participation has dropped from 76 to 70 percent in the past 20 years. But then men are responsible for most of the world’s problems.
Covid-19, of course, was responsible for the sudden loss of 20 to 30 million jobs in 2020. Two years later, only about two to three million of those workers are still missing in action.
Conservative think tanks and the U.S. Chamber of Commerce tend to blame enhanced unemployment benefits for creating a disincentive for Americans to go back to work. But conservatives have been making that argument for decades. They see what they want to see. The enhanced benefits ended a year ago, so I’m not buying the welfare argument any more than I’m buying the old opioid argument.
There are numerous reports that the effects of Long Covid, lingering after-effects of infection, is partly responsible for America’s labor shortage, but I tend to think the answer to where all the workers have gone is even simpler and less insidious than that. I think the elderly and immigrants are the missing workers.
“As of March 2022,” writes Didem Tüzemen, senior economist at the Federal Reserve Bank of Kansas City, “the U.S. labor force participation rate remained one percentage point below its pre-pandemic level. After accounting for the effects of slower population growth and the aging of the population in the past two years, I estimate that around 2 million workers are missing from the labor force. Individuals age 65 and older, whose participation rates remain persistently below pre-pandemic levels, constitute most of the missing labor force.”
Covid hit and folks who could afford to simply retired in large numbers. Individuals 65 and older constitute 66 percent of the missing workforce. America’s anti-immigrant policies did the rest.
“By one calculation,” reported CBS News last April, “the U.S. workforce today has 2 million fewer immigrants than it would have if immigration had continued at pre-pandemic levels. That gap is especially being felt in low-paying industries, such as leisure and hospitality, food services retail and health care.”
Yep, sounds like Maine to me.
My pet theory is that this elder-immigrant workforce drain is also aggravated by what Americans learned about work during the worst of the pandemic. If you don’t have to pay for child care and transportation, eating out and dressing up, you can live on a lot less. When people realized they were toiling away just to pay for babysitters and the getting to work, they stopped working. Maybe they joined the gig economy. Maybe they retired. Or maybe they just figured out how to live on one income.
Edgar Allen Beem has been writing The Universal Notebook weekly since 2003, first for The Forecaster and now for the Phoenix. He also writes the Art Seen feature.