The Pantograph, October 24, 2023
Many business groups in Illinois, from landscapers to hotels, have called on the Biden administration to give out work permits to illegal immigrants in order to ease the state's tight labor market. Recently, Senator Durbin (D-IL) called for legalizing illegal immigrants and increasing immigration because the worker "shortage is hurting every community and every industry — from health care to hospitality."
But this argument for more immigrant labor ignores the massive decline in labor force participation: the share of working-age people working, or at least looking for work. Those not in the labor force do not show up as unemployed because they are not actively looking for work.
Nationally, 44 million U.S.-born working-age (16 to 64) men and women are not in the labor force — almost 10 million more than in 2000. The number is 1.6 million in Illinois. Again, this does not even include the officially unemployed. The falloff in labor force participation is contributing to profound social problems such as crime, drug addiction, social isolation, and depression.
Most of those not in the labor force lack a bachelor's degree. In Illinois, the labor force participation rate for these less-educated U.S.-born men (16 to 64) declined dramatically from 89% in 1960, to 82% in 2000, to just 71% in 2023. Focusing only on men of "prime-age" (25 to 54), who traditionally have the highest rates of work, still shows a decline for the non-college U.S.-born from 96% in 1960 to only 82% this year.
Among U.S.-born women (16 to 64) without a bachelor's, the rate increased dramatically from the 1960s to the 1990s as women joined the labor force in huge numbers. But in Illinois, since 2000 the rate has declined dramatically -- from 72% in 2000 to 60% in 2023.
At 83%, the rate of working-age immigrant men without a bachelor's in Illinois in the labor force is higher than for their U.S.-born counterparts. But it has also declined from 92% back in 1960. However, much of the decline has occurred since COVID. The rate for less-educated immigrant women is very similar to U.S.-born women in 2023 and has not changed much in recent decades.
The decades-long decline, before Covid, in labor force participation among the U.S.-born has a variety of potential explanations. Some researchers believe globalization and automation have weakened demand for less-educated labor and caused a long-term decline in wages, making work less attractive. Others point to overly generous welfare and disability programs that undermine work.
Another school of thought holds that changing expectations about men as providers, including the decline in marriage, has caused them to value work less. There is also evidence that substance abuse, obesity, and criminal records can be causes and effects of the decline in work.
While the causes are debated, there's no question that the decline in work contributes to a host of serious social problems. Dropping out of the labor force significantly increases the risk of poverty and welfare dependency. It hinders economic growth and creates a fiscal burden. It is also linked to the rise in "deaths of despair" -- suicide, drug overdose, and alcohol poisoning. It increases social isolation, reduces political participation, and harms family formation.
Fixing this problem requires reforming our welfare and disability programs so that returning to work is emphasized whenever possible. Combating substance abuse and the mental health crisis by expanding treatment options is clearly necessary. Re-examining our approach to globalization, including the off-shoring of good-paying factory jobs, should also be considered.
Real wages for the less-educated have declined or stagnated for decades. Allowing wages to rise must be a key part of the solution. One way to do so would be to reduce immigration. In Illinois, immigrants are 20% of the non-college labor force -- more than double what it was in 1960. This impacts wages, but, perhaps even more importantly, it has allowed policymakers to ignore the huge deterioration in labor force participation. Exhibit A in this regard is all the businesses and politicians in Illinois demanding access to more immigrant labor, rather than focusing on getting Americans out of the labor force back into jobs.
We face a clear choice: either we address the decline in labor force participation, or we continue to allow in ever more immigrants to fill jobs and then somehow deal with all the social pathologies that come from so many working-age people not working.