The Dallas Express, September 13, 2003
Media outlets, including the Houston Chronicle as well as business groups and politicians like Representative Tony Gonzales (D-Texas) all agree with the Dallas Morning News that the state’s low unemployment means “Texas needs to advocate for more foreign workers.” But this 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. In Texas, the number increased from 2.5 million in 2000 to 3.8 million in 2023. 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 Texas, the labor force participation rate for these less-educated U.S.-born men (16 to 64) declined dramatically from 88 percent in 1960, to 80 percent in 2000, to 75 percent in 2019 (before Covid), to 73 percent in April of 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 percent in 1960 to just 87 percent this year.
Among U.S.-born women overall in Texas, participation increased dramatically after 1960, peaking in 2000 with relatively little change since. However, among less-educated U.S.-born women (16 to 64), the rate declined significantly from 69 percent in 2000 to only 63 percent in 2023.
At 90 percent, the share of working-age immigrant men in the labor force in Texas is higher than the U.S.-born and has changed little in recent decades. The rate for immigrant women is somewhat lower than their U.S.-born counterparts, but has slowly and steadily increased for decades.
The decades-long decline 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.
There is no debate that the falloff 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 Texas, immigrants are 26 percent of the non-college labor force, compared to 4 percent in 1960 and 17 percent in 2000. 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 the parade of opinion leaders in Texas demanding more immigrants rather than focusing on getting Americans back to work.
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.