![]() ![]() To further boost labor force participation, CED recommends the following actions which focus on recruiting, educating, preparing, and retraining the American workforce. Leaders in business, education, and public policy need to collaborate to address the challenges of the tight labor market through initiatives focused on increasing Americans’ participation in the workforce. Increase and support American workers’ participation.Consequently, there is an increased need for action to counter the impact of the pandemic and rebuild the US labor force to boost future growth prospects with two steps: increasing American workers’ participation and reforming immigration. The pandemic has exacerbated the long-term demographic changes which portend that a tight labor force is the new normal. ![]() RECOMMENDATIONS FOR REBUILDING THE US LABOR FORCE This Solutions Brief proposes two broad actions: 1) get Americans into the labor force and support all workers by providing training to develop the skills they need to prosper and 2) take advantage of global talent by reforming US immigration policy to increase legal immigration, decrease the flow of illegal migration, and reform, most immediately, the H-1B visa program. It will offer solutions for business leaders and policy makers who must prioritize increasing US labor force participation and ensure a pipeline of workers with the skills employers need so the economy can grow. This Solutions Brief will look at how the pandemic has converged with demographic trends to disrupt the labor market. In the wake of the pandemic, fewer Americans are receiving bachelor’s degrees or any education after high school, reducing the pipeline of skills entering the labor market in the future. Two years in, as businesses attempt to resume normal operations and Americans adjust to life during a pandemic, labor force participation rates for almost all demographic groups are below prepandemic rates. While labor force participation data as of March 2022 show that workers are returning to the labor force, employers are still unable to fill available jobs and another wave of new COVID-19 cases could threaten further improvements. The pandemic’s impact has further constricted the labor supply. ![]() Several long-term demographic trends contributed to a tight labor supply even before the pandemic, including meager growth in the number of working-age Americans, the shrinking number of working-age adults without college degrees, and historically low US birth rates, projected to continue beyond 2040. 2 Average hourly wages for private sector workers grew at an average annual rate of 3.3 percent in 2019, the fastest rate on record since the annual rate was first reported in 2008. Job openings were averaging over 7 million while the number of unemployed individuals totaled less than 6 million. 1 But the rate which captures those who are eligible to work but have not been employed for over 18 months is just above 7 percent and is concentrated in particularly vulnerable segments of the US population. The unemployment rate was at or below 4 percent for the previous 24 months. Before the pandemic took hold in the United States in March 2020, the US labor force was already showing signs of being stretched. Demographic and market trends exacerbated by COVID-19’s impact on the workforce are converging to worsen labor shortages, presenting important challenges for business and public policy leaders as the nation strives to revitalize its economy and compete in the postpandemic era. ![]()
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