Mulvaney confirms labor shortages

When acting White House chief of staff Mike Mulvaney said in London on February 19th that America was running out of workers and needed more immigrant workers, he was confirming both the existence of current labor shortages (also found in European countries) and our long term dependence on immigrants to supply a large share of workforce growth.

Long term trends

Male immigrants made up nearly 80 percent of the increase in the nation’s male civilian labor force between 1990 and 2001 while female immigrants contributed 30 percent of the growth in the female labor force over the same time period.

The growth of the workforce continues to depend heavily on Hispanic and Asian workers. The size of the white non-Hispanic labor force will absolutely decline from 2004 to 2024 by 4%.

After 2015 and through 2035, the native-born working age population will decline by 8.1 million, the first generation immigrant workforce will increase by 4.7 million, and the second generation immigrant workforce will increase by 13.6 million.

the state of the current labor shortages

One way to look at the issue is to compare unemployment numbers to job opening numbers. In January 2000. In January 2001 there were 1.1 unemployed persons for every job opening. During the Great Recession that rose to as high as 6.4 in July 2009. Since March 2019 it has been under 1 – fewer unemployed than job openings (in December 2019, 0.9).

Another way to look at this is the labor force participation rate. This rate has over decades been declining for various reasons. But for the 25 to 54 year old set, it has remained fairly stable for 20 years – at 84 in 2000, 81 in 2015 and back up to 83 in January 2000. Most of the gain in the workforce in the past 20 years has been for persons over 55 and that rise leveled off in about 2010.

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