The Center for Immigration Studies asserts that the decline in labor force participation in the U.S. is in part a result of foreign-born labor, particularly at the lower part of the job market with respect to formal education.
CIS Executive Director Camarota says that “Using large-scale illegal immigration to fill jobs may please employers, but it allows policymakers to ignore the decades-long decline in labor force participation that contributes to profound social problems, from crime and drug overdoses, to welfare dependency and suicide.”
Here is a summary of the participation rate experiences of the U.S. and six other advanced countries. Some countries have aggressive pro-immigrant policies, such as Canada and Germany. One in particular, Japan, has a very small foreign-born workforce.
United States: Peaked at around 67% prior to the 2008 recession. As of 2021 it was around 62%, with declines driven by aging and health/disability reasons.
Canada: Labor force participation rate declined from around 67% in 2011 to around 65% in 2021. The drop is largely attributed to aging demographics.
Japan: Labor force participation has declined steadily from over 70% in the 1990s to under 63% in 2021. Japan has the oldest population which is a major factor.
Germany: Dropped from over 70% in the 1990s to under 68% in 2021. Driven by aging population, lower participation among women, and expanded welfare.
Italy: Fell from around 57% pre-2000 to under 56% in 2021. Aging population and poor economic growth play key roles.
France: Decreased from about 65% in 2003 to 64% in 2021. Aging demographics, unemployment, and increased school enrollment are contributors.
United Kingdom: Remained relatively steady around 63-64% over the past two decades. Less affected by aging than other European countries.
The labor force participation rate of Americans without a high school degree has been declining for 50 years, and I expect in all regions of the country, even those with small foreign-born workforces with little formal education. This does not mean that foreign workers have not taken over jobs which U.S. born workers had done in the past – an example being meat processing plants. But it does mean that one has to look at the nuances of work, by industry and by region, to make sense of how foreign and U.S. born workforces interact.
The labor force participation rate for Americans without a high school degree: In the 1950s and 1960s, the labor force participation rate for this group was around 60-65%. It started declining in the 1970s and fell to around 55% by the 1980s. The decline accelerated in the 1990s, with the rate falling to around 45% by 2000. In the 2000s and 2010s, the rate continued to decline and reached around 30% by 2020.
One also needs to consider that the total number of U.S. born people without a high school degree has severely shrunk in the past few decades: Between 1990 and 2020, the size of the U.S. born adult population over 25 without a high school degree declined by about 8.2 million (from 18.5 million to 10.3 million). As a percentage of the total U.S. born adult population over 25, this group declined from 13% in 1990 to 6% in 2020.
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