The number of empty jobs employers are trying to fill has fallen from a record-high 11.9 million in March to 10.3 million. Good progress, but that is more than twice the 5 million job openings that were normally available pre-pandemic.
Corporate America and its allies in Congress want you to believe that the only possible way to fill all those job openings is to increase immigration. The Chamber of Commerce has even asked Congress to double the number of immigrants admitted every year, even as President Joe Biden has opened the floodgates to release about 100,000 illegal immigrants into the country every month.
There is a better way. What corporate America won’t tell you is that the male working-age labor force participation rate has fallen from its post-World War II high of 87% in 1949 to the current rate of 67.6%. To get back to a normal level of job openings, all we need to do is raise the male labor force participation rate to 71%, a level most recently attained in 2009.
So why has the male labor force participation rate fallen so far? Researchers at the Federal Reserve Bank of Boston recently looked at state-level wage and employment data and found that there might be a relationship between male income inequality and male labor force participation.
Specifically, their paper found that the real wages of non-college-educated men were not as important to their labor force participation as relative earnings compared to other men. In other words, given a state where non-college wages were flat, but college-educated wages rose slightly, labor force participation among non-college-educated men fell only slightly. However, in states where non-college wages rose in real terms, but college-educated wages rose much faster (meaning non-college wages fell relative to college wages), non-college labor participation fell more steeply.
Those states where the top earners make disproportionately more than the other workers saw the greatest drop-off in non-college labor participation.
These findings leave policymakers with some difficult options. We don’t want to take money away from the most productive members of the economy just because their success causes others not to work, but maybe we could somehow boost the wages of non-college workers so their effort helps them keep up with the Joneses.
The exit of working-age men from the labor force is an issue that affects all of us. Fewer working men means fewer marriages, fewer married families, and more children raised without fathers.
