Last year’s quarantines and economic slowdown pushed many families into a one-earner status — even if unwillingly.
It turns out some liked the subsequent work-life balance. Rather than struggle to care for children and satisfy bosses, not to mention carve out time for one another, some couples surely found that they could make do with one wage and have a better quality of life.
And we're seeing this in job statistics.
As a result, many employers will inevitably demand a massive increase in immigration to meet the demands for the low-wage workers the US economy increasing adapted to after 1980.
If Americans want to return partially to the pre-1980 family structure, only increased automation and a significant uptick in annual immigration numbers can meet employers’ demands.
This post-pandemic return to a more traditional America will certainly lead to increasing alarmed talk on CNBC and Fox News noting how this trend is greatly harming our nation's "sacred" and bizarrely arcane wartime economic statistic made famous by Mitt Romney, the Labor Force Participation Rate.
The pre-1970s economy rested on a model with single-earner households, with disproportionately higher male labor force participation and relatively low levels of immigration. But a rising Labor Force Participation Rate ushered in a new low-wage economic regime.
It doesn't take many people to decide this to throw our post-Reagan labor market out of whack. Government data show that the overall labor force participation rate is down from a pre-pandemic 63.4 percent to 61.6 percent today. That seemingly small 1.8 percentage point drop is the equivalent of about 5 million people. That’s slightly larger than the 4.2 million fewer jobs available today compared with February 2020.
Suppose only 1 percent of the pre-pandemic labor force decided to embrace a one-earner lifestyle. That would reduce the labor force by 1.6 million people, explaining roughly one-third of the total labor force drop and more than 40 percent of the employment gap.
Immigration, both legal and illegal, shot up in the post-Reagan economy. More importantly, women surged into the workforce, soaring from a mere 37 percent of the labor force in January 1960 to a high of 60 percent in December 1997.
But this move toward a low-wage economy has been turned on its head.
The latest data show only 56 percent of women are looking for work, a number that has remained relatively stable since summer 2020. Male participation rates have also dropped and remained stagnant since last summer: Only about two-thirds of men are looking for work.
Together, this means millions of Americans have simply dropped out of the active economy entirely, younger drop-outs turning into single earner homes and older drop-outs being jet-fueled by the Medicare and Social Security welfare systems.
As this shift occurs, the ramifications are profound.
Employers will still need workers, which means they will try to raise wages to attract people back. They’ve been doing that for months, so far with little effect, and that might be because this is a double-edged sword: The more one earner can make, the easier it is to live on one paycheck. Raising wages, then, might not have an aggregate positive effect on overall employment numbers.
If Americans in families want to return partially to the pre-1980 family structure, only a significant uptick in annual immigration numbers can meet employers’ demands for low-wage workers. That would make an already controversial issue even more explosive.
American businesses have benefited massively from the move toward two-earner couples. If the recent employment data signal that trend is reversing, the economic restructuring we are about to experience may be traumatic. |
