The White House sees a need for more migration and increased spending on child care to add to the dwindling workforce in the country. This is stated in the annual report of the Council of Economic Advisers of US President Joe Biden, published this past Monday.
In the report, the advisers indicate that the country faces “a major shortage” of labor as it recovers from the Covid-19 pandemic. They pointed out that the lack of workers in the labor market is not only due to the Coronavirus, but also to long-term demographic trends and the lower participation of adults in said market.
The report draws attention to the fact that without increased immigration and efforts to encourage more adults to participate in the labor market, the labor force is likely to remain “constrained in the future.”
So they suggested “proactive policies” such as increased spending on childcare, increased migration, and greater bargaining power of workers to increase the workforce.
Otherwise, they warned of the “negative impact” on living standards of lower economic growth driven by lower adult participation in the labor market and an aging population.
The great resignation
During the pandemic, a phenomenon known as “the great resignation” occurred in which many workers in the country voluntarily resigned from their jobs. Last February, the unemployment rate in the US grew 0.2 decimals and stood at 3.6%, after three consecutive months in which it had fallen, at a time when eyes are focused on the effects that interest rate hikes by the Federal Reserve to contain inflation may have on the labor market.