3 ways to increase the labor pool

Open pathways to increase legal immigration and employ more older Americans and teenagers

On February 7, 2020, as a mysterious novel coronavirus continued to spread across China, the Washington Post ran an article entitled, “The economy added 225,000 jobs in January, showing continued strength.” The Post reporters noted that “perhaps the most encouraging news in the latest jobs report is that the share of working Americans who have jobs or are actively looking for work — known as the labor force participation rate — ticked up to its highest level in seven years, about 63.4%.”

Now, some 30 months and one pandemic later, the national labor force participation rate is hovering just over 62%, 1.3% below the February 2020 rate. Employers of all sizes and across all industries are struggling to find and keep workers, even as they increase workplace flexibility, offer enhanced benefits and increase wages — average hourly wages for retail front-line workers have increased by over 14% since the onset of the pandemic.

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Presently, there are nearly two open jobs for every unemployed worker. For this country to have a healthy, thriving, expanding economy, we need to address this unprecedented situation in which there are jobs without workers to fill them. As such, NRF supports numerous policies that, if implemented, could address the impediments that are prolonging this crisis.

First, Congress needs to find the political will to increase legal immigration at all skills levels. America — and American employers — need computer programmers from Pakistan, nurses from South Africa and lifeguards from Slovakia. There are millions of individuals around the world waiting to be given permanent residence in the United States. They are willing to take and able to pass a background check. They have family members and/or employers ready and willing to sponsor them. But they are hindered by bureaucratic paperwork, arbitrarily low annual numerical caps, and COVID-related protocols implemented by the Trump administration and preserved by the Biden administration.

Secondly, some of the decline is attributable to older workers, a significant number of whom retired early during the pandemic. The workforce participation rate for those over 55 is 1.6 percentage points below its February 2020 level. Congress should immediately rescind the penalties on Social Security benefits for those retirees who choose to return to work. Employers are ready to engage these workers who can use their extensive past knowledge and experience and apply it to a new opportunity.

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Third, Congress should make it easier for employers to engage minors in the workforce. Given the current hiring challenges, some employers have been courting young people. Some are even reexamining their policies regarding hiring minors, despite the myriad of federal and state regulations that govern such hires.

NRF recently hosted a webinar on the topic and over 60 of our members participated; many are actively navigating the byzantine legal challenges of hiring teens. (One example: Labor Department rules permit 17-year-olds to “occasionally and incidentally” drive trucks on public highways, but prohibit the same worker from operating a golf cart.) The Labor Department should provide clear, workable rules so that willing teens can participate in the American economy.

While none of these policy changes alone will end the worker shortage, it is long past time that policymakers confront this ongoing reality and address the challenges faced by American employers.

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