Reuters
Published Mar 20, 2023 03:03PM ET
Updated Mar 20, 2023 05:46PM ET
By Andrea Shalal
WASHINGTON (Reuters) - Boosting immigration and public spending on childcare could help cover a large shortfall in the U.S. labor supply that threatens to curtail economic growth in coming years, a new report by President Joe Biden's top economic advisers concludes.
The annual report by the Council of Economic Advisers (CEA) said the aging U.S. workforce, slowing population growth and declining labor force participation by both women and men have created "significant headwinds" for U.S. labor supply, which could depress economic growth and living standards for years.
“Necessity is the mother of invention," CEA Chair Cecilia Rouse told Reuters, warning that failure to enact comprehensive immigration reform and steps that allowed workers to balance home and work responsibilities would harm the U.S. economy.
The report comes amid strong resistance in Congress to Biden's efforts to enact immigration reform, guarantee paid leave for all workers, and boost childcare options, with Republican control of the House of Representatives further narrowing the odds for action.
Rouse said changes were imperative to ensure U.S. growth: “These are not political issues; these are economic issues. If we want to continue the kinds of economic prosperity that we count on ... we have to have all hands on deck."
Labor force participation has begun to recover after an abrupt shock caused by the COVID-19 pandemic, but remains lower than it was in the 2000s, the report noted. COVID accelerated the trend, with more older workers retiring, while declining U.S. life expectancy was removing other workers.
That means the "vast majority" of the growth in working age people will come from immigrants and their descendants, it said.
Allowing more immigrants to enter the United States, and legalizing the status of 11 million people already in the country without authorization to work, would offset the aging demographics and boost innovation, without a big impact on the wages and employment of the existing population, it said.
Funding childcare, removing barriers to employment for previously incarcerated people, and expanding the Earned Income Tax Credit, while supporting regional development and encouraging higher rates of unionization would also draw more adults in the workforce and boost labor supply, the report said.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.