The Wall Street Journal ^ | July 4, 2017 1:18 p.m. ET | Peter Cove
America doesn’t have a worker shortage; it has a work shortage. The unemployment rate is at a 15-year low, but only 55% of Americans adults 18 to 64 have full-time jobs. Nearly 95 million people have removed themselves entirely from the job market.
According to demographer Nicholas Eberstadt, the labor-force participation rate for men 25 to 54 is lower now than it was at the end of the Great Depression. The welfare state is largely to blame. More than a fifth of American men of prime working age are on Medicaid. According to the Census Bureau, nearly three-fifths of nonworking men receive federal disability benefits.
The good news is that the 1996 welfare reform taught us how to reduce government dependency and get idle Americans back to work. Attaching work requirements to social benefits like Medicaid, the Supplemental Nutrition Assistance Program (food stamps), Social Security Disability Insurance and Supplemental Security Income would make what these pages have called “America’s growing labor shortage” a nonissue.
According to the Kaiser Family Foundation, 41% of nondisabled adults on Medicaid do not have jobs. Thirteen million Americans 18 to 54 currently receive SSDI or SSI benefits. Conservatively, work requirements could add 25% of that population (3.3 million workers) back to the labor force. Work requirements for people on SNAP would increase the worker rolls by 1.9 million if only 10% who are not engaged in work rejoined.
There’s no question that insisting on work in exchange for social benefits would succeed in reducing dependency. We have the data: Within 10 years of the 1996 reform, the number of Americans in the Temporary Assistance for Needy Families program fell 60%. But no reform is permanent. Under President Obama, federal poverty programs ballooned.
A better long-term solution to the work shortage would be to eliminate all forms of public support except for those who are unable to work, and eliminate all poverty programs, since they have not reduced poverty since they were established in 1965. The money currently being spent on these programs should be redirected to job creation—preferably for private-sector jobs, but public-sector jobs will do in a pinch. A trillion-dollar federal infrastructure program, such as the one President Trump has said he will propose, could absorb a large number of the unemployed and underemployed.
There are other avenues to pursue. For young men who are not working, a mandatory two-year public-service requirement with an off-ramp for those who snag a job could motivate them to get off—and stay off—the couch.
Too many Americans who could be available to help fuel robust economic growth are instead sitting on the sidelines. It’s time to get them in the game. It’s time to solve our work shortage.
Mr. Cove is author of “Poor No More” and founder of America Works.