As you have probably heard by now, the new tax law is having overwhelmingly positive effects on the economy. American workers are seeing more take-home pay, higher wages, and better benefits. And while the good tax news keeps rolling in, it’s important to recognize that our economy can only reach its full potential if its people are fully engaged. Unfortunately, that’s not the case right now.
The reality is that the United States is facing a worker shortage. As the Washington Post defined it recently: "2018’s challenge: Too many jobs, not enough workers."
Many reasons account for this challenge: a changing economy, a widening skills gap, a low labor force participation rate (the amount of people who work or are looking for work), and a welfare system that often provides the wrong incentives.
Consider these stats:
- Seven million men are currently missing from the workforce.
- As of June 2015, one in seven 16–24 year olds were neither in school nor working, adding up to more than 5.5 million “disconnected” youth nationwide.
- Low-income families are trapped in an endless cycle of poverty, “shuffling them from program to program instead of helping them break free altogether.”
With so many missing workers, American businesses are having a hard time filling their vacancies with workers possessing the right skills. A recent poll found that 45 percent of midsize business leaders are “concerned about the limited supply of talented job applicants.” Last month, the Federal Reserve released a study highlighting such labor shortages. In Boston, “one manufacturer was three months behind schedule in trying to hire workers for a new plant.” In Richmond, a trucking company reported that a lack of workers had “left many trucks sitting idle.” In Dallas, “labor shortages persisted, with several reports that difficulty hiring was impeding growth.”
There are jobs available, people without work, and yet a gap persists.
This isn’t a new phenomenon. It’s why the House has passed bipartisan legislation, like a bill to measure program effectiveness and one to better help people overcome the skills gap and get back into the workforce. But what is a newer phenomenon is a booming economy thirsting for labor. Indeed, the economy is in prime condition for people to enter the workforce.
We just have to connect people with the opportunities to realize the American Idea. That’s why, with so much untapped potential sitting on the sidelines, Congress should continue to advance policies that incentivize work, foster independence, and help people escape poverty.
Now is the time to help smooth the pathway from welfare to work by prioritizing workforce development.