PRB

Transcript

Diana Elliott: Great. Thank you all so much for joining us today. My name is Diana Elliott, and I’m the vice president of programs at Population Reference Bureau, or PRB. PRB is a not for profit and nonpartisan research organization that uses population data to improve the health and well-being of people in the US and globally. We are delighted to be hosting this webinar today with the Critical Labor Coalition and our special guest, former Labor Secretary Alexander Acosta. On the heels of Labor Day, we are reflecting on the state of the labor force. Anyone who reads the news these days is presented with an array of data in the US that suggests that any one time that we don’t have enough workers or enough workers with the right skill sets, or we have too many workers in certain professions or sectors. This webinar is an attempt to cut through the noise to present who is in the workforce, why we have long term challenges ahead of us, and some possible solutions.

I am delighted that both former Labor Secretary Alexander Acosta and CEO of the Critical Labor Coalition, Misty Chally, are here with us today to discuss these issues. First, we’ll hear remarks from Alexander Acosta, former US Secretary of Labor. He will present background about the state of the US labor force, drawing upon his experiences as the former head of the US Department of Labor. Next, I will present how demographic trends matter for the labor force now and in the future. Then Misty Chally will present information about the Critical Labor Coalition and why they are working to find solutions to labor shortages and the legislation they are seeking to advance. We will conclude with a Q&A session with all panelists, where we welcome audience questions about the workforce now in the future, and ways we can work towards solutions.

Finally, a bit of housekeeping before we begin. If you have any questions during the presentations, please type them into the question box in your webinar control panel. Attendees will be muted. We will also share a recording of the webinar after the event on PRB’s YouTube channel. And now I am delighted to introduce Alexander Acosta, former US Secretary of Labor, for his remarks.

Alexander Acosta: Diana, thank you. I appreciate the invitation from from you and from Misty to be part of this webinar and in particular, I appreciate the opportunity to be, you know, to to go over the data because I think there is so much discussion and, and, frankly, noise in this space that it’s important to take a step back and just look at that data and say, where does the data lead us? there’s a PowerPoint that I think you have, and I want to start with the first slide if if we could.

So, the first slide is a slide going back to the year 2000. that’s very simple. This tells so much of the story. It starts out with this is the labor force participation rate. All my data, I should say is from either the Bureau of Labor Statistics or the OECD, which is an international organization. These are the aggregators of data that are sort of the gold standard, in my opinion, in labor data. And I think we often focus on the unemployment rate. But what really matters in the long term is the labor force participation rate. Put simply, the unemployment rate is of those who are working or looking for jobs, what percentage cannot find jobs? The labor force participation rate is much broader, it says of the population, of our adult population that is not institutionalized. That is by, you know, excluding individuals who are in the military, who are in jail or in other institutions. Of those who could work, what percentage are either working or looking for work? And as you see, in 2000, the number was pretty close to 68%. And then there’s a pretty dramatic and steady decrease until about 2016 where it levels off, goes up a little bit, and then Covid hits and we haven’t quite recovered to where it was.

The next slide sort of puts it all in numbers with a little bit more specificity. And so, you see that we started out at 67.3%. By ‘04 we dropped about 1.2. We sort of hovered through ‘08. By 2012, we dropped again, 2.5 by 2016. We dropped another point. Between 2016 and 2020, we actually managed to go up. We went counter trend, for a short period of time and and then not only have we dropped again, but if you look at the projections that come from the Labor Department, the, the drop in the labor force, participation is expected to continue, through 2028 and again to 2032. you know, what’s truly frightening about this is that by 2034, the labor force participation rate, in other words, the percentage of Americans that are working or looking for work is going to be about the same level as the worst month of Covid. So if you think back to the worst month of Covid, all those folks that said, we’re not going to be part of the labor market, by 2034, that is going to be the everyday state of play in America, not according to me, but according to the Bureau of Labor Statistics. and the question is why it’s complicated, but it’s easier to say to some extent. Why not?

Moving to the next slide if we could. You know, I put this up here and this is from 20, from the year 2000 to to the year 2015. You know, it breaks different age cohorts down by race. And I put it up there because I think it’s important to recognize that the effect is, is quite comparable, regardless of race. You know, if anything, you see a larger percentage drop among Caucasians than among other racial or ethnic groups. But you see in this slide and the next slide, you see that, you know, race is not really, something that easily explains, you know, this massive, really, really substantial, massive drop in labor participation rate.

Moving to the next slide if we could. And again, the same issue. You know race is not the the explainer if anything. You know overall you see a larger drop in Caucasians than others. But race doesn’t explain, moving to the next slide. So, this is one of my, my favorite slides. Maybe favorite isn’t the right word. I think the most interesting slides here are the Bureau of Labor Statistics. They always do projections going out about ten years, and they break those projections down by age cohorts. And, and you see that they’re overall predicting a pretty substantial decrease in labor participation rate. in four years out, eight years out. And if you look on the website data, the trend continues, and you see that the trend is much stronger with men than women. the drop is much less for for women than it is for men. but you also see that the drop is greatest among the youngest age cohorts. And this matters because we often hear that part of the problem is that the baby boomers are retiring, that we’re- that our workforce is aging. And that is an issue because the baby boomers are a very hard-working generation. And as they age out, we lose a lot of, you know, both in terms of number but also in terms of workforce participation. We lose a generation that worked very hard, that was very large and that heavily participated in the workforce. But we also see that it doesn’t fully explain it because as new age cohorts enter the labor market, the younger you go, the larger the decrease in labor force participation rate. So, there is something about this decrease that is unrelated to the retirement of the baby boomers, or something about how we’re addressing, newer generations that either discourages or does not connect them to the labor force the way previous generations were connected.

Moving on to the next slide, if we could. So, this is, I think, something we don’t talk about enough and something that’s very important. This data comes from the OECD, which, as I said, is the gold standard for international data. They aggregate data from several countries. And this shows the United States when compared against, the G7 nations, and the eurozone nations. And as you see on the far right, this is in 2000 in red, you see the United States, we had the highest labor force participation rate compared to all the eurozone nations in the G7 nations. And I should say that this particular slide, pulls individuals from 25 to 64. And that’s important because we want to adjust different countries have different university systems, different points at which individuals stop being students and, and fully enter the labor force and different retirement ages. And so, the 25 to 64, is an important comparator when you’re looking internationally because you’re sort of cutting off the two age extremes to really prevent different retirement systems and different university systems from affecting the data. So, in 2000, we had the highest labor force participation rate compared to all our competitor countries.

Let’s look at the next slide though. So here we see by 2008 the United States the red bar was was pretty much right in the center compared to the eurozone countries. And let’s look at the next bar. The next slide I’m sorry. and so, this is 2016. And in 2016 you see that the United States now is one of the lowest rates of labor force participation rate compared to the eurozone countries, you know, and we’re far to the left. We’re, basically fourth from the bottom after as I look closer, after Italy, Greece and Belgium and all the other countries had a higher labor force participation rate. And I think this is important because much of what is happening here is not attributable to a broad global change but is really attributable to something happening within the United States compared to our competitor nations. Either we have done something to change our percentage and lower our percentage, or they have done more to correct the downward trend that I think we’re seeing globally. Because we have fallen behind quite substantially. You know, from being number one to being fourth from the bottom compared to the G7 and the Eurozone nations. And so, I put this out there because I think long term, you know, we can talk about solutions and there’s some solutions in the short term. Part of the issue here is that, you know, businesses want solutions now. They don’t want to talk about societal trends that might take 5 to 10 years to fix. And I understand that because businesses need workers now. And when you talk to Congress and when you talk to policymakers, sometimes it’s easier to present solutions that you can pass a law tomorrow and say, we’re going to have this influx of workers, but I don’t think we talk enough about this, this 20 year trend that, you know, that stopped for a little while, but has now restarted and and is going in the wrong direction because, you know, the United States should not be fourth or fifth from the bottom. We should be at the very top of this.

And so how do we change it? You know, and one final point. I’m not adverse to short term solutions. We need short term solutions, but we can’t implement short term solutions without paying attention to this long-term trend. If today we were to apply a labor force participation, the labor force participation rate that we had in the year 2000, right, we would have 16 million more workers. 16 million. And so, while we can talk about the unemployment rate being lower than it has been historically, for, you know, over the course of 20 years, it’s up a little bit now and it’s, you know, on the upper trend. But it’s you know, in the grand scheme, the real employment rate as a percentage of population is lower than it’s been in a long, long time, lower than it’s been in decades. And those 16 million individuals that are not engaged with the labor force really matter.

We are a different nation of seven out of ten people working to support the three out of ten that are not. Then if only six out of ten are working to support the four out of ten who aren’t. Not simply in terms of our population dynamics, but in terms of tax structures, distribution of tax burden, ability to repay debt, not to mention, you know, the impact that has on GDP. And so, I think this is an issue that we need to address in the long term, you know, with much more specificity. And with that, I’ll, I’ll yield the time. And I look forward to hearing from my fellow panelists.

Diana Elliott: All right. Thank you so much, Secretary Acosta. Really appreciate your remarks. Working at PRB, where we think a lot about demographics and population trends, it can be somewhat frustrating to see news stories that have such short-term focus. Right? Much as Secretary Acosta was suggesting so understanding point in time, employment is incredibly important for getting a pulse check on the economy. It tends to overshadow the bigger picture story.

Next slide. For example, the unemployment rate is followed very closely in the news cycle because it’s an important piece of evidence about whether or not, for example, we’re in a recession. But the larger context is not always presented fully in the news. As of July 2024, the unemployment rate was 4.3%. This is not as low as it was a year ago when it was 3.5%. But it’s still better than what economists consider to be full employment. And that detail isn’t always shared in the news stories. But the unemployment rate, again, doesn’t tell the full story. We’ve had a longer-term trend where there are more job openings than unemployed people, and even if some of these job openings are ghost jobs, something you’ll also hear about in the news or postings that employers don’t intend to fill. We can safely assume this 1.4 million gap between jobs and workers is not all ghost jobs. So actually, back to the previous slide, please. So, the unemployment rate is also a lagging indicator and is not terribly future looking. It all misses the nuance and context around who isn’t working and why, but demographics can fill in some of this information as I’ll walk through. The U.S. has had a rapidly changing age structure and changes in mortality and illness that may be contributing to long term challenges in the labor force. Further, policy decisions in the U.S. may contribute to reasons why not everyone who wants to work is actually working.

Next slide. So, as was hinted previously in the in the prior prior remarks, one of the biggest shifts in the U.S. and one that is changing the labor force right now is how we are aging. Between 2000 and 2023 and the 21st century alone, the U.S. median age has increased by 3.8 years. If you lined up every person in the U.S. from youngest to oldest in 2023, the person in the middle would be 39.1 years old. In part, this is because baby boomers, the large cohort born after World War II between 1946 and 1964 are aging. This is affected and is currently affecting the labor force because baby boomers are retiring. To put this into perspective, as of 2022, 57% of baby boomers were over the age of 65. And we know that by age 65, 90% of Americans are. Previous slide, please. 90% of Americans are already collecting Social Security. We also know that most retirees report having retired at age 62. This means that most baby boomers are retired. The youngest of baby boomers turns 60 this year, meaning all are eligible to access their retirement savings without penalty. And by 2030, most will be over the age of 65 and will have exited the labor force. One of the themes you may hear about in the news is the prediction that older people will live longer and work longer, but the evidence so far suggests that hasn’t come to pass for the majority of older Americans. While Warren Buffett may be hard at work at 94, the data suggests this isn’t the future for most people.

Next slide. So, another way to look at this is through the age dependency ratio, which looks at the share of those aged 65 and older relative to those of working age, ages 15 to 64. Since mid-2000, the age dependency ratio has reliably gone up every year. In short, we have a growing number of retirees, which has implications for Social Security and public pensions, for example.

Next slide. An important reason why this ratio is shifting is because our birthrate has declined in the U.S. since 2000, the total fertility rate has been well below the replacement rate. Why is 2007 a significant year for thinking about the labor force? Because those born in 2007 are now 17 years old and entering the labor force, the provisional fertility rate and 2023 total fertility rate was 1.6 births per women, down 2% from the previous year. As context, the replacement rate is generally considered to be 2.1. Put simply, there are too few young Americans and future workers being born to replace retirees. In the news, you may hear complaints about how young people aren’t working. I would argue that’s an incomplete statement. In fact, there just aren’t as many young people to fill roles, which makes workforce training programs all the more important in the larger U.S. context.

Next slide. And the U.S. is not alone in confronting these challenges. Our peer countries are also facing a shrinking share of the working age population. The share of the working age population in Japan has dipped below 60% through a combination of factors increased longevity, fewer births, and tight immigration policies. And there are adaptations to that new reality underway. The U.S. and Canada have both seen a decline since the mid 2000, and Canada remains slightly above the U.S., in part because they’ve implemented various policies to try to change that trajectory.

Next slide. Unfortunately, we also need to confront that deaths among working age adults have risen in the U.S. in recent years. Since 2010, as a result of various conditions, there have been a decrease, a decline in the number of working age adults in the U.S. Covid-19 certainly exacerbated this. In 2020, it’s estimated there were 58 excess deaths per 100,000 people ages 15 to 64. So excess deaths are not just from Covid-19, but from other illnesses that went untreated because of pandemic lockdowns. Further, long Covid symptoms may be depressing labor force participation, similar to general trends with Americans with disabilities. Workplaces may not be accommodating people with long Covid optimally, and others with long Covid may be leaving the workforce to handle their symptoms. One study estimated that 1.6 million workers were missing from the workforce in 2021 because of long Covid symptoms. So, because so little is known about the trajectory and treatment of long Covid symptoms, it’s unclear how permanently this will affect the labor force in the long run.

Next slide. This graphic from Paris 2022 publication “Dying Young,” authored by Richard Rogers of the University of Colorado at Boulder and coauthors, shows that the U.S. really stands apart from other peer countries for the probability of death among teenagers and young adults in the U.S. This suggests that there are health and safety policy challenges in the U.S. that are contributing to these sad and tragic outcomes. And other countries have done a better job creating safer environments for their young adults and accordingly, their future workforce.

Next slide. Demographers also think about immigration and how it matters for our labor force. Immigrants and U.S.-born children are a significant share of the overall labor force. but in recent years, immigration policies have contributed to backlogs, which made things worse during the pandemic. While things have mostly returned to pre-pandemic levels, there remain persistent problems with issuing work permits and visas to immigrants who have entered the country legally. For context, in 2023, the overall population added 1.6 million people. This is despite a falling birth rate. The census attributes this increase to the resumption of post-pandemic norms around immigration, as well as fewer deaths following the pandemic uptick.

Next slide. Beth Jarosz at PBB analyzed the most recent Census Bureau projections in a blog published in 20th November of 2023, and describes how the most likely scenario for the future population of the U.S. is for us to reach a high point in our population around 2080, and then to begin slowly losing population with us reaching the year 2100 with about 366 million people. For perspective, a baby born today would be 76 years old in 2100. And these numbers in part reflect our slowing fertility in the U.S. However, if immigration were to slow or to be halted in the U.S., we reached these inflection points sooner, potentially within the next 1 to 2 decades.

Next slide. In fact, she shows that within 20 years the main series or the most likely scenario for the future shows that within 20 years, deaths will outnumber births. This is all accelerated with the curtailment of immigration from current levels. Next slide. But let’s move away from a doom and gloom scenario, because policy matters tremendously in terms of how we confront these demographic challenges, we’ll think about that with respect to the U.S. labor force.

Next slide. So one way to confront the demographic challenges is to think about who in the working age population would likely be more engaged with work and how we can address those barriers. One group is women, particularly those with young children. The U.S. is notable among our peer countries for a lack of family friendly policies. This limits women’s full labor force participation. That said, women’s labor force participation is now above pre-pandemic levels at 77.6%, but it is still lowest among those with young children. For perspective, Canada’s labor force participation rate for women is 84.9% and is notable for women with young children. The Canadian government has invested billions in recent years to cut childcare costs for working parents. One of the stories you may hear about in the news is that men’s labor force participation rate is also down. That is true from a historical perspective, but it remains higher than women’s rates. men, for example, have a labor force participation rate at 89.1%. Missing from these news stories is why there’s even a gap at all between men’s and women’s labor force participation rates, when women are now outpacing men in their educational training, and the U.S. states are often policy laboratories for what could be. One example to elevate here is New Mexico and its shift to prioritize early childhood education and care. They created a state level department, increased investments in early childhood education, and expanded subsidies for families. This could be a state to watch in coming years for policy examples that help working families and improve parents’ engagement in work.

Next slide. Another group that could be better engaged with the labor force are people with disabilities. In fact, this group of workers saw improved employment during the pandemic, in part because remote work enhance their abilities to engage with work. Between 2021 and 2022. There was a notable increase in their employment and a notable decline in their unemployment. That said, for people with disabilities, their unemployment rate is still two times higher than those without them. Studies have shown that accommodations matter for the employment of people with disabilities. Nearly half of needed accommodations are free, and for those with a one-time cost, the expense is typically $300. So again, states offer examples for policy ideas to engage people with disabilities who are eager to join and be a part of the labor force. For example, Ohio established the state’s vocational apprentice program in 2019, which are paid apprenticeship opportunities within state government. This not only helps people with disabilities enhance their resume and potentially find a permanent state government job, but it also helps to fill gaps within state government offices.

Next slide. So, let’s reflect on what we know about the state of the U.S. labor force. Births have slowed in the U.S., and there is neither a growing cohort of young people nor older Americans who will be tomorrow’s workers. Challenges such as mortality and morbidity present uniquely American challenges in our labor force. As we look to the future, we’re confronting a demographic future where there are fewer workers amidst an increasingly aging population. But policy can intervene to better engage workers who have been sidelined and want to be more engaged in work. There are examples happening in other countries, and even within the U.S., that suggest ways to attract, retain and train the workforce amidst overarching demographic shifts in the labor force.

Next slide. So, thank you. And now at this point, I’m going to turn it over to Misty Chally of the Critical Labor Coalition to additionally share how her group is working on legislative solutions to these issues.

Misty Chally: Thank you, Diana, and thank you for everyone who took the time to join our webinar today. Just waiting for the slides in a moment. And while we wait, I would just like to mention an add-on to the Secretary and Diana’s comments about the workforce. I think also what we’re seeing is the workforce, the nature of the workforce has changed, with a lot of people working from home and, you know, having flexibility as an Uber driver and setting their own schedules. We’re seeing a lot of people leaving places of employment where you need in-person attendance, if you will, a set schedule, somebody to be in a restaurant or a hotel or a retail location, where you actually need people physically there. And so that’s why when you go to a restaurant and you know, there’s a long wait, but you see a lot of empty tables, it’s because of the labor shortage, because there simply are not enough workers in those in person needed areas, to fill those spots. So, want to just to add that to the conversation and yes, AI does help in some ways, and definitely contributes, but you cannot replace all workers with I although it does help the employers and the workers in many ways. So, it looks like we’re we’re back up. So, thank you for letting me give my little personal opinion on that.

My name is Misty Chally, executive director of the Critical Labor Coalition. My background is in representing franchisees and franchisee associations. And so, this issue came up when I was talking to a number of different franchisee associations. called the Critical Labor Coalition, and they represent everybody from Planet Fitness and Domino’s to Burger King and Meineke. So, all different industries. And we were talking about, you know, what are our key issues, regardless of industry. And the issue was the labor shortage. Everybody was and continues to have an issue with the labor shortage. and that’s really where the Critical Labor Coalition was formed.

So next slide please. So, I formed a Critical Labor Coalition in July of 2022. It’s a nonprofit 501(c)(4) to address the issues of the labor shortage. We seek legislative solutions to address labor shortage, understanding that there is no silver bullet here. I mean, there are different ways to approach it. and that’s what we do. Our members are trade associations, corporations, individual business owners. And I should note that we advocate for bipartisan policies, that incentivize individuals to return to work and that grow the workforce. And how we do that is by focusing on different communities of workers. How do we get them into the workforce? Everybody from guest workers to seniors to, entry level workers to veterans, to those in the Second Chance community, the disability community and caregivers. We look at them individually and collectively to determine how do we get them to return or enter the workforce.

Next slide. These are our members right now, as I mentioned, trade associations, individual employers like Chipotle, the Restaurant Association, hoteliers, um staffing services, the um Amusement Park Association, food distributors. I mean, everybody of every industry is still having this problem. SHRM, representing the human resource community of everybody continues to have this issue. And so, I am honored to have them as members of our coalition.

Next slide. So how do we get something done? How do we address this labor shortage? Well, the Critical Labor coalition focuses on two issue areas. One: How do we grow our workforce? And two: How do we promote tax incentives to get those in the country already in the country, incentivized to enter or reenter the workforce? And I’ll go into these, individually.

So next slide please. So, when we’re talking about what are the tax incentives, CLC uh supports a number of different tax incentives. one being a bill that would expand the work opportunity tax credit or WOTC, and that is a tax credit for employers to hire from, certain communities that face roadblocks to entry. That bill was initially or WOTC was initially passed in 1997 and hasn’t been updated since. So, this bill would increase the percentage of the credit from 40 to 50% of up to $6,000. Again, these are not silver bullets. These are not significant amounts of money, but they help get people back to work. And then it has a provision that would provide additional support if those workers work at least 400 hours or stay in their employment. EITC for Older Workers Act. EITC stands for the Earned Income Tax Credit, and this is a tax credit that would expand to include seniors over 65 without an eligible dependent. Right now, to qualify for the Earned Income Tax Credit, you have to be part of a specific community similar to WOTC and earn under a specific amount. But right now, if you are older than 65, you can’t get the earned income tax credit. And so, what this bill does is it eliminates the top age restriction for EitC eligibility. And the third one, the credit for Caring Act is bipartisan bicameral bill. And it gives a tax credit to people that are family caregivers, those that go to work, come home and have caregiving expenses that they then have to go and take care of a loved one, which is very broadly defined. and so again, it helps those people that have to go to work and then come home and take care of a loved one. And I should mention, our Coalition works with what we call strange bedfellows. So, while we represent the business community, we’re working with AARP, on these issues, as well as nonprofits, antipoverty centers like Golden State opportunity, out of California and where we want to show Congress that this is not a partisan issue. Businesses support this. AARP supports this, antipoverty group supports this. This is just a workforce issue.

Next slide please. And then when we focus on workforce growth how do we get more people here? Again, we are working with groups like Refugees International, the Asylum Seekers Advocacy Project and other groups to promote these pieces of legislation that will help get more workers here, one being the Essential Workers for Economic Advancement Act. Right now, there is no real visa program for those that are in nonagricultural less skilled positions. There are seasonal workers, but our members like restaurants and hoteliers and others, they need people year-round. So, this bill would introduce an H-2C visa program, that would allow for individuals to come over. It’s a nonimmigrant visa program, and work in the country, get some experience based on need. and there are economic triggers to make sure that those workers are needed, that there is low unemployment in the areas, and that the employers have been looking for somebody to fill that position for a certain period of time as well. The Asylum Seekers Work Authorization Act, is a great solution, I believe, to get people back into the workforce that are already here. Again, a bipartisan, bicameral bill, that would shorten the waiting period for asylum seekers to receive work authorizations. as many of you know, when asylum seekers come here, they have to wait 180 days to even apply for a for work authorization. This bill would reduce that deadline to 30 days and then they could apply and start working. and so, this bill would get the people who are staying in hotels and being subsidized by the government to actually work in those hotels who actually need the workers, and they want to work, we want them to work. So, it’s common sense, a bill that we really would love to pass Congress. The Senate and the House bills are, are two different versions of the same bill, but we support both of them because we just want people to get back to work.

Next slide. And just some ways in how we do that. We do congressional briefings quite frequently. That right there is the future of the workforce caucus briefing. On your left and on your right. We did a briefing for the New Democrat Coalition. talking to them about workforce issues. And we do many of these every year.

Next slide. Just a couple other things. We had the pleasure of having Diana speak to our group and provide, data and information, really, really interesting data. To our group, we do many, many hill visits to House and Senate offices. and we do briefings with groups like the Problem Solvers, and other coalitions. whose goal is to pass bipartisan legislation. We do webinars like this. We did a webinar on fair chance hiring, second chance hiring, with, the American Probation and Parole Association, which was, great to have them on board.

Next slide. Finally, we do digital ads in Politico and Bloomberg. And this on the top is an ad that we put in a number of different electronic media. And it’s just an astounding number, as Diana mentioned, if every unemployed person had a job, we would still have over a million unfilled jobs. And that’s kind of a startling number for some people and really kind of hits home to what the problem is.

Next slide. And just as an opportunity, I was on a podcast that will be available tomorrow, but wanted to give you guys a sneak peak. The Friday Reporter is a great podcast that goes into some of the issues that are going on. in DC, a lot of reporters, and congressional staff, are subscribed. So if you scan that QR code, you can get a sneak peek of what we were talking about on this podcast, which is more in depth discussion of the labor shortage.

Next slide. And I would just conclude by saying, you know, we welcome everyone to the conversation. So please feel free. We would love for you to follow us and check out our website. talk to us more. That’s my email address. and and get involved in the conversation. We certainly need the help. And again, thank you all for joining. And I’m going to send it back to Diana, and Secretary Acosta to answer some questions.

Diana Elliott: Great. Thank you. and just a reminder to put questions in the Q&A. I also have a few questions where I’m going to use, you know, sort of moderator’s privilege and ask a question of my co-panelists. So first off, I think I’d love to hear from both of you. You know, we’ve heard a lot about challenges right now. are there bright spots that you see on the horizon for our labor force? in the wake of demographic change in the wake of structural changes that we’re seeing?

Alexander Acosta: So, let me take it. Take it first. if I could. I do think there’s a bright spot in that. I think this is, you know, the first time that I sort of addressed the issue and I focused my personal view is that a lot of this has to do with our education system. I saw a lot of heads nodding, and I’m seeing more and more heads nodding. You know, I, I had early on as secretary and meeting with, community members from a city in Texas and a businessperson said, we need more welders and I’m willing to start a welder out at 60,000 right now. And the president of a community college said, that’s great. We’ll start a bachelor’s degree in welding. And I’m thinking, excuse me. The answer to more welders is we’re going to start a bachelor’s degree in welding. Is that really the case? You know, I think starting in the ‘70s, for all the right reasons. we started subsidizing education, particularly college education, in the matter of trillions. But along the way, we forgot that there are all these folks out there that aren’t going to college.

And if you were to break down, I showed a lot of data. If you were to break down the the data from the Bureau of Labor Statistics by college, whether you’ve attained a college degree, whether it’s, more than high school or high school, only you see that the biggest drop in labor force participation rate isn’t among the college students. It’s among those that don’t have college. And it’s really among what we’ll call the service workers, the construction workers, folks that work with their hands. And along the way, we’ve done three things. One, we say that college education is education at the Department of Labor. And if you don’t go to college, you get workforce training, I’m sorry, call it education at the Department of Education. And if you don’t go to college, it’s workforce training at the Department of Labor. Why is learning to be a welder any less an educational experience than going to college and learning to be a nurse’s aide? It is not. And language matters. It’s all education.

Two, we subsidize college education to the trillions of dollars, but if you want to learn to be a welder, you have to pay for it yourself. All these college loans are not available. All the Pell Grants are not available. And that matters. And so, we are biasing folks in favor of jobs that may not be their first line of preference. I gave this talk in Boston once, and the person running the audiovisual came up to me afterward and said, you know, I went to, I forget if it was Boston College or Boston University, I’m still paying off the loans. And then afterwards I had to go and get educated to run audio-visual equipment, because I make more running audio-visual equipment than I do from my college degree. And not only do we subsidize them, but now we’re forgiving all those college loans. But what are we doing for all those folks that that are working with their hands?

And then finally, I’d say even the way we talk about this. Right. You know, how often in our communities have we heard we have a health care crisis? We need to expand our nursing schools or medical schools. and we do, and I have no issue with that. But then how often have you heard we don’t have enough folks to build those hospitals to, you know, to work inside those hospitals as service workers. Do we then say we need to go out and create job educations for them, or do we talk about immigration as a solution? Do we really treat all tracks equally and say, is the goal a family sustaining wage, or have we started biasing the conversation in favor of those that have our backgrounds? All of us on this talk on this panel went to college is our tendency. Just think about this from the perspective of the college graduate. And, and if you look at the labor force data, you see that the biggest declines are not among the college graduates, but among those that didn’t go to college. And what are we doing to address them?

Final point, and this is where I think the business community and I disagree a little bit. I have no issue with short term solutions, but if short term solutions bring in more workers from abroad, you’re driving down wages. And that’s discouraging a lot of Americans from joining the labor force. And so think back 20 years ago, how many neighborhood kids would go and, let’s say, mow lawns and and are they doing that now? And if they’re not, why are they not doing that? Is it that the wages have not kept pace and that therefore what what economists would call the reservation price of labor and a lot of these service industries, are really to some extent reduced because of the immigration flows? Because, you know, according to, to the data that we saw, if we have low immigration, we’ll have 12 million fewer workers. But if we return to the 2000 labor force participation numbers we’ll have 16 million more workers. And so, to some extent, the short-term solutions undermine the long-term policy shifts that sort of my perspective.

Diana Elliott: I think I can piggyback off of that with a bright spot I see which prior to coming to PRB, I worked on apprenticeship programs, and I feel like apprenticeships are a bright spot for helping people who, perhaps cannot afford to do not want to go to college right away, or that’s not something that they’re planning to do to have that training program sort of with the employer, have that combination of employer based learning and learning in the classroom is really a tremendous benefit. And I’ve been really encouraged by an uptick in apprenticeship programs, for example, to that welder who or that, you know, the welder who needed more welders? I would say. Have you considered, have you considered an apprenticeship program or sponsoring apprentices yourself? In, in the past, right, post-World War II, we had more employers who took an active role in training, and that kind of faded away. And there is a role for employers to be more involved in training. Misty, do you have a bright spot? Before I go to some of these great questions coming in from from, participants?

Misty Chally: Yes, and I would like to respond to some of the, the income and wage questions, but I will say that, bright spot, I think whether because there are many expiring tax credits at the end of next year or because Congress wants to get something done, I do think we are going to see legislation that will help address the workforce shortage pass next session. Because it, honestly, it has to. A lot of the provisions passed in the Tax Cuts and Jobs Act expire at the end of next year. And so, you are seeing a lot, even now, of members organizing themselves and discussing how to help, and the Critical Labor Coalition is certainly part of that discussion.

Alexander Acosta: If I could, Diana, I know that there are a lot of questions, but to respond a little bit to, to your, I think, point about apprenticeships, which is absolutely correct. And it’s a bright spot. You know, one of the weaknesses is that we’re asking employers to step up and fund these apprenticeship programs. Yet we fund college education, right? We don’t ask hospitals to fund the cost of educating nurses. So why should we ask welding companies to fund the cost of educating welders and one substantial difference between us and a lot of Europe is Europe is much better than we are at treating all types of education horizontally equally. And so, you know, community colleges, you know, aren’t what they once were. They’re focusing much more on college, you know, on full college degrees rather than vocational.

There’s a fascinating school in San Antonio. It’s called the Construction Career Academy. It’s a public school, and it’s a magnet program, just like we have high achieving Stem magnet programs. and they have more students and more families applying that they can fill. And every student graduates with the focus on either pipe-fitting, on carpentry, on construction management. And I forget the fourth and the, the fascinating part about it is they then teach math in the context of, how do you keep your books in English in the context of how do you write a business proposal? And you have students that might not otherwise be engaged in high school, fully engaged in high school. And those students have amazing success. And when I visited, the principal said, every year we have X number of students that graduate with scholarships and go on to college, and Y number of students that graduate with job certifications that have a job. And I thought that that equating of the two career paths, the two tracks, the family sustaining wages was wonderful. But why am I only aware of one public school district that has that?

Diana Elliott: Excellent. Um, fair point. Misty, there is a question that feels designed for you to address based on your experience with the coalition. So, it says, what is your opinion on the role of wages to incentivize people to enter the labor force?

Misty Chally: Right. And thank you for that. And I think Secretary Acosta and I will disagree on this, but, you know, coming from the franchisee small business world, I will tell you that the average starting wage, and don’t quote me on this, is about $20 an hour to work in a Burger King. And there’s a reason for that because there are not enough workers. So, they will, their income has increased, their salary has increased, their wages have increased. They’re getting a lot of our members to provide benefits like savings plans, college tuition plans, all of those. And I will say that, you know, the service industry, honestly, I think gets a bad rap for, for being kind of a starting job. I will tell you that many of these jobs, if you have no experience, need to put something on your resume. Want to get started? You can start. And I know many franchisees have started as a dishwasher and if you are a hard worker, I will tell you you will move up in that, in that business, in that restaurant, in that hotel, very quickly. And they have their own training programs for individuals that want to do that. So, they do provide many opportunities that people don’t often see to people that need jobs.

And I’ll, I’ll further say, that the wages issue, and I know it’s been front and center. It, there are, there are resulting effects from an increase in wages that I honestly didn’t understand until I spoke to franchisees that were suffering from this. So, let’s say you are a McDonald’s franchisee, and you raise the wages of your workers, your entry level workers, which means you then have to raise the wages of those managers and the like. And as a franchisee, you are, what you take home is the bottom line, right? What the franchisor takes is the top line. So, if you are paying individuals more, then you’re taking home less. And honestly, if you earn one franchise, this is not, you’re not buying yachts and sailing along the Riviera. And then you’re talking about raising the price of a Big Mac. So, when we’re seeing people complaining about a Happy, or not a Happy Meal, you know, an extra value meal being $15, $20, that’s, that’s a reason why. And so, what do they do? They can go get a kiosk that will be cheaper than paying for somebody to stand and take your order. So, there are a lot of different effects of raising wages. And while I understand that argument, you know, there are, that may actually decrease the number of available jobs in the U.S. So, that is my two cents and you’re seeing it in California where, you know, there’s a law that requires, I think it’s $20 an hour for quick service, and all the franchisees I know are switching to kiosks because they need to make a living as well.

Alexander Acosta: So let me let me just respond, Misty, because, because you said that we might disagree, and I don’t disagree with your, your specific point. You know, national franchises pay very well and and one of the results that you saw with the minimum wage in California, where a number of restaurants are closing down, switching to kiosks, I agree with all of that. My point was a broader one. And, and I think it applies less in the franchise area than other industries that, simply, if we believe in the free market, we need to be equal opportunity free market, you know, folks. And if we believe in the free market for goods, we also have to believe in the free market for labor. And at the end of the day, you know, while legal immigration is necessary and brings incredible, incredible people and, and knowledge to the U.S. –  and this is not an anti-immigration statement because I think legal immigration is critical. The reality is that if we focus immigration on just, we need to fill the service sector. So, let’s bring in folks to fill that in.

To some extent, supply-demand means we are intervening in the free market for labor. I don’t think, you know, personally, I think one of the key drivers for franchises is not just wages, but all the regulations and the benefit costs, you know, around hiring a person that can, you know, almost increase the cost of a hire by 50, 60, 70%. And there’s so many other issues around hires, particularly, you know, in franchised as the franchise or to get liability for their franchisee that it makes hiring the franchise world very expensive. So, I don’t think we disagree with respect to, let’s say, the McDonald’s, which is the example that you used.

Misty Chally: No, I agree with that. And I think what you have to look at, what we used as a tool is look at the profit per employee, look at the industries that are not making a lot of profit per employee and see if they can handle, you know, any type of additional regulation, legislation, price increases and the like. So, thank you for that question, Diana.

Diana Elliott: Yeah. Thank you. I want to note that we are actually over time, but looking through the questions that people sent in, although we may not have asked your exact question, I think we touched upon a host of issues raised from vocational school apprenticeships, the wage challenges, to even robotics or kiosks being used. So absolutely, I encourage everyone to keep the conversation going via social media. Um, stay tuned. I think there’s a lot of material here for us to think about a post-event blog as well.

Keep asking your questions. We would love to think more about this and respond to you on social media. And if you haven’t already, go to prb.org. Consider making a donation so we can keep fantastic panels like this going. We’d love to do more of this. So, thank you so much for tuning in and joining us. And I want to thank Misty and Secretary Acosta for participating and really kicking off our Labor Day week in the best way I could imagine. So, thank you to everyone for joining and for asking great questions, and we hope to see you soon. Enjoy your afternoon.

Alexander Acosta: Thank you.