In his Wall St. Journal column, “Biden’s Slow-Growth Budget Gamble,” Brookings Institution Senior Fellow William A. Galston, author of Anti-Pluralism: The Populist Threat to Liberal Democracy, writes:
According to a recent CBO report, the principal driver of slow growth since 2008 has been a sharp slowdown in the growth of the labor supply. As baby boomers joined the workforce, the annual increase in labor supply averaged more than 2%, peaking at 2.5% between 1974 and 1981. As late as the 1990s, annual labor-force expansion averaged 1.2%. But as the population aged and baby boomers began to retire, annual increases fell to 0.5% between 2008 and 2020, a figure that the CBO expects to fall to 0.4% in 2021-25 and 0.3% in 2026-31.
The distant future looks no brighter. The total fertility rate needed to maintain a stable population is about 2.1 children for every woman. In 2020 the U.S. rate dropped to 1.64, the latest in a long decline. The workforce of the 2030s and 2040s could be smaller than today’s, a prospect that other advanced economies are also facing, including China.
The two solutions are politically incompatible.
Increasing domestic labor participation requires progressive policies.
Increasing immigration turns off conservatives and many moderates, leading to no immigration reform plus no progressive policies.
Is it really that hard to understand?