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As I was reading through Sen. Ted Cruz's (R-TX) new immigration plan, one line stuck out for me: "Under no circumstances should legal immigration levels be adjusted upwards so long as work-force participation rates remain below historical averages."
This is a remarkable statement because, if you take it at face value, it could imply that America should never increase legal immigration levels. To see why, you have to look at the graph of labor force participation:
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As you can see, the LPFR has had two big trends over the past half-century. From 1965 until about 2000, the labor force participation rate rose pretty steadily. Since the turn of the century, things have been moving in the other direction, and the trend accelerated after the 2008 financial crisis.
It's not clear what Cruz means by workforce participation rates remaining "below historical averages." Our current labor force participation rate is way above the average level of the 1950s, '60s, and '70s. But he said remain below historical averages, so it sounds like he means a level closer to the high rate of the 1990s and early 2000s.
Labor force participation probably won't go back up
If the declining labor force participation rate since 2008 were driven by the business cycle, there could be an argument (though not a very good one) for limiting immigration until the LFPR rate goes back up. On the other hand, if the declining labor force participation rate is driven by long-term demographic and technological trends, then limiting immigration until the LFPR goes back up could mean waiting forever.
The reason for recent trends in the LFPR rate becomes obvious when we break things down by gender:
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The feminist revolution of the 1950s and '60s opened many professions to women, so female labor force participation rose for several decades. But women stopped flooding into the workforce around 2000. Meanwhile, male labor force participation has been declining steadily for 60 years. It's happened more quickly during economic downturns, but even during booms the male rate hasn't gone up. And since 2000, neither has the female rate. As we've collectively gotten richer, older, and more educated, we've been choosing to spend less of our time at work.
That suggests that the labor force participation rate is unlikely to go back up anytime soon. So Cruz's proposal would mean that we never expand legal immigration.
And that's problematic because declining labor force participation is an argument in favor of more legal immigration. As the labor force ages and birth rates drop, we're going to have a less and less favorable balance between workers and retirees. We could use more young workers to staff our nursing homes and pay the taxes that finance Social Security and Medicare. Permanently capping legal immigration — which is what Cruz is effectively proposing — is a terrible idea.
This could be a big misunderstanding
A final possibility is that the Cruz campaign just worded its immigration plan in a confusing way. A couple of sentences before he talks about workforce participation, Cruz says that we should "halt any increases in legal immigration so long as American unemployment remains unacceptably high." The unemployment rate only counts people who are actively looking for work, so it measures something different from the labor force participation rate.
So it's conceivable that when he referred to a higher labor force participation rate, he really just meant a lower unemployment rate. I contacted the Cruz campaign Friday by phone and email to get a clarification, and they have yet to respond. I'll update this post if they get back to me.
