A policy question these days that has befuddled federal lawmakers is why so many millions of people have not returned to the workplace in the post-COVID-19 era. The labor force participation rate among employable adults is near a record low today. There are at least 2 million to 4 million employable adults who could and should be working but aren’t.
Very few people with even minimal skills can credibly say they can’t find a job. Employers report some 10 million job openings. Small business owners say their biggest problem is finding competent workers.
There are many explanations for why so many people aren’t working — fear of COVID-19, the skills mismatch, more people taking early retirement, and so on. But a major factor is that the federal government is back to doing what it did in the 1970s and 1980s. The welfare state today is paying people not to work — even a single hour.
That problem went away in the 1990s after many states, such as Wisconsin and Michigan, began reforming their welfare systems with work requirements. Then-House Speaker Newt Gingrich (R-GA) and the Republican Congress in 1996 passed a historic bipartisan welfare reform bill that President Bill Clinton signed into law.
That law required able-bodied welfare recipients to be in a job or training/education program to qualify for welfare assistance. It also placed time limits on welfare so it would not become a way of life.
Few laws in the last half-century have had such stunning success. Here is a quick summary of the impact, as reported by Brookings Institution welfare expert Ron Haskins: