Behind these shortages is a steady increase in the number of adult Americans not working. Rising for years, the number exploded during the Covid lockdowns. The proportion of working-age men out of the workforce—unemployed and not actively seeking employment—has reached unprecedented levels. Though the rates lessened somewhat as Covid abated, they still linger distressingly above historical norms. A contributing factor is the expansion of generous government welfare programs that discourage recipients from seeking work, such as Social Security Disability Insurance payments—now collected by 3.7 percent of all working-age adults, a significant increase from 1.1 percent in 1970. Further, multiple rounds of Covid relief from the Trump and Biden administrations appear to have led many adults to quit the labor market outright, even as the economy reopened.

But the workforce woes run deeper. Ever more adults are unemployable because of worsening social dysfunction, changing youth attitudes toward work, and university and public school failures to prepare students for labor-market realities. Drug legalization has made it harder to find laborers who can pass drug tests—essential to work in industries like construction and transport—leading to worker shortages for key jobs, including truck drivers. A crime spike, meantime, will likely create a new generation of convicts, among the toughest people to employ when they reenter society. Soaring mental-health problems add to the ranks of the unemployable. And many firms hesitate to hire new college grads because they often lack basic skills, starting with knowing how to communicate and function within a group, and often have unrealistic expectations about pay and benefits.