Jobs Report Live Updates: U.S. Added 178,000 Jobs in March With Market Stronger Than Expected 8%
By Lydia DePillis0% Ben Casselman0% Talmon Joseph Smith0% Joe Rennison0% Jason Karaian0% Colby Smith0% Tony Romm0%
4/3/2026, 11:03:02 AM
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U.S. employers added 178,000 jobs in March, and the unemployment rate ticked down to 4.3 percent, a robust showing after a run of weakness.
**What to know about the report.
**
The labor market put in a strong showing in March, as wintry weather receded, strikes concluded and businesses started looking beyond the massive uncertainty of President Trump’s first year in office.
Employers added 178,000 jobs last month, substantially more than economists had expected.
The unemployment rate dropped to 4.3 percent, suggesting that the job market may be tightening up after gradually loosening.
Revisions to previous months subtracted only about 7,000 jobs, although employers appear to have shed 133,000 jobs in February.
The numbers were collected before the energy price shock caused by the war in the Middle East tightened its grip on the global economy.
Forecasters have estimated that persistently higher oil prices will slow job creation and raise unemployment in a year they had expected the economy to regain some vigor.
Health care dominance: Even factoring in the addition of 31,000 jobs from workers ending a strike in California, the sector continued to lead gains, adding 76,000 positions.
Manufacturing, which has been trending down for three years, added 15,000 jobs and construction grew by 26,000.
Federal government still contracting: The federal government shed another 18,000 jobs in March and is down a total of 355,000 positions, or 11.8 percent, since reaching a peak in October 2024.
Wage growth slowing: Average hourly earnings for private sector workers rose 3.5 percent over the year, the slowest rate since 2021 and just barely enough to keep up with inflation.
Also, the average workweek shortened to 34.2 hours, indicating that employees are netting smaller paychecks than they might otherwise.
No vacancy: The hiring rate in February sunk to a low point last reached in 2020 as the economy was largely shut down.
There are anecdotal signs that companies are investing in technology, rather than expanding their workforces.
Firings on ice: Burned by trying to rehire laid off workers after the pandemic, employers have stretched to hold on to their staff.
Initial claims for unemployment insurance from laid-off workers are as low as they have been in two years.
**Update from Lydia DePillis**
The strong overall jobs number is particularly remarkable considering the severe slowdown in the number of people entering the labor market due to the Trump administration’s immigration restrictions and deportations.
The Federal Reserve Bank of Dallas estimated this week that breakeven job growth — that is, the number of jobs needed to soak up people newly looking for jobs — may even be negative.
The Federal Reserve estimated that labor supply might only grow by about 10,000 jobs per month this year.
**Update from Lydia DePillis**
A slightly more expansive measure of underemployment -- which takes into account people who are working part time but want to work full time, as well as those “marginally attached” to the labor force --- edged up to 8 percent in March.
It reached a low of 6.6 percent in 2023, the lowest level on record.
**Update from Ben Casselman**
The unemployment rate for Black workers fell to 7.1 percent in March, down from 7.7 percent in February.
That number tends to bounce around a lot from month to month, but it has been trending upward, so the drop is welcome news.
Black workers are often the first to lose their jobs when the labor market cools, and the last to find jobs when it rebounds.
Still, their unemployment rate is roughly double that of 3.6 percent for white workers.
**Update from Lydia DePillis**
The share of people between age 25 and 54 who are working or looking for work sank slightly, to 83.8 percent.
That number has been trending sideways for more than a year, after reaching a 23-year high in 2024.
**Update from Talmon Joseph Smith**
The labor department notes that average hourly earnings for all private employees rose by only 0.2 percent on a monthly basis, a sharp slowdown .
This may be the result of slowed recruiting and hiring in the labor market .
When fewer employers are hiring, it tends to be harder for workers to find the competing offers that often produce raises .
**Update from Ben Casselman**
Any time we get good economic data, I hear from readers who are skeptical of the numbers coming out of the Trump administration.
But as I wrote in an article last month , there is no evidence of political bias in the numbers, and economists across the political spectrum continue to trust them.
Even Erika McEntarfer, whom President Trump fired as head of the Bureau of Labor Statistics last year, has defended her former agency on social media.
But the agencies do face longstanding challenges, including shrinking budgets and declining response rates to their surveys, which could erode the quality of their estimates over time.
**Update from Talmon Joseph Smith**
The Trump administration’s DOGE (Department of Government Efficiency) initiative’s legacy of rolling back staffing continues to show up in the jobs numbers.
Federal government employment continued to shrink in March, notching a 18,000 decline.
**Update from Ben Casselman**
With today’s numbers, including the revisions to earlier data, employers have now added an average of about 68,000 jobs over the past three months.
After February’s report, the three-month average had been under 6,000 jobs.
**Update from Ben Casselman**
Nearly 90,000 of the job growth came from the health care sector, which partly reflects the return of about 32,000 nurses who had been on strike.
But job growth was fairly broad across other sectors, including manufacturing, which added 15,000 jobs, and leisure and hospitality, which added 44,000.
**Update from Joe Rennison**
The stock market is closed today for the Easter holiday but the bond market is still trading until midday.
The fresh data appears to initially have been read by investors as allowing the Federal Reserve to focus on reducing inflation with the labor market still solid.
And that likely means no interest rate cuts for some time.
The two-year Treasury yield, which is senstivie to changes in interest rate expectations, rose sharply to 3.85 percent after the numbers were released.
**Update from Ben Casselman**
There were offsetting revisions to prior months.
January’s gain was revised up by 34,000 jobs, to 160,00, while February’s decrease was revised to look even worse, a loss of 133,000 jobs.
On net, employers added 7,000 fewer jobs than initially reported.
**Update from Ben Casselman**
The numbers are out!
Employers added 178,000 jobs in March and the unemployment rate ticked down to 4.3 percent.
**Update from Ben Casselman**
One important caveat to keep in mind when the jobs numbers are released this morning: the strike effect.
A big nursing strike in California and Hawaii depressed payrolls in February by around 32,000 jobs.
The strike has since ended, which means those workers will be counted in the March numbers.
That will lead to a big move in the payroll figures, especially in the health care sector, but most economists will look past the swing to focus on the underlying trend.
**Update from Jason Karaian**
Markets typically veer up or down around the release of the monthly jobs report, but we won’t get that signal today because major exchanges are closed for Good Friday.
However, there is a fairly robust trade ahead of the numbers on prediction markets, the fast-growing , lightly regulated platforms that encourage users to bet on just about anything.
The direction of trading by these bettors is mostly in line with economists’ forecasts, expecting a gain in jobs of between 50,000 and 100,000 in March, and an unchanged unemployment rate of 4.4 percent.
**The Iran war has forced the Fed back to wait-and-see mode.
**
For most of last year, the Federal Reserve found itself in wait-and-see mode as it assessed the economic fallout from the sweeping policy changes imposed by President Trump that rewired global trade and upended the labor market.
The U.S.-Israel war with Iran has thrust officials at the central bank back into a similar limbo that is likely to mean a standstill on interest rate cuts barring a dramatic deterioration in the labor market.
The Fed sees signs of fragility in the labor market but no deep cracks that require immediate attention.
Friday’s data is expected to substantiate that view.
But the dilemma for the central bank centers on what comes next.
The conflict in the Middle East has already snarled supplies and lifted commodity prices, such as those for gasoline and fertilizer.
Shipping costs have also moved up.
Overall inflation in the coming months will be higher as a result.
Consumers, facing higher expenses for some goods, are also expected to pull back on spending to some extent.
A prolonged conflict would amplify the economic impact.
Officials are concerned about the extent to which consumers retreat, given that consumer spending fuels roughly two-thirds of the country’s economic growth.
Businesses, still working through last year’s tariff shock, have slowed hiring.
They have yet to shed workers in droves, though anything that further squeezes their profit margins could change that.
But growth and the labor market are not policymakers’ only concerns.
They are also worried about inflation, which has been running above their 2 percent target for roughly five years.
That fear has complicated whether officials can avoid reacting to the forthcoming pickup in prices, a strategy they have pursued in the past on expectations that a resulting hit to growth will outweigh any lasting inflation issues.
“You can have a series of these supply shocks and that can lead the public generally — businesses, price setters, households — to start expecting higher inflation over time.
Why wouldn’t they?”
Jerome H.
Powell, the Fed chair, said at an event this week.
Despite this risk, Mr.
Powell did not convey any immediate urgency to take action, saying instead that the Fed’s policy was “in a good place for us to wait and see how that turns out.”
John Williams, president of the Federal Reserve Bank of New York and a close ally of Mr.
Powell, echoed that view this week as he warned that the conflict “could result in a large supply shock with pronounced effects that simultaneously raises inflation — through a surge in intermediate costs and commodity prices — and dampens economic activity.”
While Mr.
Williams acknowledged that some of this had “begun to play out already,” he said he expected the burst in inflation stemming from the war to prove short-lived.
He forecast that the unemployment rate would tick down from its current level of 4.4 percent and for inflation to end the year around 2.75 percent.
The Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, stood at 2.8 percent as of January.
**The White House is readying a budget for the statistics agency that compiles the jobs report.
**
The monthly jobs report isn’t the only major federal release arriving Friday.
Later, the White House is set to unveil its newest budget, offering a fresh glimpse into President Trump’s thinking about the future of the agency that produces those job numbers.
Among economists, all eyes are on the Bureau of Labor Statistics, the arm of the Labor Department that tracks the monthly ebb and flow in hiring and prices.
At a moment when its work to measure the economy has become more vital and complicated, experts say the bureau can ill afford the sort of budget cut that Mr.
Trump has proposed in the past.
“Economic data is one of the most important tools we have to manage a 30 trillion-dollar economy,” Erika McEntarfer, the former commissioner of B.L.S., said this week.
“The cost of data is small relative to the benefits, and we should be willing to pay to fund the work of the statistical agencies that provide it.”
The B.L.S. represents a small fraction of the annual federal ledger.
But its output is prized by policymakers and businesses, who rely on federal data to understand the trajectory of a complicated economy.
Yet the agency increasingly finds itself under strain in Mr.
Trump’s second term.
A coalition of former bureau leaders and allied economists, who call themselves Friends of the Bureau of Labor Statistics, estimates that the agency had shed about a quarter of its staff since the president began his campaign to pare down the federal work force.
About 40 percent of the agency’s leadership posts also are vacant, the group has found.
In his last budget, unveiled in May, Mr.
Trump proposed slashing the funding at B.L.S. by about 8 percent for the current fiscal year, while restructuring the handful of federal agencies that produce the government’s regular economic data.
The proposal drew criticism at the time, as experts warned about risks to the bureau’s operations at a moment when the economy was grappling with major questions, including the rise of artificial intelligence.
But the opposition grew to an uproar once Mr.
Trump attacked B.L.S. for issuing a jobs report that he did not like, leading him to fire Ms.
McEntarfer, the agency’s Senate-confirmed leader.
The move stoked widespread blowback among economists, who said that Mr.
Trump risked politicizing the bureau’s widely cited work.
In the end, Congress did not cut funding for B.L.S. for the 2026 fiscal year.
Lawmakers largely maintained its funding — more than $700 million — as part of a series of spending packages that rejected many of the president’s proposed cuts across government.
Since then, the Friends of B.L.S. coalition has urged Congress to ramp up its funding even more in the 2027 fiscal year, citing major gaps in its work force and a need to modernize the way it collects information about the economy.
In a public letter, they said the money would help the agency “avoid the degradation of the quality” of its data, particularly at a moment when response rates to its surveys — a key input for measuring the economy — continue to decline.
But recent history has still fueled concern that the president might push to reduce funding once again in his new budget arriving Friday.
If that were to happen, Martha Gimbel, executive director of the Yale Budget Lab, a nonpartisan think tank, said that government data would become “noisier” in ways that further erode public trust.
“If you wanted, in many ways, to maintain what we have, you would actually be increasing funding further,” she said
**Economists once dismissed the A.I. job threat.
Not anymore.
**
Among tech evangelists in Silicon Valley, it has become conventional wisdom that artificial intelligence will rapidly reshape the labor market, for better or worse.
Economists, however, have often discussed A.I.’s impact with a skepticism bordering on dismissiveness.
Rising unemployment among young college graduates?
The result of high interest rates and macroeconomic uncertainty.
Dire predictions of widespread job losses?
A failure to understand the lessons of past technological revolutions.
Even the layoffs that companies themselves blamed on artificial intelligence were often chalked up to “A.I.-washing” from executives looking for something to blame other than their own mismanagement.
Recently, however, the message from economists has undergone a subtle change.
Most still do not see much evidence that A.I. is disrupting the job market.
But they are starting to take seriously the possibility that it could someday soon.
If it does, they are worried that policymakers are not ready to respond.
“I don’t think A.I. has hit the labor market yet, and I don’t think it’s radically changed corporate productivity yet, either, but I think it’s coming,” said Daniel Rock, a University of Pennsylvania economist who has studied the economic impact of artificial intelligence.
In a working paper published this week, a team of researchers surveyed economists about their outlook over the next five and 25 years.
Most expect the economy to grow a bit more quickly as A.I. improves, but not to diverge substantially from historical patterns.
If the technology improves rapidly — a possibility they consider unlikely but plausible — they envision a far more drastic scenario with faster growth but also greater inequality and the disappearance of millions of jobs.
“Economists are certainly taking A.I. seriously,” said Ezra Karger, an economist at the Federal Reserve Bank of Chicago who was one of the study’s authors.
Economists’ expectations for the future looked relatively similar to those of A.I. industry insiders, who were also surveyed for the study.
Both groups agree the future is uncertain: A.I. could either wipe out whole categories of jobs or cause few job losses.
Its effects could be concentrated among entry-level white-collar workers or spread to more experienced workers and those in blue-collar jobs.
The changes could upend the economy within years or take decades to play out.
Given the potential scale of the disruption, economists say it is time to start considering the policies that could help workers displaced or otherwise harmed by the changing economy — something that societies often failed to accomplish in past technological transitions.
“There’s enough conversation around this that we certainly should, as a country, be talking about what sorts of policies make sense in a world where the way employment and careers work now changes a lot in the next two to five years,” said Robert Seamans, an economist at New York University.
A Paradigm Shift
When OpenAI released ChatGPT to the public in November 2022, Alex Imas, an economist at the University of Chicago, did not necessarily see it as an economic game changer, he said.
The technology was powerful but limited, prone to mistakes and incapable of producing work with the quality and consistency necessary for most professional applications.
“I knew it was important, but I was definitely on the more skeptical side when it first came out,” Mr.
Imas recalled.
For Mr.
Imas, the real shift came in late 2024, when OpenAI released a model capable of “reasoning,” meaning it could work through a question step by step before producing an answer.
That ability greatly expanded the type of problems the model could tackle, and made it more reliable at solving them.
“It was just a paradigm shift for me,” Mr.
Imas said.
“And then I started thinking, ‘This is potentially an industrial revolution-scale event, if not more.’”
For other economists, the shift came just in the past few months, with the release of Claude Code — a tool from the A.I. company Anthropic that writes computer code from users’ prompts — and the widespread rollout of A.I. “agents,” autonomous systems capable of performing tasks directly.
Molly Kinder, a senior fellow at the Brookings Institution who studies A.I., said that as she experimented with the new tools, she had a realization: She no longer needed anyone to do the kind of basic research that she ordinarily hired college students and recent graduates to perform — and that she had performed herself early in her career.
“I really don’t know anything a college student can bring to my team that Claude can’t do,” she said.
More senior jobs — ones that require interacting with clients and investors, or making strategic decisions — may be safe for now, she said.
But “if you can do your job locked in a closet with a computer, ultimately you’re going to be in trouble.”
Everywhere but the Statistics
Technological advancement alone will not reshape the economy.
For that to happen, companies need to adopt the tools and figure out how to use them productively.
History shows that the process almost always takes longer than the inventors expect.
Legal and regulatory hurdles slow things down.
Companies have to retrain workers or hire new ones.
Corporate leaders have to develop new processes and overcome resistance from reluctant managers and cautious information technology departments.
“These conversations have been, in my opinion, overly focused on what the technology can do,” said Martha Gimbel, the executive director of the Budget Lab at Yale University.
“There’s plenty of technology that could have changed things and didn’t.”
Many hospitals kept patients’ health records on paper for decades after the technology existed to digitize them, Ms.
Gimbel noted.
Videoconferencing tools have existed for years, but it took a pandemic to force companies to embrace them.
There are signs that A.I. could flow through the economy more quickly than past innovations.
Already, nearly one in five companies reports having used A.I. in the last two weeks, according to data from the Census Bureau, and in some industries the rate is twice as high.
Workers report using A.I. at even higher rates, suggesting many may be experimenting with the tools on their own initiative.
And while A.I. has not yet had a big impact on aggregate statistics, some economists argue its effects are visible beneath the surface.
In a paper published last year, researchers at Stanford University found that employment was declining for entry-level workers in jobs that were highly exposed to A.I.
Technological advancements “sometimes take decades” to appear in the economy in the form of increased productivity, said Erik Brynjolfsson, one of the authors of the Stanford paper.
“I don’t think it’s going to be decades this time.”
‘How Painful Is It Going to Be?’
Mr.
Brynjolfsson stands out among economists for his confidence in A.I.’s impact.
But his forecasts look sober compared with many coming out of Silicon Valley.
Dario Amodei, the head of Anthropic, has warned that A.I. could eliminate 50 percent of entry-level white-collar jobs within years.
The tech investor Vinod Khosla predicted last year that A.I. would replace 80 percent of jobs by 2030.
Elon Musk has said the technology will render work “optional.”
Many economists dismiss such predictions, arguing that the A.I. debate should focus less on where the economy will wind up in the end and more on the potentially difficult period of transition.
“The pressing question is, ‘You’re going to have a technological shock — how painful is it going to be?’”
said Ms.
Gimbel of the Yale Budget Lab.
The spread of A.I. does not have to mean large-scale job losses, economists argue.
As much as 70 percent of jobs, by some estimates, are in some way exposed to A.I.
But that does not necessarily mean those workers are about to be laid off.
In a report published on Friday, researchers at Boston Consulting Group estimated that more than half of the jobs in the United States would be “reshaped” by artificial intelligence over the next two to three years but that far fewer would be replaced entirely.
Most workers perform a range of tasks in their jobs, only some of which can be done reliably by A.I.
And even where it may be possible to replace a worker, companies are proceeding cautiously because the stakes are higher if humans are no longer signing off on the computer’s work.
“What we’re actually seeing is that full-scale replacement of jobs is much, much slower because the implementation is harder,” said Greg Emerson, the report’s lead author.
“Whereas the augmentation and the reshaping of jobs is happening much, much faster.”
Still, A.I. will almost certainly cause job losses in specific industries as companies adapt.
How painful that transition turns out to be, economists say, depends on two factors: speed and breadth.
If the A.I. revolution plays out gradually, it will give workers time to adapt.
Older workers can finish out careers, while younger ones can learn relevant skills or change careers entirely.
If A.I.’s impact is limited to certain sectors, that will make it easier for workers to find opportunities in other parts of the economy.
But a broad, rapid change will give workers little time to adapt, and few places to hide.
“If speed is slow, then you have time for employment to adjust, for new roles to be created,” said Mr.
Imas, the University of Chicago economist.
“There’s disruption, but not something we haven’t seen before.
But if it’s fast, you can get really wacky things start happening.”
How to Prepare
However A.I. affects the labor market, economists say policymakers should act now to modernize programs that could help displaced workers.
The unemployment insurance system, for example, excludes many of the new graduates who are likely to be hit first by A.I.
Retraining programs are often slow-moving and poorly funded.
But some economists worry that such tools are not up to the challenge.
“In the past, our social safety net was designed to help people over transitory shocks,” said Anton Korinek, an economist at the University of Virginia.
“This one might actually be a more permanent shock.”
Mr.
Korinek was an early convert to the idea that A.I. could prove to be a uniquely transformative technology.
He remains an outlier among his peers in his willingness to consider more extreme scenarios, such as the possibility that A.I. becomes better than humans at every task.
Many economists shy away from such discussions, Mr.
Korinek said, an impulse he called “emotionally understandable but practically a really bad idea.”
“As economists, part of our job is to worry about what are the biggest risks,” he said.
“What could cause disruptions, and how should we prepare for those disruptions?”
Mr.
Korinek will continue to make those arguments, but not from an academic perch.
At the end of the semester, he will take a leave from the University of Virginia to join Anthropic.
**Jobs and workers are in balance.
Nobody is happy about it.
**
In a healthy labor market, enough jobs are being created to soak up all the new people looking for work.
But what if those numbers are essentially zilch?
That’s the conundrum facing Federal Reserve officials, as they eye employment reports that have registered in the red for five of the last 12 months.
The economy has added 156,000 jobs over the past year, the slowest pace since the Covid-19 pandemic and, before that, the aftermath of the financial crisis.
The rate of hiring has fallen to lows from April 2020 and early 2010.
And yet, in contrast to those economic cataclysms, the jobless are not lining up at unemployment offices.
Because of President Trump’s hard turn toward deportations and clampdown on legal immigration channels, there just aren’t that many new job seekers .
“You’ve got a sort of a zero employment growth equilibrium,” said Jerome H.
Powell, the Fed’s chair, at the central bank’s meeting last month.
“Now that’s balance, OK, but I would say it does have a feel of downside risk, and it’s not kind of a really comfortable balance.”
The unease reflects the unfamiliar nature of a no-growth U.S. job market .
The labor force has slowed down before, including during the Great Recession, when many immigrants who had come for construction jobs during the housing boom left after those opportunities evaporated.
Their departures served as something of a safety valve , preventing unemployment from rising even higher.
But labor force growth has never come to such a standstill outside that kind of downturn.
And it is accelerating the reality that now faces many developed countries: As birthrates dip, the working-age population flatlines and may shrink, unless foreigners come in to refresh it.
The United States was supposed to reach that point a few decades hence.
Now, it’s already here .
“There is so much angst about the state of the economy right now, and that’s because it’s so different from what we’ve seen in recent decades,” said Luke Pardue, policy director at the Aspen Institute’s Economic Strategy Group.
“What we’re seeing right now is a strong hint of what we will see in the future given the current and projected demographic trends.”
The new equilibrium creates some challenges.
Surmounting them — if the federal government remains committed to keeping foreigners out — would require some very focused effort.
Harder Questions
As long as a country has basic preconditions for prosperity, like a functional government and universal education system, moderate population growth is a tailwind for living standards.
More people mean more customers for goods and services, more available workers to execute on good ideas and more opportunities to move around and grow.
Think about the economy as a company.
If it’s growing, employees have an easier time moving to different roles as they learn and try new things, since the firm is able to backfill what they were doing before.
When the business stays the same size, it’s harder to maintain that trajectory, and workers may not fulfill their potential.
It’s possible to maintain a certain amount of churn and dynamism without adding workers; it’s just more difficult.
One person moving out of a position to take another job leaves a vacancy that may be tough to fill.
“For these big developed economies that have relatively stagnant populations, it makes all these trade-offs way more tangible,” said Dietrich Vollrath, a professor of economics at the University of Houston.
“You very much have to make choices that some places are going to shrink and do worse, and some places are going to do better.
The growing, expanding population allows you to skip past the hard questions.”
At the same time, the composition of the labor force is changing, adding more people in their 50s and 60s while fewer 20-somethings are getting started.
Although age brings some benefits, such as knowledge and experience, older people tend to be less likely to take the kinds of risks that create new ideas and businesses.
They also are less well equipped for physical jobs, like nursing and construction.
Also, as workers retire, that labor force has to support a larger nonworking population.
That creates two problems.
One, Social Security is designed around adding taxpayers faster than they age out of the system.
The equation has also long depended on immigrants, who typically contribute payroll taxes and rarely get benefits in return.
Slowing immigration has already moved up the date by which Social Security will become insolvent, which would force benefit cuts, tax increases or both.
And two, older people consume far more health care, which is inherently labor intensive.
The sector is already essentially the only source of employment growth , and probably could be growing faster if there were enough qualified workers.
With a constrained labor force, satisfying health care demand means that some other part of the economy will need to make do with less.
Finally, for both businesses and policymakers, there is something psychologically unnerving to the number zero.
When the economy isn’t creating more jobs, employers may worry that people will have less disposable income, and start to shrink their own payrolls in anticipation.
“Does Walmart say, ‘We have less demand in our stores — let’s extrapolate that out and assume we’re going to have less demand in 2026 than in 2025, and we’re going to build less, hire less , expand less’?”
said Wendy Edelberg, a former chief economist at the Congressional Budget Office.
“All of that can create its own momentum for a downturn.”
Wealth Without Growth?
A flatlining population is by no means an economic death sentence.
Plenty of countries are already dealing with it.
The prototypical example is Japan, where even though the population has been sinking since 2008, the labor force has been rebounding after a concerted effort to help women stay employed with more robust child care and parental leave.
Older people are working longer as well.
When humans aren’t available, robots fill many menial positions, like making coffee and stocking shelves.
Another policy lever that can help places with low or negative population growth is helping people retrain and find new positions quickly if they lose a job.
The United States spends far less as a share of its economic output on these “active labor market policies” than other wealthy nations, and might benefit from trying a bit harder to keep people in productive employment.
Continuous education also helps make workers as productive as they can be, compensating for losses in manpower.
Perhaps the best way to maintain a healthy economy, even as work force growth slows, is to make sure prosperity is widely shared, with high minimum wages and adequate health care.
If people on the low end of the income spectrum are able to go to the movies and remodel their homes, money keeps circulating and creating the demand for new goods and services.
Other countries with stable or shrinking populations, including Japan as well as Scandinavian nations, have much lower rates of inequality than in the United States.
“Distribution can be an element that drives growth, because it spreads out and creates a larger market,” Mr.
Vollrath of the University of Houston said.
People starting businesses want to know if there are enough customers with the wherewithal to buy what they’re selling.
“We all benefit from that,” he said.
“A more equitable distribution can create some scale for us that didn’t exist before.”
But the easiest policy fix is one that America is currently rejecting: Allow more immigration.
It’s not just the size and the age structure of the work force that matter.
New arrivals have historically been willing to take jobs that native-born workers haven’t wanted because — with the benefits of language and cultural fluency — they have better options.
In that way, immigrants are like complementary ingredients in a recipe: If you don’t have enough sugar, you can’t make as many pies as you’d like, so you use less flour.
Natural experiments have buttressed this conclusion.
In 2021 and 2022, U.S. companies that missed out on getting visas for seasonal workers saw reduced revenues and employed fewer native-born workers.
And in South Korea, when a migrant worker program was suspended during the pandemic, companies went out of business and wages for Korean workers fell.
“It’s not like you take away the migrant worker and you can replace them with a native worker,” said Charles Kenny, a senior fellow at the Center for Global Development who has argued that wealthy countries should welcome more migrants .
“Really what happens is the business closes down.”
This recipe math is accentuated by the potential dislocation of artificial intelligence, which appears very likely to destroy desk jobs for which there is no shortage of native-born workers.
The occupations that have depended the most on immigrants, like home health care and landscaping, will scarcely be affected.
That’s why some countries without a long tradition of integrating people from many other places have stepped up their efforts to recruit immigrants, if not as full citizens, at least to supplement their labor forces.
That includes Japan as well as Italy, where even as the conservative premier, Giorgia Meloni, battles unauthorized migrants on land and on sea, she has quietly opened the door to 500,000 foreigners to work on farms, as caretakers for older people and in other essential settings.
“You have to balance the social and political implications against the economic need,” said Lant Pritchett, a professor at the London School of Economics who has studied ways to make migration more palatable in destination countries.
“Even a right-wing government who came to power on the premise that it was anti-immigrant realized that you can’t be anti-worker.”
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