In June, number of working-age Americans WITHOUT a job GREW.

THIS ISSUE: Labor shortages? In June, number of working-age Americans WITHOUT a job GREW.

FRI, JUL 6th

The Bureau of Labor Statistics this morning released monthly reports showing increases in jobs and employment. But although the number of employed persons rose in June by 102,000, the number of working-age persons without a job rose even more.

As often noted on this website, job creation must keep pace with the growth of the working-age population. The total working-age population in the United States grew by 188,000 in June. Thus, the number of persons without a job appears to have grown by more than the number of new persons obtaining jobs. So, while it is true that there is a record number of people working in the United States, it is also true that there is a record number of people not working.

This inability of new employment to keep up with population growth (primarily fueled by immigration) paints a far different picture than that commonly portrayed in the news media which provides ample space to employers complaining about labor shortages. Given the lingering effects of the Great Recession, job creation is going to have to occur at two to three times its current rate for the U.S economy to be considered genuinely “healthy.”

Working-age population increasing faster than employment is a long-term trend extending back to the 1970s, and the reason NumbersUSA argues for a reduction in overall immigration levels. Immigration is driving U.S. population growth at a faster rate than the economy can produce jobs, resulting in growing unemployment, underemployment, and stagnant wages.

Henry Olsen at the Ethics and Public Policy Center points out that:

“Since there are about 126 million 25-54 year olds, that means we need to create another 1.3-2 million jobs above trend just to return the labor market to full employment status….Until that happens, we should expect labor compensation hikes to remain lower than focus just on the unemployment rate might suggest. There are still lots of people who can be attracted to work — and that’s assuming no increase in legal or illegal immigration.”

There are bright spots in the economic data. While the official unemployment rate has ticked back up to 4.0%, this is due to more Americans seeking work, which means the government again counts them as part of the labor force. There has been steady growth in manufacturing jobs, and indications that employers are increasingly investing in recruitment and retention strategies.

Given the improving (if only slightly) situation for American workers, and a President who has indicated his willingness to eliminate the visa lottery and chain migration categories, there is no good reason for Congress not to take action. And there is no good reason for the Trump Administration not to also push for mandatory E-Verify.

It was very disappointing to see Speaker Paul Ryan sabotage the effort to pass the Securing America’s Future Act of 2018 (H.R. 4760). Still, the bill nearly passed, unlike Ryan’s own immigration bill, which went down in flames. While we’re not celebrating almost passing a bill through the House, the business lobby complaint that there is an “critical labor shortage” in the United States doesn’t seem to have the same clout on the Hill as it once did. That’s encouraging.

Many employers have gotten used to the fact that the United States hands out one million lifetime work permits, and brings in hundreds of thousands of additional guest workers, every year. They will continue to press Congress not to make any reductions, and will even lobby for increases, in order to depress wages and working conditions for Americans.

Jared Bernstein, the former chief economic advisor to Vice-President Biden, was spot-on in his assessment of the June jobs numbers. He called it a “solid report” but given the slack that still remains in the labor market and no real wage gains, Bernstein says “A lot of working people are legitimately asking when they [will] start to get ahead.”

That’s a question working Americans should be asking Paul Ryan and Congressional leaders.

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