Is There Really a Labor Shortage? Policy Expert Says "No"

Is There Really a Labor Shortage? Policy Expert Says "No"

One of the biggest arguments in favor of mass immigration – whether of the legal or illegal variety – is that we need the workers.

You’ve probably heard claims such as, “We need more workers,” or, “Immigrants do jobs Americans won’t do.”

A recent article by American Compass CEO Oren Cass in The Atlantic magazine takes these arguments on, making the case that a labor “shortage” is actually a good thing.

Cass begins the piece by referring to an official report claiming the unemployment rate is at nearly the lowest level in 70 years.

But rather than being considered good news, the people who run our country don’t like it.

The business community reportedly “counts on a surplus of available workers to keep wages down.”

Federal Reserve Chairman Jerome Powell associates low unemployment with high inflation.

The GOP? “Republicans in several states have introduced legislation to loosen child-labor restrictions as a way to expand the labor supply.”

The executive branch? “The Biden administration… seems to agree that low unemployment poses a problem, and to see immigration as an answer.”

According to Secretary of Homeland Security Alejandro Mayorkas, “there are businesses around this country that are desperate for workers.”

Mayorkas asserts there are “desperate workers in foreign countries that are looking for jobs in the United States.”

Cass responds, “Apparently, our own workers aren’t desperate enough.”

Over the past 50 years, as both parties supported the entry of millions of unskilled immigrants and the offshoring of entire industries, America’s per capita gross domestic product more than doubled after adjusting for inflation. Productivity of labor rose by a similar amount, and corporate profits per capita nearly tripled. Yet over the same time period, the average inflation-adjusted hourly earnings of the typical worker rose by less than 1 percent.”

Now, we hear about a labor shortage.

Cass’s solution: “If employers are struggling to find workers, they should offer better pay and conditions. If that comes at the expense of some profits, or requires some prices to rise, well, that’s how markets are supposed to work.”

As the article explains, “The notion of a ‘labor shortage’ in a market economy presents something of a puzzle. The basic principle of supply and demand suggests that, if employers can’t find enough workers, they’ll simply have to offer higher wages or better working conditions…When employers say there isn’t enough labor, what they really mean is that they can’t find enough people willing to work under the terms that they want to offer—and that they're doing a poor job increasing productivity with the workers they have.”

Cass points out, with historical examples, that employment rates don’t necessarily go hand in hand with inflation.

As for the argument that we fight inflation with immigration, it “finally acknowledges the reality… that unskilled immigrants suppress the wages of low-wage workers already here.”

Even, which wants to increase immigration, admits, “When labor is in short supply relative to demand, employers offer higher wages…”

There is plenty more in the Atlantic piece. I suggest you check it out for yourself.

Here’s how Oren Cass ends his excellent article:  “Gains in consumption and material living standards are good, but cheaper prices through lower wages is a losing proposition for working-class families and the nation as a whole.  The modern American economy has not failed with respect to the material standard of living. It has failed in the creation of insecure jobs that do not meet workers’ needs, a shift in the distribution of income that has left working families struggling, and a decay in social solidarity as the winners declare themselves the most valuable and the losers expendable. To reverse those trends, workers must have the power that comes from being needed.”

If our rulers really cared about Americans from the middle and working classes, they would shut down immigration - both legal and illegal - and allow wages to rise.

You can find more of Allan Wall's work at his website.


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