Little-Big Businessmen Cry ‘Labor Shortage’

Published on April 11th, 2014

We all remember the story of the Little Boy who cried “wolf” when there was no wolf around. Today, we have a similar tale: the Little-Big Businessmen who cry “labor shortage.”

Actually these types have been around for quite some time. In the past they cried “labor shortage” when Congress was trying to abolish child labor, and they proclaimed it when Congress proposed and enacted significant cuts in immigration in the 1920s.

In those instances, the “shortages” were wolves without a bite. The economy didn’t grind to a halt because kids couldn’t work. And it didn’t collapse when immigration declined. In fact, over the long run, the economy prospered and workers’ wages rose.

Sadly, that lesson is all but forgotten as the Little-Big Businessmen cry shortage again. In the middle-class fields of high tech they claim shortages and demand more foreign workers. Strangely, the wage levels in tech fields aren’t rising, which one would expect if there were truly a shortage. This is something a lot of Americans have noticed, especially the numerous citizens with tech skills who can’t find employment.

With low-wage workers, the fast food industry generates hefty profits.

At the same time, other Little-Big Businessmen cry shortage in unskilled fields too. The U.S. Chamber of Commerce claims that we just don’t have enough Americans with limited skills and education. So evidently we need to import more high school dropouts or people with no more than a high school degree.

Well, not so fast. We have plenty of people in those two categories already, specifically about 4.5 million of working age who are officially counted as unemployed and 22.8 million more who are not in the labor market at all. These figures don’t include all teenagers, who as a group have more trouble finding work now than ever before. This prevents them from developing the work habits they will need to do jobs as adults.

Instead of crying “shortage,” our Little-Big Businessmen might consider raising wages to attract more workers. One example would be in the fast food industry where low-wage workers provide hefty profits for CEOs. But far be it from the shortage criers to consider that solution. They claim the right, in the name of “free enterprise,” to bring in as many low-skilled foreigners as possible.

Such enterprise, however, is free for some and not for others. As commentator David Frum points out, “More immigrants mean more people who will need social assistance. More than one-fourth of the pre-Obama uninsured were foreign-born. Low-wage immigrants need Medicaid, Earned Income Tax Credits, Section 8 housing vouchers, and school lunches for their children.” In other words, the taxpayers will have to subsidize the cheap labor profits of the employers.

Claims of labor shortages seem odd when nearly 13 percent of American workers can’t find full-time employment. And the situation could get much worse, if a recent study at Oxford University is correct in predicting that almost half of America’s jobs will be automated within the next 20 years.

In the tale of the Little Boy who cried “wolf,” a real wolf did appear after the boy’s many false warnings. A real labor shortage is far less likely.

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