Continued Weak Labor Market Underlines Need for Immigration Reduction

By Joe Guzzardi
August 10, 2015

The July Bureau of Labor Statistics report provided its usual lukewarm picture of the jobs market. The monthly reports are so predictable that even casual observers could write them in advance. Officially, the economy added 215,000 jobs and the unemployment rate remained steady at 5.3 percent. Most of the employment gains were in part-time, low-paying positions.

About 93 million Americans are detached from the labor force. The more deeply analysts probe, the grimmer the economy’s picture grows. The alternative U-6 unemployment rate—a truer indicator of the nation’s unemployment rate because it factors in the underemployed and those who have given up hope of finding a job and stopped looking—was 10.4 percent; black unemployment, 9.1 percent; black teen unemployment, 28.7 percent, Hispanic unemployment, 6.8 percent. Women abandoned the labor market in droves. In July, about 124,000 women gave up looking which put the total numbers of women out of the workforce at 56 million. Put those dismal facts together, and the net result is a 62.8 percent labor force participation rate, the lowest in 38 years.

The Economic Policy Institute’s invaluable research provided more insightful data about what’s really going on vis-à-vis jobs. Studying the patterns among prime age, 25 to 54 year-olds, EPI found that the labor participation rate for Americans during their peak employment years fell to 77.1 percent. EPI wrote that this represents a “terrible new normal for the economy, for the American people.”

In a separate study, EPI bemoaned relentless wage stagnation. Over the year, average hourly earnings rose only 2.1 percent, consistent with the same slow growth American have suffered through for the last six years. Wages for production/nonsupervisory workers rose even more slowly, at 1.8 percent over the year.

Experts consider many variables that contribute to the dismal job market, but they persistently ignore the effect of continued high immigration. During the recent GOP debate, the candidates addressed illegal immigration, but failed to make the connection between a million or more legal immigrants admitted each year, all authorized to work, and a depressed labor market.

Based on statistics included in the text of a Senate Subcommittee on Immigration and the National Interest report, the U.S. has issued about 5.5 million green cards to foreign nationals during the last five years, an average of 1.05 million permanent legal residents each year. All will receive lifetime work authorization, access to federal welfare, and Social Security numbers, as well as the right to petition their family members who will qualify for the same benefits.

Since 1970, the foreign-born population in the United States has increased more than four-fold to a record 42.1 million today. The foreign-born share of the population has risen from less than 1 in 21 in 1970, to nearly one in seven in 2015. Recent population increases from overseas prove the basic supply and demand theory: more available labor translates to lower wages.

Georgetown and Hebrew University economics professor Eric Gould noted that the last four decades have witnessed a dramatic change in the United States’ wage and employment structure. Gould points to evidence which shows that the decrease in manufacturing and increase in immigration has “hollowed-out the overall demand for middle-skilled workers in all sectors, while increasing the supply of workers in lower skilled jobs. Both phenomena are producing downward pressure on the relative wages of workers at the low end of the income distribution.”

Economists predict that job growth, especially in high-paying sectors, will be soft for years. For American workers and their families to survive, current immigration levels must be reduced so they can have an opportunity to land the few good jobs that may become available.

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Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. Contact him at [email protected]