Tight Labor Markets are Good for Americans

Member Group : Jerry Shenk


The best social policy for lifting people out of poverty is a good job.

A “good” job is any job that allows workers to earn (even modest) money while gaining workplace experience, building resumes and qualifying for better paying jobs.

America’s current 3.8 percent unemployment rate has created the best imaginable social policy — a tight labor market in which citizens who are normally less-attractive to employers and on whom taxpayers spend $billions annually become attractive employment candidates. In a robust economy, worker shortages mean employers must hustle to recruit less-skilled workers and train them, and, to attract or retain more-experienced workers already in the job market, employers must offer higher wages and better benefits.

But the 3.8 percent unemployment rate is misleading. The drop in the official unemployment rate only reflects that fewer people were actively looking for work. The number of working-age Americans who are not in the labor force — neither working nor looking for work — rose from 21 percent in 2000 to nearly 25 percent in 2018. In the first quarter, there were more than 50 million working-age Americans not counted in the labor force. And another 5 million–plus are working part-time but prefer full-time jobs.

Business claims that they’ve run out of potential workers are simply untrue. The record number of working-age people who are not currently measured in the unemployment rate and the numbers who would accept full-time work represent two additional labor pools upon which American employers can draw.

The question, then, is will they? Not if America’s biggest shill for immigration “reform” has anything to say about it.

The U.S. Chamber of Commerce, the nation’s largest, most-influential business lobby, has been lobbying Congress to grant legal status to a million illegally-employed illegal immigrants, claiming the job market is so hot that America can’t risk losing them.

The Chamber also opposes proposals to cut future immigration levels as “devastating to our economy,” as well as any plan to reduce future levels of legal immigration, even though the tight labor market would help American workers by forcing businesses to compete for them, while raising wages and benefits. The Chamber has always advocated the easier, cheaper “solution” to meeting manpower requirements

How can workers who’ve dropped out be drawn back into the labor force?

For openers, we can make it harder to get by without a job. Enacting a work requirement for able-bodied Americans to receive food stamps and public welfare would be a positive step, as would reforms to America’s easily-abused disability system. But the best way to pull people into the work force is to make jobs more attractive. The key to doing that is to keep the labor market tight. If America controls immigration, increases worksite E-Verify enforcement, and limits guest-worker programs, American workers will benefit.

Arkansas Senator Tom Cotton recently tweeted: “Tight labor markets = higher wages for working-class Americans. A key reason to get immigration levels under control.”

Cotton is spot on. American workers should come first.