President Trump on Thursday unveiled his immigration reform plan, which calls for trading more economic immigrants for fewer family ones. The plan, which is the brainchild of presidential advisor Jared Kushner, fails to deliver what the economy desperately needs: more immigration. The plan does not touch overall immigration levels.
Consider the labor market, which is a job creation machine that is desperate for new workers. This month, the Labor Department announced that the unemployment rate fell to a 50 year low of 3.6 percent. The unemployment rate hasn’t been this low since The Beatles released “Abbey Road.” Given the natural churn in the labor market, this unemployment rate means the country is enjoying essentially full employment.
Low unemployment rates extend to all demographics. The unemployment rates for young, black, and non-diploma holding workers, supposedly groups who have been hurt by immigration, are also near historic lows. Don’t expect a mea culpa from all those restrictionist commentators who shed crocodile tears over the plight of the black worker competing with immigrants. They’re doing just fine, thank you.
This month, the Labor Department also announced that there are a record 7.5 million available jobs in this country. That’s more than the number of unemployed Americans plus those discouraged from looking for work. This labor shortage will only grow as the busy summer work season begins. Businesses across the country are being forced to operate at below capacity due to a lack of workers. This artificially reduces economic growth and standards of living.
This week, the Center for Disease Control announced that the American birthrate has fallen to an all-time low of 1.7 birth per woman — well below the 2.1 replacement rate. The U.S. cannot produce the population to sustain itself and the world’s greatest economy without more immigration.
Last month, the Social Security trustees revealed that the Social Security trust fund will deplete by 2035, at which point retirees will have to take a significant cut in benefits. Driving Social Security’s insolvency is the shrinking ratio of workers to retirees. In 1960, the ratio was 5-to-1; by 2035, it will fall to about 2-to-1. More immigrant workers are needed to make the program solvent.
Immigration restrictionists contend that more immigration will reduce wages. For instance, Arkansas Sen. Tom Cotton, who’s sponsored legislation to halve legal immigration, claims immigration “forces Americans to compete for jobs against non-citizens who drag down wages … [by] encouraging a race to the bottom by importing low-cost labor.”
This seems to make sense. But this argument overlooks that at certain wage rates, some jobs just aren’t economical to exist at all. Ever wonder why there’s no longer busboys, bag boys, movie ushers, hostesses, full-serve gas stations, Walmart greeters, etc.? Because at the wages these jobs now command, they’re no longer economical. They don’t bring in enough profit relative to their cost. So they don’t exist at all.
While the left-wing media implies otherwise, most businesses operate on thin profit margins. Many cannot raise wages and remain profitable. Couldn’t these companies just raise their prices to compensate for higher wages? It’s often not that easy. There’s only so much consumers will pay for a watermelon or landscaping. In countries with stringent immigration rules, the products that rely on immigrant labor — like watermelons in Japan — sell at many multiples of their price in the U.S. Though it’s uncouth to say: protecting cheap consumer prices is just as important for ordinary Americans’ wellbeing as raising wages.
Yet the whole immigration-to-wage relationship is breaking down. Wages are growing at their fastest pace in a decade. Wages for blue-collar workers are rising even faster. And wages for the bottom ten percent of workers are growing twice as fast as average. In short, there just doesn’t seem to be much of a correlation between immigration and wage growth, despite what restrictionists repeatedly claim.
President Trump’s underwhelming immigration plan is unlikely to go anywhere in the Democratic-controlled House of Representatives. This is a missed opportunity for bipartisanship from a president who claims he wants legal immigrants coming in their “largest numbers ever.” That’s what this plan and the country need.
Jordan Bruneau is an immigration policy analyst in Los Angeles.
