Ever since Jeff Sessions decamped for the Justice Department, [Sen.] Tom Cotton [has been] a hard-liner’s hard liner . . . he . . . wants to slash legal immigrant in half. . . . [But] the economic case for halving legal immigration doesn’t make any sense. . . as the following tweet amply demonstrates.
Tom Cotton: Tight labor markets = higher wages for working-class Americans. A key reason to get immigration levels under control. Unemployment may fall to 3.5% this year. The job market is becoming so tight that employers are being forced to cough up wage increases. . . .
So, Cotton’s suggestion that we need to slash immigration to tighten up labor markets is facially bizarre: Our economy is demonstrably capable of producing tight labor markets and record-high immigration. . . the labor market cannot get significantly tighter. – Tom Cotton Doesn’t Oppose Mass Immigration for Economic Reasons, New York Magazine, Eric Levitz, 2/2/18. [Link]
Fact Check: This article rests on the assumption that our labor market really is “tight,” i.e., we have a very low rate of unemployment with employers looking hard to attract workers. The official rate is indeed only 4.1 percent. The problem is that it does not reveal the reality of unemployment.
Economist Paul Craig Roberts, a former assistant secretary of the Treasury for economic policy, notes that “If you have not looked for a job in the past four weeks, you are not counted as being unemployed, because you are not counted as being part of the work force. When there are no jobs to be found, job seekers become discouraged and cease looking for jobs. In other words, the 4.1 percent unemployment rate does not count discouraged workers who cannot find jobs.”
The official figure also counts people as being employed even if they can’t find full-time employment and have to settle for typically low-paying part-time jobs. They can work for only one hour a week and still be counted as employed. Adding them with workers who have not looked for work during the past four weeks but have done so during the past year, the total of unemployment comes to 8.2 percent. The total would be higher if potential workers who have not found work for longer than a year were counted.
Recent economic reports proclaim the creation of many new jobs. However, as Roberts observes, many of these jobs ae low-paying. If the job market were truly tight, he maintains, wages would be rising more than they are. Another point to keep in mind is that most of the newly created jobs have gone to immigrants.
The job market still has plenty of potential for tightening. And an excellent way to do that is a sharp reduction of mass immigration.