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There is no labor shortage in the U.S.

This position runs against conventional wisdom on this issue in the United States. Government figures tell us that unemployment is below five precent, statistically full employment. The economy is booming, so they say. Employers cry that they can't find workers.
But if you look behind all the press releases you'll find another story.

This is a fairly long article for a website. If you don't wish to plow through it, here are the high points, vastly oversimplified:

What used to be good-paying American jobs are being sent overseas at a terrible rate, with professional jobs going nearly as fast as they are being created. (And it's not going to stop.)
There is no general labor shortage in the U.S. (People are looking for jobs all over the place.)
There is not likely to be one in the foreseeable future. (Our birthrate and legal immigration alone are outstripping the creation of jobs in America.)
World population is growing at a faster rate than world job creation. (And those people will be looking to come here for a job, just as they do now.)
America's inattention to its immigration laws for forty years has allowed employers to become addicted to an endless stream of labor. (And that suppresses wages.)
American jobs should go to American workers first so they can pursue the American Dream. (Illegal aliens, or even legalized aliens should not be allowed to underbid them for it.)

The idea of granting amnesty to aliens who have broken the law by coming here illegally, or staying illegally, is based on several factors. One of them is that we need them, that they are an indispensable part of the economy, and that they do work Americans won't do.

The last part of that, "work Americans won't do", is at best a statement made in woeful ignorance. Or, at worst, it is an outright lie, knowingly told in order to persuade people we can't survive economically without easy access to an endless supply of labor. It is a contemptible thing to say, disrespectful to the millions of Americans who still do that work when they are allowed to, and who would again.

NAFBPO believes that in either case the truth is this: consciously or unconsciously, employers want an oversupply of labor because it makes their jobs easier to manage and more profitable. That's simple economics, and no one at NAFBPO blames them for it. However, the government (which makes and enforces immigration laws) has a duty that extends beyond making life easier just for employers.

There is no general labor shortage in the United States, nor is there likely to be, and the government should not pass laws and make policy as though there were. Here are some sources that tell the story.

The magazine Chicago Business, in a story dated Jan. 25, 2006, said that when Wal-Mart posted ads for 325 positions at a new store in Oak Park, Illinois, that month twenty-five thousand (yes, twenty-five thousand) applicants showed up. The article quoted Chad Donath, the Chicago-area manager for Wal-Mart as saying that it was typical for there to be three to four thousand applicants for jobs at a Wal-Mart opening.

Stories like these abound. Now let's explore why these people find themselves seeking jobs.

The U.S. Bureau of Labor Statistics, Current Employment Statistics Survey for 2006 reports that the United States had only 1.9% more jobs in 2006 than in March 2001(the start of the last recession). Private sector jobs are up only 1.5%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%. Conclusion: the U.S. economy is not creating jobs like it has in the past, and it is not a short-term problem.

Motives?
We at NAFBPO do not view the American employer as a moneygrubbing slave-driver in a silk top hat cracking the whip over his downtrodden employees. As Calvin Coolidge said, "The business of America is business", and we would be nowhere without the millions of employers large and small whose efforts drive the economy. However . . .

Like anyone else, an employer responds to economic pressures, some of them meaning survival or not. One of those pressures is labor availability and costs. Without easy access to labor an employer has to bid for it against other employers, the bid taking the form of wages, benefits, and working conditions. When there is a shortage of labor his bid must go up - and vice-versa. So it is to his benefit to have an oversupply of labor available.

Offered this easy, profitable solution to his problem the employer is quick to grasp it and resists surrendering it. He'd be crazy not to. Since the mid-1970s the U.S. employer has benefitted from easy access to unskilled labor in the form of illegal aliens. He has become addicted to it and doesn't even recognize the addiction - after all, addiction is not a problem if you can afford it.

On January 19, 2006, Charles W. McMillion, President and Chief Economist of MBG Information Services, said in a guest editorial in Manufacturing News (Vol. 13, No. 2 Page 7), "The December jobs report confirms that since the bursting of the 1990s financial bubble the United States has faced the slowest job creation on records going back to 1939. Indeed, because jobs lost paid for more hours worked per week than did the newly created jobs, the country ended 2005 with fewer private-sector hours worked than it had in January 2001. This five-year loss of private sector hours worked is the first on record for the private sector and the worst recorded for the entire labor force."
See the article here.

That continued a trend McMillion had previously testified to before the Senate Democratic Policy Committee on November 14, 2003. He said then, "After 23 months of most recoveries, the economy has produced 5-6% job growth - about 7 million jobs with today's labor force. Even during the jobless recovery of 1991-'92, the economy had added 1.4 million new jobs by now. But through October, we still had 768,000 fewer jobs than when the recovery began; 2.3 million fewer than when President Bush took office. In the private sector, we now have 919,000 fewer jobs than when the recovery started; 2,956,000 fewer than when President Bush entered office."

So, we see that job creation is lagging, but the supply of labor is not. That is proven by the following sad fact.

"For low- and middle-wage workers, as well as those with a high school degree, real wages fell last year by 1%-2%. Those at the top of the wage scale experienced marginal gains, and real wages were essentially unchanged for college graduates." That is from an article in Job Watch, a publication of the Economic Policy Institute, dated January 27, 2006.
See the article here.

This figure is for 2005, but it reflects a trend that has gone on for at least a decade. Generally speaking, across the board, real wages, measured in purchasing power, have fallen. Declining wages do not reflect a shortage of labor.

Outsourcing hurts!
Amnesty and the supply of labor must be examined within the framework of a globalized economy. High-paying U.S. jobs are going overseas as fast as they are being created, leaving lower-paying jobs here.

Those remaining jobs are precious. And who's competing with Americans for those jobs?
Click here to read more.

Why is this happening? Why do thousands of people apply for just a few jobs at places like Wal-Mart and McDonald's if there is such a need for workers? Why have wages declined when they should have gone up in response to demand for labor?

David Oppendahl, in an article in the Chicago Fed Letter (a publication of the Federal Reserve Board) for July, 2000, wrote, "The influx of less skilled immigrant workers may be one factor contributing to lower relative wages for less educated workers. For instance, some researchers contend that "almost half of the 10.9 percentage point decline in the relative wage of high school dropouts observed between 1980 and 1995 can be attributed to immigration." (George J. Bolas, 2000, Issues in the Economics of Immigration, University of Chicago Press, p.6.)
See the article here.

We at NAFBPO note that the number of illegal aliens in the United States has increased tremendously since the article was written nearly seven years ago. And so have the problems they bring, particularly competition for jobs.

The following quote tells only a part of the story in that it discusses only the presence of Latinos, not the other millions of illegal aliens from countries other than Mexico and Central America. The other nationalities have no less impact (and sometimes more) than Latinos.

March 7, 2006, United Press International, datelined Washington, D.C. "Latinos make up 13.6 percent of the U.S. employment population, but accounted for 36.7 percent of the 2006 U.S. employment growth, a study showed Wednesday. Undocumented immigrants accounted for about two-thirds of the increase in recently arrived Hispanic workers, the center estimated."
(See the article here.)

In other words, illegal aliens are taking a disproportionate share of the jobs being created. The huge number of illegal aliens (primarily Latinos) expands the pool of available labor and thus depresses wages and working conditions. Their impact would be no less if they were granted amnesty and made legal.

An article in the Seattle Times on September 17, 2006 covered the situation in more depth than one is accustomed to seeing on this subject in the media. The Times wrote, "Latino immigrants have become essential to builders at Issaquah Highlands and at other nonunion job sites across Puget Sound during the biggest wave in home construction in decades."

"Locally, many inspectors, construction foremen and union organizers estimate that in the last few years they have come to represent anywhere from half to 90 percent of the work force at residential job sites in the Puget Sound region. They dominate unskilled-labor crews and are prevalent among drywallers, framers, roofers and other semiskilled trades."

"And it's an open secret that many of these workers are here illegally."

The article went on to say, "Using census data, the Pew Hispanic Center, a nonpartisan research group in Washington, D.C., estimates that nationwide about one in five illegal residents works in construction — five times the number working in farm jobs."

And

"The laws of supply and demand dictate that average wages should rise during a labor shortage. But for three consecutive years — even as housing starts nationwide have risen — the average wage for construction workers, after adjusting for inflation, has fallen."

"Among the factors contributing to that trend, economists say, are increasing immigration and declining membership in labor unions."

Well, yes. More sweat available means lower pay for it.

And, it is not just that they take the jobs at a lower wage, but their presence gives an unfair advantage to the unscrupulous employers who hire them. That forces other, more ethical employers, to either pay their legal workers less, or to hire illegals who will take that wage. Or to go broke, of course. The Seatttle Times article addressed that.

"Further, some contractors complain that in the region's hot construction market, it's not uncommon for builders who hire illegal immigrants to undercut those who don't.

"Joe and Brenda Mailloux of West Seattle, owners of Drywall Wizards, started their business in the 1990s and paid union wages. By 2004, contractors who were hiring illegal immigrants were underbidding them often enough, they said, that they couldn't compete and had to lay off their employees."

That story is far from uncommon. The article continued with one of those blind admissions of motive by an employer that seem reasonable at first glance, but when examined, reveal a contemptuous attitude damaging to society.

"That said, many contractors are quick to praise immigrant workers", said the Times.

"They work harder than most of the white guys I know, and they're willing to take less money," said Tommy Johnson, a superintendent for Kirkland-based Spartan Concrete, which is building parking garages below condominiums at Issaquah Highlands."
See the article here

Yes, indeed. Mr. Johnson doesn't think much of American workers - they are apparently not willing to work as hard as he'd like for as little money as he would like to pay. American workers have struggled for over a century to overcome attitudes like that. No wonder Americans are questioning whether or not the American dream is still achievable.

The situation has expanded far beyond just construction labor. Even the skilled trades are suffering the impact now. The following quote is from an article by Patrick McGee of the Seattle Times on November 12, 2006. The article centers on the belief by some employers that there is an impending labor shortage, but it cites contrary views.

"Stephen Anthony, president of the Fort Worth Building and Construction Trades Council, a network of union groups, said illegal immigrant welders have kept wages down for U.S. workers. Union welders earn $23 an hour, while nonunion welders generally earn about $12 an hour in the Fort Worth area, he said."

"We have a problem with illegals working for cheap because it knocks down on our higher pay," he said. "They have put the cement workers out of business, the roofers out of business. ... There's no longer people trained in America that are doing that work."
See the article here.

Mr. Anthony is up against the same thing that finally broke the United Farm Workers. In the late 1970s and early 1980s Cesar Chavez led the UFW to a position from which it could negotiate on a level table with the California growers. Farm wages were increasing relative to other sectors of the economy (but were still far short of parity), and working conditions were approaching what one might hope to find in a modern nation.

But then – well, let Cesar Chavez tell it himself.
". . . employers go to Mexico and have unlimited, unrestricted use of illegal alien strikebreakers to break the strike."(Chavez testimony before the U.S. Senate. 1979. Committee on Labor and Human Resources. Farmworker Collective Bargaining. p.5.) For more information on this particular struggle, go here. where you will find a well-researched article.

Here, Mr. Anthony touches on a fundamental issue when he says that there are no longer trained people in American that are doing the work. The U.S. went through a period (is actually still in it, unfortunately) when we thought everyone had to go to college, that the job market would demand it. Trade schools, once an honorable education leading to a good job (read: The American Dream), have languished. Where they exist at all, they tend to be an educational afterthought. Unions, which had apprenticeship programs, have largely gone by the wayside.
The United States, the government, employers, and society at large, must realize that it has shot itself in the foot over the last forty years on this issue - we need skilled workers, and we need jobs for them. Instead, we have employers hiring illegal aliens, teaching them the minimum skills to get the job done, and sending them on their way when the job is over. Watch what happens in the coming year as construction companies lay workers off as the building bubble bursts.

The answer is for the government to land with both feet on employers who hire illegal aliens, but give meaningful tax breaks to those who will participate in job training for American workers, and then hire them. The presence of illegal aliens (and those given amnesty) is a tremendous subsidy to the employer, paid for by the taxpayer, and it costs the American worker more than he should have to pay. It must stop. Let's make sure Americans can reach the American Dream before we let foreigners buy it.

He understood where his problems were coming from. The UFW even instituted its own patrols along the border between California and Mexico to slow the influx of illegal aliens. (Hmmm . . . can you say "Minutemen"?)

The information shown here indicates that, far from there being a labor shortage in the U.S. there are ample numbers of people looking for jobs. What is in short supply is labor willing to work for less than a fair wage, a wage uncorrupted by the influx of labor over the last twenty-five years. This is but a small part of the information available on this subject, but it makes the point: Amnesty will hurt the American worker.

If you have come here from outside the NAFBPO website, click HERE to go to the main site.