Unemployment and Immigration

Something I frequently hear from those defending open borders is that now, more than ever, we need to import more labor because the unemployment rate is so low.  Keep in mind this is the excuse du jour.  Even when unemployment is rising they’ll give several other equally silly excuses as to why we need to import more help (my favorite – “they do the jobs we won’t do”).

The reality is that even though the U.S. unemployment rate slid to an 18 year low of 3.8% in May, this stat is completely obfuscated.  Per MarketWatch:

The official jobless rate, known as U3, only includes people who don’t have a job but have looked for one in the past month. The result is that millions of Americans who want to work are actually left out of the official figure, potentially making the labor market look healthier than it really is.

By contrast, the “real” unemployment rate also includes part-time employees who want to work full time as well as people who haven’t looked recently but are willing to work. It’s typically a lot higher.

This “real” unemployment rate, while arguably still not the most honest figure, is still much more telling than the one that is constantly cited.  It could be as high as 21.5%.

U6.JPG

It peaked at around 17.5% in 2010 and has been steadily dropping ever since, but is still more than twice the U3 rate which is the one most people hear about.  So the next time someone is lecturing you on why we need to import more unskilled labor calmly remind them that while President Trump has done a lot to improve the job market situation there are still plenty of Americans out there actively looking for work, or in the case of part time workers, better full time jobs.  The more of these jobs that are filled, the higher the wages will continue to rise, so long as we fill them with legal workers.  We’re already seeing this effect, as is the case at a Sacramento Chick-Fil-A, which will be raising their hourly wage to somewhere in the $17-18/hr range to try and reduce costly turnover.

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