River Dog wrote:What large labor pool? The labor market has cooled off some over the past 18 months, but there are still well over twice as many job openings as there are unemployed:
As of May 2024, the number of job openings is higher than its 2019 average—and not only because of population growth. When adjusted for the total demand for workers, there are still more job openings available as shown by the job openings rate.
The current unemployment level is also higher than its 2019 average but so is the unemployment rate. The net effects of relatively more job openings and relatively more unemployed persons essentially cancel each other out, causing the ratio to be the same as it was in 2019.
Second: Based on this measure, labor markets are still tight, much like they were in 2019—a year many economists consider to have been abnormally “hot.” In the 10 years prior, steady payroll growth had cut the unemployment rate to a historic low of 3.7% and job openings almost tripled. Together, these changes lifted the 2019 ratio much higher than the ratio immediately after the 2008 recession or at any other point in the history of the data series. While the unemployment level is now slightly higher than it was several years ago, the recent labor market hasn’t been weak by any historical comparison.https://fredblog.stlouisfed.org/2024/07 ... ent%20rate.
And relative to inflation, wages aren't low. Since Feb. of 2023, once the effects of the pandemic had subsided, they have consistently risen faster than the rate of inflation. As of March of 2024, wages were up 4.7% while inflation was up 3.5%.
https://www.statista.com/statistics/135 ... lation-us/Most industries still need workers. Immigrants not only perform work that native born Americans won't do, like picking apples and cutting asparagus, they tend to be younger, meaning that they have an overall positive effect on our social programs like SS and Medicare where the age demographics are so out of whack that it has led to a very low retiree to worker ratio.
While I don't like the Democrats' approach to border security, I certainly won't subscribe to Trump's insane proposal to use the National Guard hunt down and deport what he claims is 20 million illegal immigrants except those suspected of committing a felony. The dirty little secret is that illegal border crossings are way down. While I agree that we still have major problems at the southern border, it's being blown way out of proportion as it's a political hot button for so many people.
This is exactly what I'm talking about. You can easily find an article to try to support your opinion, but is it true and could you determine if it is true? Or do you trust the article?
You are looking at this point in time, but if the labor pool had not increased at a substantial rate, then real wages and the middle class would not have seen such a dramatic drop in buying power that they have experienced over the years. Labor supplies operate with the same supply-demand as a product or service with the wages being the cost of labor.
The overall trend for labor and real wages has been down. You keep touting again and again that Immigration has not been part of the problem, but it is and always will be as what immigration does is two fold economically: drive up labor supply which puts downward pressure on wages and drive up demand which puts upward pressure on prices. This is basic economics. It has reeked havoc on certain jobs wage levels like janitorial, construction, and other low skill jobs that paid a living wage at one point in time, but have failed to do so due to a massive influx of low cost labor combined with other labor supply pressures like outsourcing and automation.
This is why when you keep pushing this immigration is fine narrative you like because of your emotional position when discussing this topic, you can't engage in actual thinking based on your business degree which taught you about labor supply and demand. The majority of Americans are the same way. They base their thinking on emotional positions while posting articles based on a particular point in time or agenda versus what has occurred long-term and the causes. Immigration has been one of the causes of an increased labor supply leading to a drop in real wages.
Real wages are wages adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wages or unadjusted wages.
https://en.wikipedia.org/wiki/Real_wages#:~:text=Real%20wages%20are%20wages%20adjusted,nominal%20wages%20or%20unadjusted%20wages.&text=Labor%20productivity%20vs%20compensation%20in%20the%20U.S.Labor supply and demand and how it operates:
http://www.econoclass.com/economicsoflabormarkets.htmlAll these are known factors, but when a person can find an article to support a position then the only way you can determine if this is true is to understand the underlying method by which they are generating the article. You often cannot trust the conclsion of agenda driven articles, when the maniopulation of the labor supply is an already known issue by big business to put downward pressure on wages and especially real wages, one of the biggest variable cost inputs in a business.
There is zero reason to believe that increasing immigration, especially low skill immigrants has not dramatically hammered the real wages of low skill jobs in various areas like construction, janitorial, and similar low level jobs. It absolutely has. It's been intended to do so.
Yet you do not hear this discussed by Democrats or Republicans in this manner. The Republicans rely on fear towards immigrants which is irresponsible and the Democrats try to be the friendly face of immigration which doesn't in anyway discuss the economics of immigration, especially when combined with the other ways business has manipulated the labor supply in their favor such as outsourcing and automation combined with low skill immigration and high skill immigration with the H1B visa program to dramatically expand the labor pool putting downward pressure on real wages and the buying power of the middle class.
Does this have the same effect on every industry? No, it does not. As extremely high skill positions like doctor or engineer will still experience a shortage as those capable of doing the job well are still in short supply, but does it have a dramatic effect on low to medium skill labor, hell yeah it does.
This should be tracked more carefully than it is and adjusted in the same way there are moves to protect industry in America like the current moves by the government to protect the EV industry and the the steel industry from the extremely low cost labor offered in places like China, which also severely impact the labor supply in America as well as creating security concerns for national manufacturing of key goods like materials, medicine, and the like.
I'm not even sure why I'm doing this. Most Americans are not even capable of a higher end discussion of economics and its impact on them. They don't understand it. It's why they respond to politicians who speak to them emotionally and not intellectually, even while both parties generally push polices that benefit business in slightly different ways. The Democrats have a socialist arm, but it's not very strong or well supported. Politicians like AOC are mostly trotted out to obtain her voting bloc, while never really intending on pushing much of her agenda, which is likely wise.
Riverdog, this is a moment in time where immigration is in a favorable position. Long-term it has been used along with other labor supply pressures to reduce wages, especially real wages, in a lot of industries. It's been irresponsibly managed by both parties to the detriment of the middle and working class and has benefitted business to a much higher degree than middle and working class workers and consumers considering the main reason for low prices is not immigration, but outsourcing or manufacturing outside the country in low labor cost nations while bringing in immigrants to put downward pressure on service jobs in America which is why construction and janitorial jobs have been hit so hard.
There is a reason you have worked around immigrants for so long in your industry. They are cheaper than American workers and benefit agricultural production greatly by keeping the labor supply high and the labor cost low.
This isn't up for debate. it is how labor markets operate with supply and demand. Immigration has been far more beneficial to business than middle and working class folks.
The question is one of: does the demand spike from immigration offset the increase in labor supply and demand? Various people have tried to answer this question, but it really depends on the industry.
Suffice it to say, both parties like the immigration as an issue to debate on an emotional level than an issue to discuss on an economic level. Democrats, especially union Democrats, who are interested in bolstering the middle and working class real wages should be far more concerned with immigration combined with outsourcing and automation than Republicans by a good measure because this trifecta is the method that big business has used to put massive downward pressure on real wages in America selling Americans the benefits outweigh the costs even why their standard of living is measurably going down along with their purchasing power as their real wages get the trifecta hammer of unmoderated immigration, outsourcing to low labor cost nations, and automation. Pretty potent combination to hammer wages.
At least the Democrats and Republicans are taking some measures to limit the impact of outsourcing, but why are they doing that? Because it's impacting the wealthy. Elon Musk can't compete selling EVs in America against the Chinese. Neither can a lot of chip manufacturers. Google and Facebook can't sell social media in the Chinese Market, so they lobby America to ensure the Chinese cannot sell here with Tiktok if we cannot sell there. Of course, Apple doesn't want a low priced Chinese competitor like Huawei biting into their Apple sales even while they manufacture in China. When the wealthy want their markets protected, they get it done.
The middle and working class want their wages protected, neither party is going to help them much.
And most Americans have no idea this is even occurring with both their political parties. It's pretty sad honestly. I'm not sure how you combat it. I can list this information and share it with people since I see it daily in the business news and studying businesses and how they operate, but it doesn't change voting patterns or get middle and working class voters to take more action on their own behalf in an intelligent way. I tend to think as long as the wealthy and powerful manage the economy well enough not allow a large enough number of poor to cause a Communist style revolution, I guess they've done enough to maintain their wealth while not upsetting the middle and working class too much. These two parties can hand the presidency back and forth while pretending they're at odds while both support big business dominance. Not much else I can do I guess. Keep investing and benefit from my knowledge.
No one at least on here can say I didn't try to tell you. Neither of these parties are your friends. I hope the middle and working class get some real champions on their behalf to get some of the economics moving in their direction.