The economy is slowing down, southern border is being overrun with immigrants, inflation is kicking down the door but we still hear the same old song: unrestricted immigration and lower wages are the key to economic success but for whom?
According to a report by The Wall Street Journal (careful, paywall ahead), the United States is grappling with a prolonged labor crisis, predicted to result in increased wages and a decelerating economy. Unemployment in the country, currently standing at 3.8%, has remained below 4% for nearly two years, mainly because businesses are trying to meet the sharp increase in consumer, post-pandemic demand. The report claims that low unemployment is what’s triggered worker strikes in sectors like automotive, aviation, and entertainment. However, more profound economic factors have been in motion for decades, putting workers in a stronger position. These factors include retiring boomers, a declining birthrate, reduced productivity, and the rise of part-time, remote, and gig workers. OK, besides birthrate (a problem whose magnitude far exceeds the temporary need for workers) and allegedly reduced productivity, where’s the problem and why must competitiveness necessarily mean low wages?
Economists suggest that an economy’s growth is linked to workforce expansion and productivity, hinting at lackluster GDP growth and higher wages in the future. Potential “solutions” to this high wage “problem” include:
- encouraging more individuals, such as disabled or the formerly incarcerated to enter the workforce (OK I guess)
- outsourcing (it sounds bad, it has been tried, it doesn’t work unless the goal in to actually increase unemployment)
- automation (lower labor supply is a GREAT motive for automation)
- retraining (if they don’t actually need lower-, not higher-skill workers, why not)
- immigration (last but certainly not least, immigration is… an impediment to automation, to say the least)
