Partners - Stock market, economic and political commentary by Patricia Chadwick

The Good News on Employment Is Also a Challenge (Immigration Could Be the Solution)

June 6, 2018
Patricia Chadwick, pchadwick@ravengate.com
The employment report last Friday was good news indeed; an increase of 223,000 jobs in May was a clear indicator that the U. S. economy is growing at a healthy pace. The unemployment rate now stands at 3.8%, the lowest level since the turn of the 21st century. And while the number of the long-term unemployed remains too high at 476,000, it is at least moving in the right direction. The beneficiary of this good news is the American family because, as incomes rise, so too will discretionary spending, which feeds the virtuous cycle of economic growth. So far, so good.

But running in parallel with the good news on employment is the economic reality that the workforce is being drained of experience and talent as baby boomers reach the age of retirement.

For the last seven years, on average 10,000 Americans each day have become eligible for Social Security and have been required to go on Medicare. This is the equivalent of about 300,000 potential retirees each month, and while not all of them quit working on their retirement age birthday, many have or will. Others will reduce their work hours, in essence providing less labor for growing job opportunities. This phenomenon will continue for another dozen years until the last of the baby boomers reaches the “normal retirement age,” the earliest moment a worker can obtain full Social Security benefits, an age that is slowing rising from 65 years to 67 (for people born in 1960 and later).

Over the last few years, while the economy was coming out of the recession and getting its sea legs, the impact of the withdrawal of members of the workforce was muted, because in essence there were more job seekers than jobs. But that tide has turned, and we now face the prospect of a true labor shortage over the next few years if the economy continues to thrive.

It is likely, as well, that this shortage of workers is also being exacerbated by the departure of many experienced, tax-paying undocumented workers, just at a time when they are most needed. This aspect is most severely felt in the agriculture sector and in some parts of the fishing industry.

Chesapeake Bay fishermen are decrying the lack of workers, idling scores of boats and rupturing a heretofore reliable supply of seafood. Many expect that this summer’s labor shortage will severely reduce their harvest of oysters and crabs. The Washington Post reports that about 40% of Maryland’s crabbing operators lack pickers, dealing them a sharp blow just as the broader economy around them is surging and pushing seafood prices up sharply — with little of that revenue going to them. They attribute the shortfall to new enforcement of regulations meant to restrict immigrants, but which has also dried up the supply of legal workers who traditionally arrive on temporary visas.1

In another example, Kennett Square, a town about 40 miles west of Philadelphia, was highlighted in the New York Times this past Sunday as the once-thriving mushroom capital of the world. For the last thirty plus years, hard-working immigrants, mostly from Mexico, have created a vibrant local economy. Today, however, many of them have gone into hiding, fearful of being deported, and a vital and vibrant part of the American economy is threatened.2

Deporting those who have come to this country and worked hard and, in the process, contributed to the growth of our economy, is economic folly. It will only exacerbate the impending labor shortage, and it represents a classic illustration of shortsighted policy that makes the perfect the enemy of the good.

What this country needs at this time of expansion and growth is a thoughtful, bipartisan immigration strategy focused on expanding the labor force. The jobs needed stretch across a broad spectrum of the economy, including the service sector, manufacturing and agricultural/fishing industries. Some positions require only a high school education, while there are also high-skill jobs that need people with graduate degrees.

We have done this in the past, to great success, and I’m not referring to a century ago, but to the policy we invoked in the aftermath of the Vietnam War.

In 1975, after that war ended, well over 150,000 Vietnamese refugees came to this country, settling primarily in California and Texas. Family reunification (now pejoratively referred to as “chain migration”) swelled their ranks over the subsequent quarter century. Although some of them experienced discrimination and even horrific violence, these “boat people”, the derogatory term often used to describe them, became assimilated into American life, many creating thriving enterprises. Their children and now grandchildren are counted among the graduates of the most prestigious colleges and universities in this country and among the echelons of middle and upper middle class Americans.

That tale of success can be repeated in the decades ahead if our legislators can open their minds to see the value of an immigration policy that will bring in people from a vast array of countries, walks of life, religions and political inclinations.

The criteria should be simple — immigrants must be willing to embrace the American way of life, accept our form of government, respect our religious freedom, refrain from criminal behavior and learn the English language, a strong unifying force in this country.

Some members of Congress, for political expediency (fearful of being trounced in the upcoming election), are now attempting to resolve the DACA quandary. Let that be just the first step. They and their colleagues on both sides of the aisle should recognize an acute economic reality and do what’s best for the country.

1 “Crab Crisis: Md. Seafood Industry Loses 40 Percent of Workforce in Visa Lottery,” The Washington Post.

2 “The Mexican Revival of Small-Town America,” The New York Times.

© Copyright 2018 Patricia W. Chadwick

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