I note with some satisfaction that Mark Krikorian and I are in agreement on the current state of immigrant unemployment: i.e., that low-cost and seasonal labor layoffs in construction and hospitality have generated in a spike in immigrant unemployment.
But we are not in agreement on how the market will handle this. Mark proposes that we pay illegals to leave, thereby reducing the labor oversupply. I suggest a comprehensive immigration reform that lets employers and employees decide the supply.
In his Corner post yesterday, Mark references a study by Steve Camarota of the Center for Immigration Studies. Here are some other facts from it:
– From 2005 to the first quarter of 2008, immigrant unemployment was lower than native unemployment.
– Since the first quarter of 2008, immigrant unemployment has been higher than native unemployment.
– However, the unemployment rate for immigrants without a high-school diploma remains almost 5 percent lower than the unemployment rate for natives without a high-school diploma.
To Mark, this signifies immigrants taking American jobs. To me, this signifies a lower cost basis being established for business investment. A week ago I suggested that states with greater labor-force flexibility (more immigrants) would pull out of their unemployment woes more rapidly than others. I stand by this “bet,” and a one-year time frame in which to measure results.
The Center for Immigration Reform, the Federation for American Immigration Reform, and NumbersUSA all hold that there is no job that native Americans will not do, only price at which they will not do it. This “principle” is no more meaningful than its opposite: “There is no business which will not succeed, only a fixed-cost basis at which it cannot succeed.”
Coming out of a period of easy credit, we expect stocks to depreciate, debt to depreciate, and real estate to depreciate. And, although no politician will say it, we expect the value of labor to depreciate — all as a precondition to recovery.
That is why it is insane to use “rising wages” as the primary indicator of a labor “shortage.”