The Corner

Economy & Business

The Problem with Expanding Guest-Worker Programs

(Jose Luis Gonzalez/Reuters)

There’s a worker shortage looming. Take construction. A Reuters story from January relates the travails employers face in that industry: “62 percent of firms are already complaining they cannot fill key professional and craft worker positions” and “many firms report having a hard time finding qualified workers to fill project manager or supervisor positions, equipment operators, carpenters and laborers.” The economy is hot hot hot, and a lack of new workers could be a serious drag on future growth.

Oh, wait — that Reuters story is from January 2014. Six years later, over a million and a half new construction jobs have been added — and without a giant new guest-worker program. According to the Bureau of Labor Statistics, the annual growth of hourly income in the construction sector has usually bounced somewhere between 2 and 3 percent in recent years (though it was a bit higher in 2018), and there’s some evidence that this income growth has slipped over the past year. Annual hourly income growth in this sector remains below where it was before the Great Recession. That is not exactly the sign of a labor market without enough workers.

The perpetual shadow of a “worker shortage” provides a context for the efforts of some Republicans — including potentially in the White House — to push for an expansion of guest-worker programs to remedy a supposed “shortage.” White House chief of staff Mick Mulvaney lamented in England that the U.S. is “running out of people to fuel the economic growth that we’ve had in our nation over the last four years,” and Politico reports that Lindsey Graham, Thom Tillis, and others are involved in talks to expand guest-worker programs. (The Politico story even includes dire warnings from, yes, construction groups about labor shortages.)

There are both empirical and strategic problems with arguments for the need for expanded guest-worker programs.

While the economy is fairly solid, it is not — campaign press releases to the contrary — white-hot. Inflation-adjusted annual GDP growth in 2019 was 2.3 percent, which is a respectable number but well below the 3+ percent growth rates of the expansions of the Eighties and Nineties. Nor can this slump in overall economic growth be blamed on lower population growth. Real per capita GDP growth is also significantly lower than it was in prior expansions.

There is also some evidence to suggest that there is still more slack in the labor market. The employment–population ratio is down considerably from where it was prior to the Great Recession (let alone the early 2000s). The employment rate for prime-age males (25–54) was 89 percent in 2000; it was only 86.4 percent in 2019, which suggests that there are many prime-age men who could still be added to the workforce. While wage growth has improved since the depths of the Great Recession, it still lags behind the rate of the 1990s.

Then there’s the question of policy strategy. President Trump has portrayed himself as the champion of “forgotten Americans.” A tight labor market helps the paychecks of individual workers and their families, but it also provides other civic benefits. This demand for labor encourages an expansion of the labor pool, providing opportunity to those whose resumes might be otherwise ignored. Criminal-justice reform is a chic topic in the Beltway right now, and one of the biggest ways of helping those with criminal records integrate into American society is to have a tight labor market. Such a labor market will encourage employers to invest more in training their workforces, expanding opportunity for those with and without college degrees. Conversely, guest-worker programs can often be vehicles for undermining the bargaining power of American workers.

If the GOP wants to help secure its support among working Americans, expanding guest-worker programs would seem a step in the wrong direction.

Most Popular

Media

The Unrelenting Assault on President Trump

There has never been a presidential campaign in the United States where the administration was so massively opposed by the principal media outlets as in this election. Nor, in at least a century, have the national political media so widely and thoroughly discarded the traditional criterion for journalistic ... Read More
Media

The Unrelenting Assault on President Trump

There has never been a presidential campaign in the United States where the administration was so massively opposed by the principal media outlets as in this election. Nor, in at least a century, have the national political media so widely and thoroughly discarded the traditional criterion for journalistic ... Read More
Education

Destroy the ‘Public’ Education System

‘Public” schools have been a catastrophe for the United States. This certainly isn’t an original assertion, but as we watch thousands of authoritarian brats tearing down the legacies of George Washington and Abraham Lincoln, it’s more apparent than ever. State-run schools have undercut two fundamental ... Read More
Education

Destroy the ‘Public’ Education System

‘Public” schools have been a catastrophe for the United States. This certainly isn’t an original assertion, but as we watch thousands of authoritarian brats tearing down the legacies of George Washington and Abraham Lincoln, it’s more apparent than ever. State-run schools have undercut two fundamental ... Read More
Culture

Two NFL Apologies

So Drew Brees defended the American flag and all it stands for, said he didn’t agree with kneeling for the national anthem and correctly described this gesture of open disrespect as disrespect. "Is everything right with our country right now?" said the Saints' future Hall of Famer. "No, it is not. We still have ... Read More
Culture

Two NFL Apologies

So Drew Brees defended the American flag and all it stands for, said he didn’t agree with kneeling for the national anthem and correctly described this gesture of open disrespect as disrespect. "Is everything right with our country right now?" said the Saints' future Hall of Famer. "No, it is not. We still have ... Read More
Politics & Policy

Chesterton’s Cops

Conservatives are big on “Chesterton’s fence.” That’s G. K. Chesterton’s principle that you cannot reform what you do not understand, that you should not for the sake of convenience knock down a fence until you understand why it was put up in the first place. When encountering a fence in his way, ... Read More
Politics & Policy

Chesterton’s Cops

Conservatives are big on “Chesterton’s fence.” That’s G. K. Chesterton’s principle that you cannot reform what you do not understand, that you should not for the sake of convenience knock down a fence until you understand why it was put up in the first place. When encountering a fence in his way, ... Read More
Culture

Why Progressives Wage War on History

Princeton University’s decision to remove the name “Woodrow Wilson” from its School of Public and International Affairs is a big win for progressive activists, and the implications will extend far beyond the campus. It hardly surprises me, in today’s polarizing environment, that my alma mater caved to ... Read More
Culture

Why Progressives Wage War on History

Princeton University’s decision to remove the name “Woodrow Wilson” from its School of Public and International Affairs is a big win for progressive activists, and the implications will extend far beyond the campus. It hardly surprises me, in today’s polarizing environment, that my alma mater caved to ... Read More
Regulatory Policy

Going Medieval

Writing in Bloomberg, Noah Smith gives more than a nod to Peter Turchin’s theory of elite overproduction (or, as Smith neatly relabels the phenomenon, “elite over-competition”) as a cause of the current wave of turmoil in the West, something with which I would agree but, I think, more emphatically. Quite ... Read More
Regulatory Policy

Going Medieval

Writing in Bloomberg, Noah Smith gives more than a nod to Peter Turchin’s theory of elite overproduction (or, as Smith neatly relabels the phenomenon, “elite over-competition”) as a cause of the current wave of turmoil in the West, something with which I would agree but, I think, more emphatically. Quite ... Read More
U.S.

Bad News about the Virus

On the menu today: an important update about indications that the coronavirus is now more contagious than it used to be, with far-reaching ramifications for how we fight this pandemic; a point on the recent complaints about the Paycheck Protection Program; and a new book for everyone closely following the debate ... Read More
U.S.

Bad News about the Virus

On the menu today: an important update about indications that the coronavirus is now more contagious than it used to be, with far-reaching ramifications for how we fight this pandemic; a point on the recent complaints about the Paycheck Protection Program; and a new book for everyone closely following the debate ... Read More

Canceled, &c.

There was a headline last week: “Boeing Communications Chief Resigns Over Decades-Old Article on Women in Combat.” Find the story here. It explains that “Niel Golightly abruptly resigned on Thursday, following an employee’s complaint over an article the former U.S. military pilot wrote 33 years ago ... Read More

Canceled, &c.

There was a headline last week: “Boeing Communications Chief Resigns Over Decades-Old Article on Women in Combat.” Find the story here. It explains that “Niel Golightly abruptly resigned on Thursday, following an employee’s complaint over an article the former U.S. military pilot wrote 33 years ago ... Read More