The Labor-Shortage Myth
Today’s jobs report from the Bureau of Labor Statistics shows the unemployment rate continuing to hold close to its lowest level in 70 years, despite a slight uptick last month. This might seem like good news, but it has two groups of Americans deeply troubled. One is the business community, which counts on a surplus of available workers to keep wages down. The other, unfortunately, is mainstream economists—and the policy makers who listen to them.
Federal Reserve Chair Jerome Powell has linked low unemployment to high inflation, publicly discussing the need to restore “balance” to the labor market—meaning increase unemployment and suppress wage growth—to tame consumer prices. A director at the American Enterprise Institute, a corporate-friendly think tank, recently called for “a pretty big increase in the unemployment rate.” Republicans in several states have introduced legislation to loosen child-labor restrictions as a way to expand the labor supply.
The Biden administration, meanwhile, seems to agree that low unemployment poses a problem, and to see immigration as an answer. In December, that Biden’s “top economic aides are concerned that the lack of immigrant workers is leading to on the grounds that “there are businesses around this country that are desperate for workers” and “desperate workers in foreign countries that are looking for jobs in the United States.” Apparently our own workers aren’t desperate enough.
