Jobs Report Reveals a Discouraged Labor Force

June 13, 2016 | PFIR

In early June, the Department of Labor released its ugliest jobs report in six years.

Employers created just 38,000 jobs — less than a quarter of the number economists had expected.  The labor force participation rate plummeted back to a near-historic low of 62.6 percent, reversing several months of increases.

U.S. workers are disheartened. Millions cannot find jobs that pay a living wage. But one solution offers hope. Curbing immigration would reduce competition for jobs, giving American workers a much-needed wage boost.

It’s well documented that high levels of immigration depress wages. Labor economist George Borjas says that foreign workers reduce Americans’ wages by over $400 billion each year.

Of course, immigrants don’t intentionally push down wages. It’s simply an issue of supply and demand. When there’s too many workers competing for the same jobs, employers can cut or freeze wages without experiencing staff shortages.

Instead of improving workers’ job prospects by cutting immigration, Congress is trying to increase low-skilled immigration. In December, lawmakers effectively eliminated the cap on H-2B “low-wage” visas — previously set at 66,000 annually — by exempting those who obtained a visa from late 2012 to 2015 from counting towards that limit.

Now, many in Congress want to make that exemption permanent. If they succeed, as many as 264,000 H-2B visa holders could flood the labor market to compete with blue-collar U.S. workers for jobs.

These workers already face dire economic straits. From 1979 to 2013, their inflation-adjusted hourly wages dropped five percent.

High immigration policies restrict job opportunities and depress wages for American workers. Considering the latest anemic jobs numbers, the last thing Congress should do is double down on these failed policies.

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