Wednesday, April 11, 2018

What's Behind The U.S. Workers' Shortage? Trump's Immigration Policies!

There's a great deal of consternation currently about the lack of workers in the country, according to the Barron's piece, The Great Labor Crunch'.  The deficit applies across the board: retail, fast food, trucking, construction, oil drilling, technology and agriculture. In the latter case, we learn that crops lay in fields rotting in California for lack of workers, e.g

The WSJ's Dan Henninger  (April 4) tried to put a scale on  the problem:

"Earlier this week the Journal described the shortages across the Midwest. Skilled, semi-skilled, unskilled - we're short of everything. A sign on an Arby's near Mason City, Iowa reads: 'If you're smiling, we're hiring'"

He also noted that "demographics alone predict a worker shortage of 8.2 million over the next 10 years. An oil service manager calls it 'an emergency, a crisis'"

Adding later:

"Somewhere, somehow, the U.S. needs to produce more workers."

Actually, the U.S. doesn't have to "produce" any workers, it just has to loosen up on the draconian  immigration rules and allow more foreign workers in whether under H1B visas or other.  Even Henninger is smart enough to know a lot of the blame for the dearth of workers lies with Donnie J. Dotard, i.e.

"Mr. Trump's justification for brinksmanship (with tariffs) is mostly one thing: protecting U.S. workers from unfair foreign trade and job displacement...there's just one problem with this: The U.S. is running out of citizen workers."

In other words, Trump's 'America First' idiocy is actually undermining his economic quest to keep a higher level of growth than we've seen. But...if workers aren't available, then productivity craters and the GDP and growth with it. Never mind the stock market which will also reflect these issues in ongoing instability.

The WSJ Editorial 'The Vanishing Caravan'  (April  6, p. A14) underscored the folly of the current immigration limits:

"Faster growth from tax reform and deregulation means a tighter labor market that attracts more migrants. Mr. Trump would be wise to trade border security for reform that allows more legal immigration to meet the economy's needs. Then he wouldn't have to pull stunts like hyping a band of poor migrants as an invading army."

But Trump, kowtowing to his crazy, idiot base would rather slam the immigration doors almost shut,  posture over building a "wall" and cutting off millions of workers who could take the unfilled jobs - whether in fast food, retail or agriculture.

With the nation's doors shuttered to immigrants, and the DACAns in a state of uncertainty - so they don't know whether to apply for jobs or not- it's little wonder so many jobs across the board are going unfilled. Add to that all the baby boomers currently retiring or retired (like yours truly) and you have a serious situation that calls for outside the box thinking. 

The Right, of course, usually misfires on any economic issue as it does so much else. As Paul Krugman has recently noted,  the search for serious conservative economists is much like a search for unicorns, they simply don't exist - or if they are at universities and considered real academics - they lack the clout to influence policy. Those that remain are generally "charlatans and cranks" i.e. such as those prepared to extend the recently passed tax cuts which the GAO estimates will add another trillion to the deficits and impose  a debt equal to 105 % of GDP - say if these cuts are extended to 2028. 

No surprise that Heninger, a captive of  Rupert Murdoch op-ed think - despite acknowledging Trump's role in the job dearth- also blames an unwillingness of too many in the population to move to where the jobs are.   At least he is able to fathom some of the reasons, which is more than I can say for a lot his loudmouthed brethren, e.g.:

"Why not move? It's a long list. Because the home mortgage deduction is too valuable and the shortage of housing makes moving too expensive."

Bingo. But then he shifts to the usual Right wing tropes:

"Because the vast expansion of state Medicaid and other entitlements has trapped more people into thinking that a low grade life without work is good enough."

Which is a total crock, because most of those on Medicaid  do work. It's just that their pay - such as at Walmart - isn't enough to cover family medical expenses so they have no choice but to access Medicaid, usually under the ACA.  Given having these benefits often means the difference between a family member - e.g. disabled or chronically ill - prospers or not - one would understand why they may not be willing to roll the dice to move to a new state - where accessing such benefits may be far more difficult, if not impossible.

Hence, they rightly reason it  makes more sense to grasp the "bird" in the hand than to chase "two in the bush" - when that "bush" my prove to be somewhat inhospitable. This is exactly why Colorado is now experiencing an exodus of many thousands of people from other states, who'd originally moved here to chase the gold ring. Well, they soon learned the pay they got for their new jobs wasn't adequate to cover their new location's housing costs. (Trulia recently estimated that only 29 perent of homes listed on the metro Denver market are affordable, and that was to those workers earning at least $70, 790 in 2015.  This from The Denver Post, April, 8, p. 10B)

The median listing price for homes on the Denver market now is - wait for it:


Some of the new workers that moved to our state considered themselves lucky to even find bedrooms to rent out in others' homes, for about $600 a month. SO why in hell would anyone - already settled with Medicaid and at least a low pay job in another state, want to move to our state? 

This is exactly where "outside the box" solutions are needed. As it turns out, at least one WSJ letter writer - Prof. Robert H. Bruhi, of the University of Illinois - suggested solutions in yesterday's edition. As he proposed:

"Thinking strategically, a smart entrepreneur might take the long view and offer home buying assistance, home selling assistance and long term contracts. These perquisites are typically offered to CEOs. What's wrong with using these incentives for other workers?"

Well, exactly! What's wrong with using them?  These make more sense than the advice of another, less thoughtful writer, who suggested "if coal miners were simply willing to  move and retrain" they'd be able to take jobs with manufacturers in Iowa."

Well, maybe - but perhaps they aren't willing to move.  They might be "displaced"  but still have access to Medicaid services that they'd be hard put to get in Iowa, and don't want to risk a crap shot. Especially if they aren't getting assistance in selling or buying a new home as Prof. Bruhi suggested.

The most direct solution, obviously remains allowing many more immigrants in to take jobs that are shunned by Americans.  But Trump, hostage to his own rabble base, refuses to do that. Then, as we say, he will have to pay the piper with a sclerotic economy with ever downward growth. 

workers from unfairf

No comments: