Is the US labor market defying all logic? Inflation is too high, borrowing costs are surging, the national economy is slowing, and half the country is living paycheck to paycheck. And yet, despite everything that is unfolding, the US jobs arena remains stronger than Hulk Hogan’s 24-inch pythons. But while everyone dissects the headline figures from the monthly non-farm payrolls report, one component is going largely unnoticed: Native-born workers are losing jobs, and foreign-born workers are gaining positions.
The Make-up of US Jobs
In May, the US economy added a whopping 339,000 new jobs, up from an upwardly revised 294,000 positions in April, according to the Bureau of Labor Statistics' (BLS) NFP data. This also surpassed economists' expectations of 190,000. The unemployment rate edged up to 3.7%, from 3.4%. The labor force participation rate was flat at 62.6%, while average weekly hours slid to 34.3. This was another stellar US jobs report, but not necessarily for American-born workers.
Let's compare the labor numbers for these two categories.
First, the BLS reported that the number of native-born workers plummeted by 369,000 to 130,744 million, the sharpest decline since November 2022. This was roughly flat from the same time a year ago. The unemployment rate was 3.5%, up slightly from 3.4% a year ago. The labor force participation rate was 61.6%, also flat from the previous 12 months.
By comparison, jobs for foreign-born workers soared by 297,000 to an all-time high of 30.359 million. This was up notably from May 2022, when it stood at 29.648 million. The jobless figure was 3.2%, unchanged from May 2022. The labor force participation rate surged from 65.5% to 66.8% over a 12-month span.
So, is this a concerning trend for both the economy and US adults? It depends on whom you ask.
Sustainable or Unsustainable?
Michael Capuano, a researcher at the Federation for American Immigration Reform (FAIR), said this is "unsustainable" because the increase in unskilled foreign-born workers affects "the native-born at every stage of their careers.
"If mass immigration really solved economic problems, you’d think it would have started working by now," he wrote. "In reality, native-born workers’ wages are stagnating as they continue to be undercut by cheap labor from abroad. American citizens deserve a limited immigration system that prioritizes their needs, not one that lets businesses break the law and exploit workers while handing taxpayers the bill."
A Joint Economic Committee report in December 2022 purported that immigrant workers are "essential" to the growth of the labor force, productivity, and overall economy. "For example, immigrants also help counteract the slowing growth rate of the U.S. population, which helps drive the expansion of the labor force and contributes to overall economic growth,” the report stated. "The U.S. labor market benefits from the contributions of immigrant workers. Foreign-born workers are more likely to participate in the labor force than their native-born peers."
The debate surrounding the positives and negatives of foreign workers will rage on in perpetuity. But the reality is that the US needs immigrant labor to sustain entitlement programs like Social Security. Here are two facts: The US population is getting older, and Social Security is running out of money.
(Photo by Jim Davis/The Boston Globe via Getty Images)
In the next 15 years, approximately one-fifth of Americans will be age 65 and older, up from roughly one in eight in 2000. By 2060, the number of seniors will reach 95 million, up from the current figure of about 55 million. By 2035, there will be more older adults than kids, the Census Bureau (CB) projected.
"Higher fertility and more international migration have helped stave off an aging population and the country has remained younger as a result. But those trends are changing. Americans are having fewer children and the baby boom of the 1950s and 1960s has yet to be repeated. Fewer babies, coupled with longer life expectancy, equals a country that ages faster," the CB wrote in a March 2018 report.
Meanwhile, Social Security is "actually in worse shape than anybody really knows," Laurence Kotlikoff, a professor of economics at Boston University and best-selling author, recently told Liberty Nation. The Congressional Budget Office warned in December 2022 that the retirement scheme would be insolvent in a decade and is facing a shortfall of $61 trillion. Indeed, Social Security costs more than ever before because more Americans are retiring and living longer, and the ratio of worker to benefit is around two. When Medicare is factored into the calculations, the federal government will have approximately $100 trillion in unfunded liabilities on the books.
Without sufficient numbers of native-born workers, America must import foreign labor to keep the Ponzi scheme intact.
Takers Versus Givers
Tens of millions of Americans receive some public benefit, be it food stamps or Medicaid health coverage. With the top 10% of income earners paying most of the nation’s tax bill, the present infrastructure has more people taking from the system than contributing to the monstrosity. In addition, the sweetened pandemic-era benefits pummeled the concept of work, from hours to productivity. More than ten million positions are available, offered by desperate employers who need to fill these job openings. These companies will occupy them in any way they can, even if it means hiring someone born in Bangladesh, El Salvador, or Malaysia. Or, if these individuals cannot do it, then perhaps AI will.
