April Jobs and Inflation Reports
The BLS reported earlier this month that the U.S. economy added 428,000 jobs in April and unemployment remained at 3.6 percent.
However, other problematic employment data persist during this economic recovery.
The labor participation rate, which consists of those working and those looking for work, was at 62.2 percent in April, down from the 62.4 percent in March.
In addition in April, there were 5.9 million people not in the labor force who currently want a job, 4 million people working part-time who wanted full time employment and 456,000 discouraged workers.
Inflation also continues to impede economic recovery. Inflation rose 0.3 percent in April, culminating into an alarming 8.3 percent over the past 12 months. So, despite wage increases of 5.5 percent over the past 12 months, inflation significantly diminished what workers are able to buy.
Meanwhile, some analysts, citing shrinking GDP and impending hiring freezes and layoffs, point to a near term economic downturn.
Inflation, Wages and Immigration
I previously wrote a blog dismissing arguments made by some politicians that increasing immigration would combat inflation by lowering wages.
In the comprehensive report "Immigration Cannot Significantly Reduce Inflation" that was published this month, authors Steven A. Camarota and Karen Zeigler further dispel these arguments, particularly in regards to lower-skilled jobs that require less education.
Camarota and Zeigler find:
...[I]t is simply not possible to have a large impact on consumer prices by using immigration to increase the supply of labor and reduce the wages of workers without a bachelor's degree. The labor incomes of these workers account for only about 25 percent of GDP, so even a very substantial decline in their labor incomes of, say, 10 percent, can only reduce prices by an estimated 2.5 percent... Further, making reasonable assumptions about the wage response to increased immigration shows that the level of new immigration that would be necessary to reduce wages by 10 percent would have to be completely unprecedented. Finally, reducing wages for the less-educated would have negative implications for America's poorest children as 64 percent of children in poverty are dependent on the income of a worker without a four-year college education."
In the Opinion column "More Immigration Will Do Little to Slow U.S. Inflation" that was published last month, Ramesh Ponnuru wrote:
Worker shortages and rapidly rising wages are putting strong upward pressure on prices. But importing labor is politically dicey and economically unproductive...There are also reasons for skepticism about the political utility of higher immigration as a Democratic answer to inflation. It creates a suspicion that Democrats want more immigration as a way of bringing wages down — which is, after all, what some pro-immigration arguments imply. Even if they avoid creating that impression, it smacks of opportunism."
LISA IRVING is a Content Writer for NumbersUSA's Media Standards Project
