Lousy February BLS Report: Blip or Grim Omen?

Guest Post by Joe Guzzardi

On second thought, maybe the United States’ job market isn’t as strong as President Trump would like the nation to believe. The dismal February Bureau of Labor Statistics showed a piddling 20,000 new jobs created. Many of those jobs are part-time, minimum wage and don’t include benefits.

As they always do, excuses aplenty exist – bad weather, the traditional winter scapegoat, and critics suggested a different angle as the 35-day partial government shutdown shouldered some of the blame for the weakest BLS report since September 2017.

More troubling, nonemployment among the key demographic, working-age Americans between 35 and 44, plunged in February to a 12-year low. Half of all BLS labor classifications showed either flat or declining employment, with construction taking the biggest hit, a minus 31,000 jobs.

The BLS report came amidst a slew of layoffs and announced layoffs at big retailers like Gap, JCPenney, Sears, Dollar Tree, and Abercrombie & Fitch. Leading retailers Amazon and Walmart also announced employee cutbacks. Retail positions fell in February by 6,100, bad news for many unemployed or part-time workers who hope they can land a merchandising job to weather their personal financial storms.

As disappointing as the February report is, some encouraging nuggets could be found, namely the 3.4 percent year-over-year wage growth, the decade’s strongest. And revisions to earlier BLS reports brought the December, January and February average job gains to a respectable 186,000.

That smattering of good news, however, doesn’t justify the repeated demands that big business and the White House have recently made for more foreign-born labor. In his calculation for more immigrant labor, President Trump consistently ignores the growing worker displacement threat that automation presents. Las Vegas casino and hotel workers are among the latest employees that robotics threaten. At least two ominous research studies, one which Oxford published and another from McKinsey Global Institute, predicted that robots would eliminate hundreds of thousands of jobs within the next three decades. Even if the alarming reports overstate automation’s effects by 50 percent, robotics’ consequences will still be dire.

In no way can the latest BLS analysis be interpreted as a defense for adding thousands of more employment-based visa holders. Yet President Trump has loudly and repeatedly taken his cue from employers who insist they can’t find workers and call for higher legal immigration levels.

During his State of the Union address, President Trump said that he wants “people to come into our country in the largest numbers ever, but they have to come in legally.” Lawful permanent residents who enter the U.S. at the rate of 1 million or more annually are work authorized, and can enter the job market immediately to compete with or displace Americans. Another 750,000 employment-based guest workers also arrive each year.

The inevitable effect of high immigration is to create a looser labor market that cuts into the year-over-year wage gains the February BLS report reflected. An immigration-driven labor pool expansion would be particularly hurtful to the wage progress that low-income, low-skill Americans have made in the last two years.

Here’s how the business specialist website Bloomberg assessed the employment reality on the ground when compared to employers’ shortage scare tactics: “While employers widely report that they can’t find workers to fill open jobs, a stubborn gap remains between the share that cites trouble hiring and the share hiking pay.”

Labor shortages are great news for American workers. Tight markets put the age-old supply and demand economic truism into effect. When workers are in short supply, the demand for them goes up, and wages rise accordingly. An extra worker bonus: employers are incentivized to better train their staff to avoid the expense of finding an already proficient worker.

Increasing immigration is a big boon to employers who can hire cheaper labor, and increase their profits. But more immigration is bad news for unemployed, underemployed and underpaid Americans.

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