Saturday, May 11, 2019

Job Opening Excess Does Not Mean The US Needs Additional Labor

My published comment to The Wall Street Journal, Opinion, "Help Wanted in the U.S.A.: More guest workers would ease the growing labor shortage." by The Editorial Board:
The existence of [excess] job openings does not equate to a need for additional labor. There will always be marginal businesses that do not have the funds to invest in equipment, that are profitable and exist only if labor is very cheap. Keeping labor costs low by importing more labor leads to a misallocation of resources into unsustainable businesses that are unneeded, inefficient and have artificially low product prices. When the WWII Bracero guest migrant agricultural worker program, which existed from 1942 to 1964, ended in 1964, farming equipment replaced the lost workers without a loss of output. Additionally, as workers gain experience, they move into higher productivity jobs at higher wages at the same or different firms. An unfillable opening at the lower wage previous job is a signal to the employer that its products and processes are inefficient and lack needed added consumer value to allow the payment of a competitive wage. Importing cheap labor distorts capital investment.

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