Gift this articleA basic tenet of textbook economics says when the government sets a limit on something at a lower level than the free market would, there will be “cheating” to get around that limit. Set cigarette import duties high enough, and smugglers will bring in the goods illegally.
That’s been the case for decades now with regard to demand for foreign labor in the US. But rather than raising the limit for overseas workers to come and fill open jobs in the US, the political climate is turning decidedly against migrants — amid a wave of public concern over issues ranging from crime to the lack of housing.
Lost in much of the public angst over migration is that the US has never relied more on the foreign-born for economic growth. The 49.5 million living in the country — legally or undocumented — make up 15% of the population, a record in data going back almost two centuries, an analysis by the conservative think tank Center for Immigration Studies found.
It’s context that’s not lost on employers, however, who are desperate to hire and expand.
“We have this policy schizophrenia in the US right now,” says Brian Turmail, a vice president at the Associated General Contractors of America. “We don’t want our own children to work in construction, but we don’t want to let other people to come into the country to do it either, yet we want to build a lot of things.”
Turmail’s group is planning its first-ever targeted ads on immigration in this year’s congressional campaigns.
It’s not alone. Associated Equipment Distributors, a trade group for heavy equipment makers, is trying to raise awareness of labor shortages by bringing members to Washington to lobby for more legal immigration.
“There’s not a member of Congress who hasn’t seen ‘Help Wanted’ signs outside restaurants and other businesses,” says the AED’s Daniel Fisher. “We’re just trying to make it known that ‘Hey, we have this need also.’”
Over at the Critical Labor Coalition, which includes Chipotle Mexican Grill and Yum Brands, there’s a recognition about being careful with the way issues are framed.
“Even using the word ‘immigration’ on the Hill is something that you do not want to do because it is so political right now,” says Misty Chally, executive director of the Critical Labor Coalition, of Capitol Hill. “We use the word ‘workforce solutions.’”
“I have been doing this for 25 years now, and I have never seen it this partisan,” she adds.
Need-to-Know Research
An examination of the quantitative tightening (QT) programs by advanced-economy central banks shows that the impact so far of shrinking central banks’ bond portfolios has been, all in all, fairly limited.
“The results suggest that QT programs have been successful so far,” Wenxin Du, Kristin Forbes and Matthew Luzzetti wrote in a paper presented at a US monetary forum last week. “They are largely ‘in the background’” but at the same time provided “a small degree of support in central banks’ efforts to tighten financial conditions.”
While things could change, so far, nonbanks such as hedge funds, pension funds and other players have stepped in as buyers in place of central banks.
“The hope is that careful monitoring of market conditions will provide information” on when central banks are nearing optimal levels for bank reserves — which get drained over time by QT — the authors wrote.
On #EconX
What happened to the unemployment-inflation link?
I’m Chris Anstey, a senior economics editor in Boston, and today we’re looking at Enda Curran’s and Augusta Saraiva’s reporting on the immigration debate.
Source: www.bloomberg.com