Trump's economic experiment on jobs and restricted immigration
The nation's unemployment rate is at a 49-year low and wages are finally rising after years of stagnation. But President Trump is handling the tight labor market by restricting immigration laws, not loosening them as previous administrations have done.One of the benefits of this policy is that people who have been locked out of the job market for years are coming back into the labor force. This is one of the reasons why you are seeing a record low unemployment rate for blacks and Hispanics. It was one of the things Trump pushed on the campaign trail and it appears to be working. This should be bad news for Democrats who have counted on dependency by these groups to win elections.
He's effectively conducting an economic experiment: Will the problem of a tight labor market solve itself by forcing wages higher or will the lack of new workers hobble that growth?
The unemployment rate in May fell to 3.8 percent, the lowest it has been since 1969. Average hourly wages have risen by 2.7 percent, or 71 cents over the past year. In June, Costco reported that it would set its minimum opening wage at $14 an hour, a $1 boost for an entry-level position.
Employers are literally starved for workers, says William Dunkelberg, chief economist for the National Federation of Independent Business, the main trade group for small business. “We’re doing things like being less strict on drug testing and investing even more in training to make unqualified people a little less unqualified,” Dunkelberg told the Washington Examiner.
The labor shortage is creating problems because without workers, work isn’t getting done. “The biggest complaint and largest shortage we have now among our members is in construction. It's pretty clear we would be building houses a lot faster and prices wouldn't be rising so fast if we could hire more workers … You can get all of the supplies you need. You just cannot get the people to paste them together.”