Alan Krueger, the White House’s top economist, is arguing for increased immigration to meet the needs of employers in the future.
He argues that Congress should not be distracted by the currently unacceptably high level of unemployment and focus instead on how many low wage workers employers would like to be able to hire in the future. His argument supports the Senate Gang of 8’s proposal to add an annual stream of up to 200,000 additional foreign low-wage workers to the workforce. Those are workers who would be able to stay permanently rather than return home like guestworkers.
The problem with that approach is that it ignores the fact that investment in new business is shaped among other things by the availability and cost of labor. If there is a scarcity of low-wage workers, investors will take that into account in their plans. They will invest in more automation or more in value-added enterprise rather than business that depends on low-wage workers. It also ignores that increasing the supply of low-wage workers would depress upward pressure on wages and keep low-wage workers dependent on social assistance programs to help them rise above poverty.
The issue then becomes one of vision. Do we want to perpetuate and expand the ranks of the working poor or do we want to adopt policies designed to shape the economy towards expanded opportunities for gaining middle income jobs?