The latest Labor Department jobs report shows native-born workers gaining jobs rapidly while foreign-born workers are losing jobs, netting to a flat jobs market over the last three months.
Some call this “worrying,” which is fine if it motivates “too late” Jay Powell to allow the Fed to reduce the Federal funds rate. But a much more apt description than worrying is “transitional” and even “healthy.”
If you look under the hood from the top-line numbers, what you find is that employment by foreign-born workers is down 765,000 over the last three months, for an average monthly decline of 255,000. Worry not. Employment by foreign-born workers is still up almost 5.5 million since Joe Biden took over the White House in 2021.
In contrast, employment by native-born workers is up an average of 217,000 jobs a month over the last quarter. That’s a very strong number. Looking at the patterns for native and foreign-born workers reveals a labor market and economy in transition in favor of the native born.
Fully appreciating the jobs figures for native-born workers requires a bit of context. Before the pandemic, their employment stood at about 131 million, returning to that level by August of 2023. When Biden left the White House, native-born employment had fallen by about a half million jobs from its post-pandemic recovery.
Simply put, in the latter part of his term Biden made the U.S. economy a jobs factory for foreign workers while leaving many American workers out in the cold.
President Trump came into office promising to crack down on illegal immigration by removing illegals and closing the border. He’s doing both. And that’s what we’re seeing in the jobs figures – a transition from Biden’s open borders workforce to a workforce of and for American workers.
But, like most transitions, this one is going to be messy. Some, but likely not many of those jobs taken by foreign workers would have been taken by American workers. Many American businesses will have to adjust accordingly by seeking out various labor-saving improvements such as changes in service, management, or the accelerated adoption of new technology. You know those tablets that wait staff sometimes use in restaurants? They will soon be ubiquitous.
Some industries will have particular trouble adapting, like hospitality, grooming, and construction.
Those pleasant slow-moving hotel staff may soon be rapidly moving, well-equipped cleaning technicians. They will also be much better paid, by the way.
Ready to have a robot become your hairstylist? “A little more off the top, please, Robbie.” (For you youngsters who don’t know the reference, check out the great oldie “Forbidden Planet” or the less great “Lost in Space.”)
Construction may have to evolve, for example by increasing the use of prefab elements.
Even agriculture will have to find ways to substitute capital for low-skilled, low-wage workers. Maybe this will create renewed pressures for immigration reform centered on a well-constructed and enforced seasonal worker program.
Another consequence of this transition and the ensuing boom in business investment will be higher wages for lower-skilled native-born workers as they become better-skilled and more productive.
This is how you improve the lives of the working poor, not with tax credits or self-destructive gimmicks like raising the minimum wage. Creating prosperity for the working poor substantively and sustainably begins and ends with giving them the tools and training to be more productive and thus meriting and getting higher wages.
The jobs report reflected an economy in a very healthy transition. It reflected just one of the many consequences of America First.
JD Foster is the former chief economist at the Office of Management and Budget and former chief economist and senior vice president at the U.S. Chamber of Commerce. He now resides in relative freedom in the hills of Idaho.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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