Where Did 2.5 Million Native Working Men Go?

I worked on the revision to my paper on the labor supply of immigrants earlier this month. I also played around with the data some, and was struck by the substantial rise in the number of prime-age native men who do not work at all during an entire calendar year.

trend-in-nonworkers

The graph uses March CPS data and shows the trend in the percent of men who did not work at all during the calendar year prior to the survey. It is obvious that there was a substantial increase in the fraction of “permanent” joblessness after the Great Recession. Although there has been some recovery, the situation is still dismal for many. Just compare the data for 2000 and 2016: In 2000, 8 percent of prime-age men didn’t work at all. Today, that number is 13 percent. There are about 50 million men in this age group, so that around 2.5 million prime-age men have joined the rank of permanent joblessness since 2000.

It would be a mistake to interpret the graph as suggesting a causal link between immigration and the dramatic rise in permanent joblessness among native men. But the data clearly suggest that if one wishes to understand the economic dissatisfaction that motivated a lot of the political action this year, this graph would not be a bad place to start. It may be that: “It’s all jobs, stupid.”

The very simple STATA code that generates the graph follows, so reproduce to your heart’s content.

Continue reading “Where Did 2.5 Million Native Working Men Go?”

Carrier And Comprehensive Immigration Reform

There’s been a lot of criticism from free-market types since President-elect Trump announced the Carrier deal, which will keep around 1,000 jobs in Ohio Indiana (see the Larry Summers take here). Some of that criticism is warranted–in an ideal world, it would indeed be ideal to let the market decide who the winners and losers are. But there is also a lot of hypocrisy in many of the over-the-top reactions.

As an obvious example, I don’t recall much hand-wringing about the excessive labor market manipulation built into the comprehensive immigration reform legislation that President Obama and Senators Schumer, Rubio, et al, tried to ram through Congress a few years ago. So I thought it’d be fun to illustrate just how visible the invisible hand became in that context.

This screenshot is from bill S.744, describing job categories to be covered by a proposed “agricultural worker program.”

s444-jobs

And this screenshot is the section of the bill stating what the salary must be for such jobs–down to the penny and year by year.

s444-wage-rates

It seems to me that if the objective is simply to criticize government intervention in the labor market, the comprehensive immigration reform legislation would have provided ample opportunities. Do we really need Stalinist five-year plans stating precisely what the wage rate must be in particular occupations?

Which brings me to a related question: Who paid whom to get those hourly wage rates written into law?