Something very strange is going on in America’s labor market. The employer’s survey in the June jobs report showed 272,000 jobs gained in May, and nearly 2.8 million jobs over the past year. These are both amazing figures given that the economy is at full employment.
While the employer’s survey is surely fine, the household survey, also produced by the Bureau of Labor Statistics (BLS), tells a strikingly different story, almost as though the country had two different labor markets.
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The Congressional Budget Office (CBO) projects that the ongoing surge in immigration, both legal and illegal, will put “downward pressure” on inflation-adjusted wages through 2034, according to a recently released report.
The downward effect on real wages will continue until 2027, at which point it will “partially reverse,” with immigration still expected to cause average real wages to be lower in 2034 than they otherwise would be, according to CBO. CBO did predict some positive impacts of immigration, as well, such as increased GDP growth and an expanded labor force.
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In what is sure to have significant implications for millions of American workers, specifically gig economy workers and contractors, the Department of Labor (DOL) issued its long-awaited final worker classification rule in January.
The new rule revises the process to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act. The government argues the rule is necessary to ensure that all workers are provided fair wages and overtime since independent contractors (people who work for themselves or a business on a contractual basis) are not given the same benefits, such as tax withholdings and paid time off, as traditional employees. However, this argument appears designed to mask the government’s true intention, which is to reduce the number of independent contractors in the country.
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