Immigration and unemployment

Long before there was a Republican Party, the idea that free trade and immigration foster economic growth was a staple among many Americans. Even today, there are few on the right side of the political spectrum who have bothered to review this centuries-old logic or examine the considerable amount of empirical evidence that has been gathered from decades of quasi-free trade or 47 years of mass foreign immigration.

Last month's unemployment report was not good. While the U3 unemployment rate was only 8.1 percent, which is bad but not disastrous, the number of Americans not working was actually much higher than it would appear due to the statistical games being played by the Bureau of Labor Statistics. Since the unemployment rate is calculated by dividing the number of unemployed people by the total number of people in the labor force, the BLS keeps the rate down by reducing the size of the labor force. For example, in the April unemployment report, it was reported that the size of the civilian labor force shrank from 154.7 million to 154.5 million.

This allowed the number of workers employed to decline by 169,000 at the same time that the number of unemployed also declined, by 173,000. So, the unemployment rate went down, from 8.2 percent to 8.1 percent, despite there being fewer employed Americans.

That is why the more useful figure to examine is the employment-population rate, which compares the number of employed workers to the total population. That number is officially 58.4 percent, but again, the BLS is playing definitional games, as that would indicate a U.S. population of only 242.9 million rather than the 313.5 million. The BLS claims to only be counting "the civilian noninstitutional population ages 16 and older," but given the way in which it manipulates "the civilian labor force," utilizing the actual population reduces the scope for misleading statistical shenanigans.

With 141,865,000 people employed in a population of 313,460,000, the actual employment-population rate in April 2012 is 45.3, which means that fewer than one in two Americans of all ages are employed. Now let's look at how that compared to November 1986, which marked the passage of the Immigration Reform and Control Act that led to the significant increase in immigration over the last quarter-century.

The BLS reports 110,751,000 Americans were employed that month out of a population of 239,844,246. This is an employment-population rate of 46.2 percent. This doesn't seem too significant, except that according to conventional pro-immigration economic arguments, the addition of some 40 million immigrants during that time should have massively increased the rate of GDP growth and increased the employment-population rate, instead of slowing the former and reducing the latter. While it would be simplistic and incorrect to claim that the present economic depression is a result of this mass immigration, it is entirely justified to conclude the argument that immigration is intrinsically good for the economy is empirically false.

As for free trade, if you stop and carefully think through the matter, it will eventually become apparent that unfettered globalism is both the underlying conceptual foundation as well as the ultimate consequence of it. To accept the concept of free trade and its necessary consequences, such as free labor, unlimited immigration and universal citizenship, it is necessary to reject the U.S. Constitution and the idea of limited government as well as everything that history has taught us about cultural, ethnic, national and religious differences.

Free labor and free trade are doctrines no less utopian, and no less ultimately destructive to society, than scientific socialism and feminist equalitarianism. Note that their primary justification is collective enrichment at the expense of certain individuals that is virtually identical to the Marxist justification of socialist distribution; these justifications are among the many theoretical connections between Karl Marx and David Ricardo. The idea that the doctrine of free trade is ultimately and inevitably anti-liberty will be a hard lesson for many conservatives and libertarians to accept, as it is somewhat counter-intuitive. But the logic is remorseless, and the conclusion is not one that can be reasonably escaped.