Cataclysmically Bad May BLS Report, Soaring Immigration, Advancing Automation, Set Backs for U.S. Workers

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By Joe Guzzardi

Joe is a CAPS Senior Writing Fellow whose commentaries about California's social issues have run in newspapers throughout California and the country for nearly 30 years. Contact Joe at joeguzzardi@capsweb.org, or find him on Twitter @joeguzzardi19.

The writer's views are his own.

June 3, 2016

Analysts hoped that the May Bureau of Labor Statistics report would show job creation at 164,000. Instead, BLS reported only a feeble 38,000 new jobs. Save for slight employment upticks in health care and professional services, many of them part-time positions, the BLS data was bad.

Better paying, blue-collar jobs in construction and manufacturing declined by about 33,000. The civilian labor force participation rate decreased by 0.2 percentage point to 62.6 percent as more than 450,000 workers left the labor market in May. People not in the labor force hit a record 94.7 million, 600,000 more than April’s figure.

The number of workers who would like full-time employment, but can find only part-time positions, increased by nearly half a million to 6.4 million. The artificially low 4.7 percent unemployment rate fools no one. Finally, as if the May report is not grim enough, March and April job growth was revised downward from, respectively, 208,000 and 186,000 to 160,000 and 123,000.

BLS disaster, kiosks, robots replacing humans –
and we need more immigration?

Although unchanged in May, over the last months, retail has performed better than most sectors. Even though mostly part-time and low-paying, retail jobs help people get a foot in the labor market, and gain important experience that they can include on their resumes.

But retail is under siege, and those jobs could vanish, especially if a $15 minimum wage becomes mandatory. Ed Rensi, former McDonald’s USA Chief Executive Officer, told Fox Business News that his takeaway after attending the National Restaurant Show was that food chains can buy a robotic arm for $35,000 that could easily replace and more efficiently bag French fries than a $15 an hour employee. Rensi called the $15 hourly wage nonsense, very destructive and inflationary, and predicted that “it’s going to cause a job loss across this country like you’re not going to believe.”

Rensi said that nobody in Washington has a clue, and advocates for a multi-faceted wage program that the states would manage. High school kids would get a student wage, and entry-level workers would qualify for a higher wage. Watch Rensi’s interview here.

365 by Whole Foods stores have already started to fulfill Rensi’s nightmare prediction of automation leading to American workers’ mass layoffs. In Los Angeles, where California state and local laws will gradually raise the minimum wage to $15 by 2022, the revamped Whole Foods will use about two-thirds fewer workers than a traditional store as automation slowly pushes workers out the door. In his interview with NPR, David Livingston, a grocery store expert, echoed Rensi when he said that for retailers, the $15 wage “doesn’t work.”

Couple the irreversible trend toward automation – “whether you like it or not,” as Rensi put it – with staggering, unsustainable immigration increases, and American workers are under siege.

According to Census Bureau data, legal and illegal immigration increased by 3.1 million, a 39 percent increase during the last two years. Temporary and permanent legal immigrants – all work-authorized – grew from 1.6 million in 2012-2013 to 2 million in 2014-2015. During the same period, the illegal immigrant population, many of whom work off the books, increased from 1.6 million to 2 million.

Mandatory E-Verify would help American workers get increasingly scarce jobs. Congress has stalled on E-Verify for years. Go to the CAPS Action Alert page here to encourage your U.S. House representative to push for a full floor vote on E-Verify, an action that House Speaker Paul Ryan does not support

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