This Issue: August jobs report shows continued economic recovery from the COVID-19 shutdown. But long-term projections show immigration-driven population growth will continue to outpace job creation

The monthly jobs figures from the Bureau of Labor Statistics came out this morning. It was another positive report that gives many economic forecasters optimism that the economy is moving in the right direction.

The best news is that 3.8 million more were employed in August than in July, and most of those gains were full-time jobs. That's a huge jump, and we should be thankful that employment levels so far have sharply rebounded from the massive losses due to the COVID-19 shutdown.

However, the number of people employed in August 2020 was 10.6 million less than in August 2019.

While we don't comment on the jobs report every month, we do dig into the numbers regularly. What we follow are trends -- how the labor market looks over time.

Notice we refer to the labor market and not to the economy. The "economy" has come to denote how Wall Street is performing, and how much the Gross Domestic Product is increasing year to year; how much the "economy is growing." This is often disconnected, and many times divorced, from what the employment situation is like for American workers. The bifurcation of the two measures is a very good illustration of how growth is not the same as prosperity.

This week, the BLS also put out employment projections from 2019 to 2029. It projected that the working-age population will grow by 8 million. However, the number of employed is projected to grow by only 6 million. That's a deficit of two million. That's just a little less than the 2.5 million deficit between the growth of the working-age population and the number employed from 2000-2009. This trend is a major problem.

Let's look back to 2000, pre-9/11 and Great Recession, two major events, which, like the COVID-19 economic shutdown, wreaked havoc on the U.S. employment situation. Since 2000, the working-age population has grown by 49.1 million. The number of employed has grown only by 10.7 million. That's a difference of 38.4 million!

The reason isn't just attributable to an aging workforce -- Boomers can't be blamed for everything! At this point, a little less than half of the growth in the working-age population who are not employed is due to workers retiring. And it is the case that a substantial number of post-65 workers don't want to, or choose not to, retire. As Americans live longer, they work longer. That's understandable, but it does hurt younger workers, when it comes to both job opportunities and wage growth.

Economists agree there is a genuine problem as the population grows faster than employment. There are two main solutions offered to deal with it.

• The first is to accelerate economic growth (increase GDP) through immigration, which, proponents of this strategy argue, will magically (they really have no other explanation) create more than enough jobs to go around. There are plenty of economists who make the argument that even now there is a labor shortage in the United States and a need for immigration increases. Obviously we disagree
• The second main solution that is offered is to deal with automation and off-shoring which economists agree will continue to send some jobs overseas and make many others obsolete.

There are ways to deal with offshoring and automation. The President has talked a great deal about "bringing jobs home," and he has had some success, but there is only so much any President can do when corporations are intent on maximizing profits by minimizing labor costs and have opportunities to relocate operation overseas.

Unfortunately, almost no politician at the national level is talking about job losses due to automation. The fact that this would undermine the "need" for more immigration probably has a lot to do with that. Yet, it is a problem we are going to have to confront.

A third way to deal with the problem, but one avoided by economists quoted in the media, is to address the actual underlying cause -- immigration-driven population growth. When there are still 13.6 million officially unemployed and, according to the Center for Immigration Studies, 55 million more people of working-age not in the labor force (June 2020), there is no need to bring in more workers to compete for jobs that are already too hard to come by.

Overall levels of immigration must be reduced if the current trend of chronic unemployment is to be reversed.

Eric Ruark, Director of Research