Recent Employment Trends Among Native and Foreign-Born Workers

The latest report from the Labor Bureau indicates that native-born workers are quickly gaining jobs, while those born abroad have seen job losses amid a stagnant employment market over the last three months.

This situation raises some concerns, or perhaps “worries,” particularly if it pushes Jay Powell to lower federal funding rates now, albeit a bit late. But is it really just worry? A better interpretation might be “transition” or even “health” of the employment landscape.

Diving deeper into the statistics, foreign-born employment has dropped by approximately 765,000 over the past three months, averaging about 255,000 fewer jobs per month. However, don’t panic—since President Biden assumed office in 2021, jobs for foreign-born workers have grown by nearly 5.5 million.

In contrast, native-born worker employment has seen a robust increase, averaging 217,000 new jobs each month over the previous quarter. That’s a strong performance. Examining the trends between native and foreign-born workers reveals a shift in our labor market and economic landscape.

To fully understand the employment figures for native-born workers, some context is necessary. Pre-pandemic, their employment stood at approximately 131 million, and by August 2023, they had returned to that level. Interestingly, when Biden was leaving office, native-born jobs had decreased by about half a million from the recovery period post-pandemic.

Essentially, during his term, Biden transformed the U.S. economy into one that primarily benefited foreign workers, leaving many American workers behind.

On the other hand, President Trump entered office with a commitment to curb illegal immigration, managing to do so effectively, which is evident in recent employment numbers. We are witnessing a transition back to a predominantly American workforce.

Like most transitions, this shift could be quite messy. Sure, many of the jobs that foreign workers once held are now occupied by Americans. However, companies will need to adapt, enhancing their workforce for improved service, management, or technology integration. Just think about those tablets staff use at restaurants—they’re becoming ubiquitous.

Some sectors are having a harder time adjusting, especially in hospitality, grooming, and construction.

Consider the hotel staff—once slow-paced, they might soon be transformed into highly efficient cleaning technicians, and yes, they’ll likely earn better wages.

Ready to let a robot style your hair? “Go a bit higher, please!” (For the younger folks, check out classic sci-fi films like “Forbidden Planet” or “Lost Universe” for context).

In construction, the industry might need to innovate, perhaps by increasing the use of prefabricated elements.

Even in agriculture, there’s a need to replace low-skill, low-wage labor with capital investments. This might create a push for immigration reform focused on a well-organized seasonal worker program.

Another potential outcome of this transition and the related surge in business investment could lead to higher wages for skilled, native-born workers as their productivity improves.

This approach—enhancing the livelihood of the working poor—seems much more effective than temporary solutions like tax credits or increasing minimum wage. True prosperity for the working poor starts with equipping them with the necessary skills and training, allowing them to earn higher wages.

Overall, these employment reports signal a healthy transition in the economy. They reflect just one aspect of a broader narrative in America.