Greenspan said the number of workers who have remained jobless for long periods during the recession is â€?what really concerns me.â€?Greenspan worries way to much — because Americans that have outmoded job skills and out-of-date PhDs from schools like MIT will have plenty of time to go to their local community colleges to get up to speed once companies are hiring again. What Greenspan really means is that the H-1B cap needs to be increased NOW so that the instant employers need someone with the skills-of-the-day, geniuses from Mumbai can come here and hit the ground running.
â€?These people are losing their skills,â€? Greenspan said. â€?It is very critical that those people have the skills when the economy comes back or we will not be as productive as we ought to be.â€? [Greenspan Sees Jobs Rebound as Stretched Companies Boost Output ]
Remember in 2006 when Greenspan was worried about shortages of workers that will result if immigration was restricted?
Imbalances in the labor markets perhaps may have even more serious implications for potential inflation pressures. While the pool of officially unemployed and those otherwise willing to work may continue to shrink, as it has persistently over the past seven years, there is an effective limit to new hiring, unless immigration is uncapped.Just a year ago in 2008 Greenspan seemed far less worried about jobless Americans than the scary scenario of Americans demanding and getting higher salaries. Well, at least that problem was solved!
"Significantly opening up immigration to skilled workers solves two problems," he said. The companies could hire the educated workers they need. And those workers would compete with high-income people, driving more income equality".Greenspan helped create the housing bubble but he also knows how to solve it [2008 WSJ article]. Once again, the solution is to let in more H-1Bs. Are you surprised?
"The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants," he said. The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.