New Data Suggests Immigration Policy is Slowing Jobs Market, with Guy Berger

In this podcast episode, I talk with Guy Berger about new data that suggests that immigration policy is slowing the jobs market. See Homebase's Main Street Health Report here: https://www.joinhomebase.com/data/september-2026-main-street-health-report Guy Berger is a macroeconomist with expertise in US labor markets. Aside from his role as Chief Economist at Homebase, he is currently Senior Advisor on Labor Markets at Access/Macro. He was previously the Principal Economist at LinkedIn, and has also worked as an economist at Bank of America and the Royal Bank of Scotland. His work includes the creation of novel economic indicators, the development of models linking the macroeconomy to business performance, and the design of economic reports. His commentary has been featured frequently in the media, including the New York Times, Wall Street Journal, Washington Post, Marketplace, CNBC, Bloomberg, Yahoo! Finance, and Axios. Guy holds a doctorate in economics from Yale University.

• 0:03Speaker 00

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• 0:35Speaker 00

  Guy Berger, welcome to the conversation today.

• 0:37Speaker 01

  It's good to be here, John.

• 0:38Speaker 00

  It's a pleasure to be sitting down with you. You're joining us from the Bay Area. I'm south of Salt Lake City in Utah. And today, we're going to be talking about a recent report that shows how immigration policy is slowing the jobs market. You know, I think this is a really important conversation to be had, and it's always great when we have some, some new data to be able to, you know, have a data-informed conversation around it. And certainly, you know, there's lots of political conversation around this topic. There's lots of, you know, divided conversation around this topic. And so to be able to peel back, you know, the, the, the political divide and to peel back, you know, any partisan

• 1:21Speaker 00

  kind of rhetoric that's happening and to just talk the numbers and to be able to talk about what's actually happening, I think is always helpful. And so that's what we aim to do today. And I'm excited to, to sit down and, and have that conversation with you. As we get started, I wanted to share Guy's bio with everybody. Guy Berger is a macroeconomist with expertise in US labor markets. Aside from his role as chief economist at Homebase, he is currently senior advisor on labor markets at Access Macro. He was previously the principal economist at LinkedIn and has also worked as an economist at Bank of America and the Royal Bank of Scotland. His work includes the creation of novel economic

• 2:02Speaker 00

  indicators and the development of models linking the macroeconomy to business performance and the design of economic reports. His commentary has been featured frequently in the media, including The New York Times, Wall Street Journal, Washington Post, Marketplace, CNBC, Bloomberg, Yahoo Finance, and Axios. Guy holds a doctorate in economics from Yale University. Clearly a tremendous background. Thank you for sharing your expertise with me, my audience. And before we dive on in, anything else you would like to share about your personal background before we dive on in?

• 2:36Speaker 01

  Just that I'm a giant labor market data nerd. And even though we only have, I think, like some set amount of time to chat, you know, you could, I could keep going all day.

• 2:46Speaker 01

  So it's good you have an endpoint, because I may have other things to do today besides to talk about data, but we could keep going for a long time, John.

• 2:52Speaker 00

  I love it. I love it. Labor market nerd is a new label, and we should get you a T-shirt. And maybe you already have one, but

• 3:01Speaker 01

  I should. I should. I'm gonna talk to some of my peers and do it.

• 3:05Speaker 00

  Yeah. Well, why don't we start with a little bit of an overview to this new report out from Homebase on the immigration policy and how it's impacting the jobs market? Tell us a little bit about the report, a little bit about the methodology, and then we can start to unpack it a bit.

• 3:22Speaker 01

  Yeah, sure. So to start with, I mean, Homebase is a platform for hourly, for, for small businesses. And we have lots of hourly workers, and these hourly workers clock in and tell us, you know, I'm, I'm working. Someone tells us how many hours they work, what the wages they get, some other stuff that we're rolling out. But most of the report basically tracks that labor market activity that's associated with small businesses and their hourly workers. And so, for example, we can track how many people worked in a certain month, how many hours they worked total, what happens to wage growth over time. We can track turnover, where that is how many workers are being hired, and also how many workers are turning over, exiting the roles. And that can be quits, or layoffs, or retirements for that matter. So this is huge range of data. As a labor market nerd,

• 4:07Speaker 01

  I mean, if you allow me to nerd out, I'm really excited about this. I mean, we've been producing this for a long time, by the way, but we are, we're doing a bunch of stuff that makes this data more tractable. And we're going to be adding more things that we track that are pretty unique to this data set in the coming months. So stay tuned, but this report comes out every month. And so just before the BLS report, a few days before, so you can always come back to it and say what's happening on, on Main Street, and in small, America's small businesses, and their, their labor market universe.

• 4:35Speaker 00

  Yeah, awesome. So if you were going to highlight, you know, maybe two or three main core findings from this report, what would they be?

• 4:45Speaker 01

  Well, I'd say the number one thing that I would highlight, and I think this is striking, because I've sort of been staring at this report now for as long as I've been at Homebase and waiting for this to happen. And I keep telling my, my comms partners, this is coming, this is coming. And it finally happened this month, is hiring turning positive year over year. We have been in this extent, this is not unique to Homebase, but has been visible in Homebase, is that this extended period of labor market cooling or hiring, that is, people starting new jobs is coming down. It's generated all sorts of phrases like, you know, the, the frozen labor market. At some point, I was using the term the great stay. And it was starting to slow already last year, and now it's finally stopped. And it's visible in our data. Our data is not the only place where it's visible. You'll

• 5:28Speaker 01

  see it in other sources. But I think it's a big deal, because I think hiring is one of the biggest indicators of how warm a labor market is. When it's going down, labor market's getting worse. And when it's picking up, labor market's getting warmer. And so it seems like we are exiting the cooling stage, and things are starting to get warmer. From the perspective of employees, this is a good thing, because it means more opportunities for them, and essentially more burning power. From the perspective of employers, I mean, it's an environment that encourages it. So I think from that perspective, it's, it's happening in a good time. But it does mean that employers are going to have, if this continues, they're going to have to hustle a little harder to lure and retain their employees.

• 6:11Speaker 00

  Yeah, which ultimately, you know, from my perspective, my bias as a human capital guy, you know, I think that's a good thing.

• 6:19Speaker 01

  It is a good thing.

• 6:20Speaker 00

  I, I, you know, I've, I've looked in somewhat horror, you know, as I've looked at the oracles of the world, you know, it's one thing to have layoffs, right? Like, tech layoffs are not new. And so you've had lots of the big tech companies that have done layoffs. But it's one thing to have layoffs. It's another thing to send out 6:00 AM mass emails to, you know, people who've been at a company for 20 years, and to just say, thanks, bye, you know, just the, the lack of humanity in it. It is, is, it just blows my mind. I can't, I can't believe almost what, what we've seen this past year, in how, you know, companies have, you know, from my point of view, have been like totally taking their employees for granted. And so, you know, I'm, I'm excited to maybe see

• 7:05Speaker 00

  the pendulum swing a little bit back.

• 7:08Speaker 01

  A little, by the way, like, it's kind of like, it is, the way I joke about it is it's jarring, just because it's happened. We've had a few years of this, like, moving in the wrong direction. And so it's surprising to see it moving in the right direction. But like, to get, but even back to where we were in the late 20 teens, much less to get back to where the peak of the resignation, it's going to take a lot more than what we've seen. We're moving in that direction, but at this current pace to get there is going to take a long time.

• 7:33Speaker 00

  Yeah, yeah. So, so that's, that's super interesting, though, that you've seen, you've seen it moving this direction. And finally, this month, we, we've kind of hit that tipping point.

• 7:43Speaker 01

  Yeah.

• 7:44Speaker 00

  Towards hiring. That's a really positive development. So that's, that's wonderful. And we'll see how it continues in the coming months, to see if it's a blip, to see if it continues in that direction. Yeah, that's super interesting. What, what are some of the other key findings, key trends that you've seen in this report?

• 8:04Speaker 01

  Well, so that brings us to what you teased earlier regarding immigration. Again, I'm going to give you an economist perspective on immigration. I think it's a hot button issue, you've got all different perspectives. I'm not going to touch that. And I'm going to, like, I'm going to focus on what we actually see. I mean, the interesting thing about this is, we are used to, and I think this is sort of a very standard way that people think about the job market, when you read like the, the front page of a major business publication, your Times, the Journal, etc., or, or just Talking Heads on CNBC, their mentality has always been, understandably, big job growth is a strong labor market, and low job growth, or even negative job growth, is a bad job market. And it's still true, by the way, that like, the stronger, you know, bigger numbers are better than

• 8:49Speaker 01

  the lower numbers. But the

• 8:53Speaker 01

  The normal has changed a lot in the sense of what we need to keep the labor market like steady, not warming or not cooling. Labor supply has slowed a lot and there's two factors behind it. One of which is a very long term one and one of which is a short term one. The long term ones are populations aging. The working, the, the, the, out of people that are already here, the native born populate, the native born population is getting older. And really immigrants are already here as well are getting older. And so the working population is basically barely growing. And so just to keep that, let's keep that population selling market steady, you need basically close to zero. Um, employment growth and that's lower in the past, they were still growing because you still had like, you know, people are having more kids.

• 9:39Speaker 01

  And so the work, you need a lot of jobs each month just to keep ahead of the job market. That's not true anymore. The other thing, and this is a recent thing that has happened in the past, let's say two years is we're coming from a period of unusually high immigration. Where that kind of offset those, that aging of the, the, the, the, the population already living here to a period where there's very little, virtually no immigration. I think there's some debate. I think we don't have great stats on whether immigration has totally stopped or turned negative. Um, I think people tend to focus on, um, because of the headlines on, and again, this is purely from economics, but I'm not judging the ethics or policy of it.

• 10:19Speaker 01

  I think you'll tend to overrate deportations versus the fact that we've turned off the tap of people coming in. I think that actually has been probably a bigger, a much bigger like numerical effect. And so as a result, I do not subscribe necessarily. Let me say this way, I'm not convinced by arguments that this is what's caused the labor market to turn around. Last year with the labor market got worse and we saw a big slowdown in employment growth. I don't, I do not find that to be, or at least let me say this way, I haven't seen very persuasive like arguments that, that there's sort of that the labor market warming is a result of it. But I think it is true that we, we can have labor market warming now with much, much, much lower growth in employment.

• 11:00Speaker 01

  And in fact, in our data, and this may have to do with the industries because the, the BLS data is showing some ongoing slight growth. But in our data, we're actually seeing this warming, the labor market happening, even as the volume of employees working is falling a little bit. Not by a lot, but by a little bit. I suspect that, that our industries, the industries are in our data on Main Street are probably more vulnerable to this immigration slowdown or crackdown than, um, the general workforce.

• 11:27Speaker 00

  Yeah, yeah. Interesting. And, and I think you're right. Like, like the, the turning off of the tap or the closing of the tap of the inflow of immigration. The chilling effect of policy on, on the inflow of immigration certainly has a big impact, right? Probably much greater than any deportations I would have. That's a relatively small number in comparison, I would imagine. Um, yeah, I think that's right. And so I'm also wondering, so, so we have, we have, uh, you know, the warming in the hiring, we have an interesting, uh, situation with, with immigration and its impact on jobs.

• 12:07Speaker 00

  We also are in this dynamic with agentic AI, uh, and how that's impacting organizational hiring trends. I'm wondering if you're seeing anything come out in, in your report as it relates to that.

• 12:20Speaker 01

  So good question. So, so, um, the way I'd say it is, and I think this is important is so far, especially the industries that tend to be heavily represented in, in, in our report, we're talking like food, drinking places, retail, entertainment, healthcare are not the industries, any AI adoptions picked up. But it's still really, really early days for these industries to be affected. Like when we think about industries and I'm sort of stepping outside of the zone of home bases data that have been like radically affected by AI because of the adoption, it's still pretty narrow. We're talking about basically software development. Maybe a few other related roles in tech.

• 12:59Speaker 01

  Um, a lot of industries where most of the activity involves people doing stuff physically or in relation to other people, which a lot of the workers in our, in our, our data are. So far with the current state of technology, um, that it's pretty, the impact's pretty limited. Because you so far cannot have an AI agent serving food. You can have it in the backend potentially doing things. I mean, we hear stories about AI, people using AI for situations. So I think even there candidly, I think we're still in the very early stages of adoption. Um, I think this is, you know, if we have advances, I mean, maybe in five years, you and I are chatting about these amazing advance in robotics and how it's starting to affect what a hourly worker in retail.

• 13:44Speaker 00

  Yeah, the other side of it is automation, right? So the AI component of automation is certainly in the hospitality industry, you know, there, there's at least little, um, sneak peeks into automation and some big hotel chains, some restaurants where, where, you know, you have the serving robots or you have the, the, um, hotel chains with that, you know, send room service to your, you know, room with, with the robot or or the big, you know, essentially the big Roomba vacuums that, that, uh, polish the floors or, or vacuum the hallways, you know, or things like that. Like, so there's more and more of those things popping up, but it's still relatively small, right?

• 14:28Speaker 01

  Extremely like, I mean, I'd say even in core, again, the roles that we don't, don't have that much on the report, the backend of these things. I still think even that is early. Like the way I think of it is like outside of a few niches where it's very advanced, like again, like software development, a lot of it's chatbots. I mean, I'm like, it sounds ridiculous, but like we're so, a lot of us that are very online and I mean, I use Claude very heavily in my research. So upfront, I use it and I'm probably, by the way, I still feel like I'm like a, a grandpa using this technology in this really primitive way. Um, but I use it a lot and, um, I think it's, I would guess that I'm still, even though I feel like I'm very clunky in how I use it, I'm probably still like the 99th percentile of power users.

• 15:14Speaker 01

  Um, and so I think it's sort of that, that by the time this eventually this will make more and more of a difference, but I think it transfers is going to be very slow and a lot of these workers. That degree to which it's going to affect their day to day lives outside of like interacting with a chatbot, or maybe at some point having an agent that does stuff that they query, but like is going to be, is not going to change all their day to day. You're still serving drinks by hand. You're still like working in the kitchen or, or, you know, being a healthcare worker and doing all, all that work very much as you have for a long time.

• 15:44Speaker 00

  Right, right. Very interesting. All right. So we have the, the hiring, uh, warming, we have immigration uh, issues, uh, at least on Main Street, small business, which is 80% plus of, of, um, of workers in America, right, uh, are, are in small business. Um, at least in, in small business, we don't see a huge impact at the moment of, of AI automation and, and those sorts of disruptive technologies having an impact on hiring and, and labor market dynamics. Uh, anything else from the report that is, is sticking out or at least giving you pause as you look into the future?

• 16:26Speaker 01

  Well, so I'd say the other thing, and this is again, something where I'm like really much like the hiring thing, I've sort of been looking out for it and I see it a little bit, but not quite ready to say we're like, we are out of the woods. But one thing you would expect when labor market's warming is you'd expect wage growth to pick up. This is something, by the way, that's been an enigma in a lot of Bureau of Labor Statistics data.

• 16:46Speaker 00

  Yeah.

• 16:47Speaker 01

  Um, because there we still are seeing monthly data where like the wage, wage growth has slowed. In our data, I think we're seeing like tiny glimmers of wage growth picking up a little bit. Again, I don't want to declare victory because it's a small increase so far. Maybe it turns out to be noise, but I generally would expect when hiring and turnover pick up, employers start ramping up pay and benefits to retain workers and to attract new ones. So that's the thing I'm paying attention to. The other thing that is outside the scope of this report, but should be in the back of people's minds. It's kind of a downer because we went through this period of about a decade from about the mid 20 teens until probably two or three years ago. Where benefit costs to employers, at least the part that shows up in a monetary amount were

• 17:32Speaker 01

  growing more slowly than wages. And so what that meant was that when business was going well and employers were thinking of raises, they're like, well, I can't hand over more cash to my employees. What's changed in the last two or three years is that especially these benefit costs and especially health insurance are starting to get much more expensive. And so we are starting to see more of a bite to people's paychecks coming from that. Now it can happen a lot of ways. One is employers reduce their contributions. Another one is that they increase their contributions, but they take it out of the paycheck. The other ones that like, you know, they basically like pick skimpier plans so that the paycheck's not affected, the premiums aren't affected by employer, but, but workers are on the hook for a lot more, more, more expenditures down the line.

• 18:18Speaker 01

  Um, and I think regardless, even when I look here is to some extent, one aspect that I'm thinking about more and it's somewhat less relevant to hourly workers, some of whom do not get healthcare from their, from their insurance and their employer. But they face the problem in a different way. It's just wage growth is going to be a less. A mildly misleading barometer of how well the labor market is do and by the way, as far as employers employees are going, they're like, guy, you are telling this Pollyanna story. I don't think it's bad, but all I'm saying is that I think from the perspective of like, is labor market warming up or not, wage growth might understated a little bit because of the fact that it's not take like, and it's focusing only on part of the comp package.

• 19:02Speaker 01

  Um, and I think that, um, I don't, again, I'm not a healthcare policy guy. I don't know if this is a good, good thing, or I'll let other for employer employees that sucks. But like, I don't know from like a public policy thing, like what should be done, but I'll just say that, um, we got spoiled during this period of low benefit and low health insurance premium cost growth that is going, we're really going, we're really, people hated this last time it happened in the early two thousands, about 20 years ago, and they're going to hate it. They already hate it and they're going to increasingly hate in the years ahead.

• 19:36Speaker 00

  Yeah. And what's crazy to me, you know, I, I can't help, you know, but compare outside of the U S, you know, compared to other parts of the world, you know, because you're, you're absolutely right. When you look at the two thousands and then you look at the teens, like there, there is a stark difference, but still in comparison to pretty much anywhere else in the world, we still saw huge year over year, like increases in cost of healthcare, um, you know, for, for employees and employers, uh, in the U S. Uh, and yeah, and, and now it's just going to be even more. And so it's, it's just, we have this really challenging situation

• 20:17Speaker 00

  in the U S. That's really unsustainable, uh, in terms of, you know, how, how we're going to deal with the cost of healthcare and in our, our model, um, you know, it, it, it's a head scratcher, you know, but because to your point, like what, what ends up happening for most, not, not all, but for most is, is employees end up paying more, um, employers end up, uh, taking more out of employers, uh, the employees paychecks, they also end up paying more and the coverage is less. And, you know, I'm a professor, I'm at a, a state university, um, that actually relatively has awesome benefits compared to most people.

• 20:59Speaker 00

  And I've been here 18 years and my benefits are so much worse than they were when I got hired 18 years ago. Um, they're so much more expensive, uh, so much more comes out of my paycheck and they're so much worse than, than 18 years ago. And that's just the reality, right? That's the reality for everybody. Um, and yeah, it, I don't know, like, I don't know what to do about it. Uh, and, and I'm lucky, I'm lucky compared to most people. Uh, and so, uh, yeah, we, we just get to deal with that and we get to deal with, uh, wage issues more generally, total comp issues more generally. So we'll, we'll see how things continue to play out. Um, one other quick, quick question I had is just in relation

• 21:44Speaker 00

  to, you know, underemployment. Um, and I'm not sure how much that comes out in, in your report and in your data, but you know, we, when we get the official jobs numbers, uh, every month, you know, that's one thing that sometimes, you know, uh, people, uh, really dig into and they kind of critique is, you know, as we look at jobs and we look at unemployment rates, and then we start to look at, um, who's being counted and who's dropped off, um, you know, even looking for jobs and how much underemployment is, you know, is in the number. Um, yeah. What, what, what are you seeing in terms of underemployment in, in your report?

• 22:25Speaker 01

  Great question. So I had like two perspectives on them. The first is I think people are totally right. The unemployment rate does not capture, is not like an all encompassing measure of what I call broadly distress the labor market. It doesn't include people that, for example, have a job, but don't work, want full time hours and can't get them. It doesn't include people that have want a job, but aren't, and are ready to work, but aren't actively looking. So that's a aside, if you're talking about how much, what the total volume of distress in the labor market is, it's higher than the unemployment rate. That said, and I always, that's my throat clearing that I do beforehand. If you include those measures, things are, have gotten better as well in the past. And again, this is something that's changed because it, a year ago, that was not the case, but unemployment's gone down. This broader aggregate

• 23:10Speaker 01

  that includes these other categories has also decreased. And so there's not like, I almost think of that unemployment rate is if you step away from the count and just think of it as a barometer, like are things getting warmer, are things getting colder? It's good as a, even if it's not encompassing, it's a good proxy for everything else, at least at the present. We've seen the number of people that are working part time and wish to have full 10 hours go down a little bit, um, this year, not by a lot, just like unemployment has gone down a little bit, not by a lot, just like in our data and home base, hiring is up a little bit. Like again, none of these are big changes. It's not like, I would not characterize this, the labor market suddenly switched on to a boom. I think it's more that it's changed direction and we've gotten so used to things. And again, we haven't had,

• 23:55Speaker 01

  you know, everybody was worried about recession on, on and on, and in the late, in the early twenties, we didn't experience that, but we experienced what I almost call like a half recession in slow, where we're, you know, look at our, our data, like wage growth decelerated, hiring and turnover fell. Again, these things that happened, it happened very slowly over a very long period of time. And so by the time we were done with these three years, you're like, wow, we experienced like half a recession in three times as long. Um, and at the end, you don't really care if you experienced a recession to get there. It still is miserable and it's more miserable, by the way, for younger people that are vulnerable to this turn down in hiring than for people that already have jobs are saying, aside from a few industries like tech or media are actually relatively insulated because

• 24:37Speaker 01

  layoffs have been low. Um, but I think that, that the point being that the fact that it's no longer getting worse and maybe slightly getting better is, it's happening. And I think like, again, even if you look at underemployment, even if you look at people that, um, that say they want a job, but don't have one, they're called the marginally attached, they're ready to work, they have, just haven't looked in the past year, um, or in the past month, they have looked sometime in the distant past at least, and then, so they have some evidence that they would work if they had the opportunity, they're just not bothering to look. That number stopped going up. And it was going up for a few years. And so again, this feeling that there's some sort of hidden, is, is, is the amount of pain in the job market worse than just unemployment rate indicates? Yes, but that total pain is going

• 25:21Speaker 01

  down. And with luck, that's going to continue because you said, I would love if people got bigger pay packets despite rising health insurance premiums. I would love it if even the people that are sort of been, it's true, by the way, of the small hardcore people that are unemployed, it's very hard for them to find jobs. They found it easier to find jobs. It is good that layoffs are so low, so that pool, that drip into the unemployment bucket is getting like thinner. And so eventually employers, if things stay this warm, warm further, are going to look to hire more of the long-term unemployed. Um, but I mean, there's more, like there's need a lot more progress on it. And I guess the other question that you're sort of hinting at is yes, we're in early days with AI, but am I going to be

• 26:04Speaker 01

  that, this sanguine about it in two, three, five, 10, 20 years? Maybe all that's going to be left for work is me and you chatting about job market data. I'm hopefully, I'm being facetious here. I don't think so, but, um,

• 26:18Speaker 00

  I don't think so either. Yeah, yeah. Well, Guy, great conversation. Uh, this has been a lot of fun. Like you said, I think we could talk about this for a long time, uh, but I know at the time, and I, I probably need to let you go and get on with your busy day. As we wrap things up, I wanted to give you a chance to share with the audience how they can connect with you, uh, where they can find the report and, uh, how they can connect with your team. And then give us the final word for today.

• 26:43Speaker 01

  Yeah. So home base, um, search for the Main Street Health Report, um, and, um, I actually remember the exact website. I'm sorry. I'm like so, I'm so AI dependent that I'm forgetting your URL these days, plus I'm getting old. Um, but home base website, look for the Main Street Health Report. It comes out every month right before the BLS jobs reports. The September data just came out. We track hiring, turnover, wages, employment. There's going to be more stuff we are doing. Um, and take a look. I think it's like really valuable, informative data and it's only getting more informative over time. And I guess my final word is, I really hope these like the limmers of things getting better for workers continue in, not just for the rest of the year, but into 2027, uh, because if you're a worker, you deserve a break.

• 27:27Speaker 00

  Awesome. I love it. Guy, thank you so much. It's been a pleasure. Encourage the audience to reach out, get connected, find out more about what Guy and his team at home base can do for you. And as always, I hope everyone can stay healthy and safe. Then you can find meaning and purpose at work each and every day. And I hope you all have a great week.

• 27:47Speaker 00

  Thanks for joining us for this episode of the podcast. We hope you stay healthy and safe and please join us again soon.