US

Fall in wages of almost 3%

Americans’ wages have fallen nearly 3% under President Joe Biden’s high migration and deep spending policies, according to data presented by one of President Barack Obama’s top economists.

“Inflation reached 8.5% in the year ending last month, while nominal wages rose only 5.6%, an inflation-adjusted wage decline of 2, 7%,” Jason Furman of Harvard University wrote in a the wall street journal article.

“That [2.7 percent] is a bigger drop than any pre-pandemic year in the last forty years,” he said in a tweet from April 12.

Americans’ disposable income fell because prices rose faster than wages rose. Prices rose 8.5%, while wages rose 5.6%.

Republicans highlight the economic damage. For example, a message from the Republican National Committee pointed out:

FACT: Actual average hourly earnings are down 2.7% and the actual average weekly earnings are down 3.6%.

FACT: Bidenflation costs Americans $433 a month just to maintain the same standard of living.

But establishment pundits rarely mention the impact of mass migration on American wages and housing. Furman, for example, focuses narrowly on dollar inflation — not the impact of Biden’s other economic policies.

Since January 2020, Biden has opened the country’s borders wide to a wave of around 2 million migrant workers and families. This huge influx of legal immigrants, illegal immigrants, quasi-legal asylum seekers and visa seekers is pumping up the US economy for investors, CEOs and tax collectors. This policy will reinflate the cheap labor bubble that lasted two decades and was burst in 2020 by the policies of President Donald Trump.

For example, new migrants need housing, so they contribute to inflating rents and the income of real estate investors. “Nationwide rent prices have risen significantly year over year,” said a Rent.com report, released March 15. “One and two bedroom rents increased by 24.4% and 21.8%, respectively.”

The influx of job-seeking migrants is also reducing wage growth because employers no longer have to offer wage increases to find willing U.S. workers, said Rob Law, director of regulatory affairs and policies of the Center for Immigration Studies.

“If you have a tight labor market, wages go up” because employers have to bid higher to hire American volunteers, he said. But “employers have a government subsidy [from Biden] in the form of a virtually unlimited combination of legal, pseudo-legal and just plain illegal workers,” he said.

“Inflation and immigration are the two punches crippling the take-home pay of American workers,” Law said.

The migration of cheap labor also reduces investments in high-tech businesses and farms. The result is that some American companies use manpower instead of American-made machinery:

Economists and journalists ignore the economic impact of the government’s longstanding economic policy of pumping up the economy with imported workers, tenants and consumers, Law said:

It is a general economic impact when there is a surplus of workers. There is an increase in demand for housing in some areas. There is a decrease in the ability to obtain certain favorite food supplies or stocks when importing a whole new wave of people. Overall, Americans are getting worse off with their pay, job opportunities, housing, even health care in the form of longer lines.

The professional class likes to pretend that immigration is really just about humanitarianism and naturalizations. Immigration has a direct impact on all aspects of our American society, from the economy, to taxes, to public services. That’s why it’s so important that you consider what the levels are… too much of it – legal or illegal – is collectively a net loss to communities.

Furman recognized the value of a tight labor market where employers must compete for workers, saying:

There are good reasons to lead a hot economy. Bring [American] workers that employers would normally be reluctant to hire – those with, for example, a past felony conviction, a disability or a low level of education – is truly wonderful. But in economics, all good things don’t always go together. Millions of new jobs do not necessarily mean higher wages for the 150 million workers already employed.

Hot economies allow inflation because employers can easily and quickly raise prices faster than wages, he argued. “With so many eager customers, businesses can charge higher prices. Which increases more – the bargaining power of workers or the pricing power of companies – is theoretically ambiguous,” he said. The lesson, he said, is that federal policy shouldn’t overheat the economy by piling on spending programs.

In 2016, while working for Obama, Furman admitted that government policy had a devastating impact on Americans as it pushed several million Americans – possibly 20 million men – out of the workforce, in poverty and towards charity and social assistance.

“This [dropout] is caused by policies and institutions, not technology,” admitted Jason Furman, an economist who chairs the President’s Council of Economic Advisers. “We shouldn’t accept it as inevitable,” he told Brookings Institute expert Dave Wessel on August 10.

Activists who want more immigration have seized on the bad news about inflation to argue that the government should extract more migrants from poor countries.

Catherine Rampell, for example, is a pro-migration columnist for the Washington Postwho tried to argue on April 11 that more immigration would make Biden less unpopular:

Democrats are terrified that a coming border wave could hurt their medium-term chances.

But they have largely ignored a much more serious immigration-related political risk. The problem in the coming months is not that the United States will allow too many immigrants; is that we will also admit it littleespecially the types of workers who can fill critical labor market shortages.

Rampell, Princeton ’07, is a strong advocate of colonial-style extraction of human resources from foreign countries for use in the American economy. That’s good for CEOs, but especially for smart investors, like his Harvard-educated brother, who works for Andreessen Horowitz, a Silicon Valley investment firm.

Meanwhile, polls show that immigration is helping to destroy Democrats’ position in the polls. Breitbart News reported on April 11:

A CBS News/YouGov poll shows that even when Americans are unaware of the current level of overall immigration to the United States – where over a million green cards are issued, over a million temporary visas are issued and hundreds of thousands of illegal aliens are added to the population every year – they continue to support cutbacks and limits on uncontrolled expansions and migrations.

The poll asks Americans, “What do you think U.S. immigration policy should generally be?” About 61% of Americans said “some immigration” should be allowed but “on the basis of strict criteria”, suggesting an overall reduction with a stricter control and assimilation policy.

About 19% of Americans said they wanted to “stop most or all immigration” to the United States, while 20% said they would “allow much immigration, including most or total number of people wishing to enter”, suggesting support for a policy of open borders.

RealClearPolitics.com reported on April 12 that a sample of recent polls shows that Biden’s immigration policy is supported by only 35% of Americans and opposed by 59%.

Additionally, several Democratic lawmakers are protesting as Biden is set to open the southern border on May 23 to all economic migrants who claim to seek asylum.

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