Column | Wages are definitely declining under Trump
Although the White House has touted what it claims to be a jobs rebound, the truth is that most newly created positions are in low-paying sectors, part-time and without benefits. Not surprisingly, wages continue to stagnate or, as a recent report indicates, decline.,
On January 12, the Department of Labor issued its December analysis of inflation-adjusted wages which show that the American economy is in a wage recession. Americans’ hourly paychecks were 0.09 percent lower in December than in May. Since economists define a wage recession as two consecutive quarters of cumulative decline in constant dollar growth, former U.S. Business and Industry Council Educational Foundation research fellow and “The Race to the Bottom” author Alan Tonelson concluded that real wages are “in a decided downturn.”
In the manufacturing sector, which should pay more than, for example, the hospitality industry, inflation-adjusted wages performed worse than the overall economic average. The latest DOL statistics showed that in manufacturing, price-adjusted hourly pay since March 2016 has declined 0.19 percent.,
Taken as a whole, the December DOL data show that since the current economic recovery began more than eight years ago, real private sector wages have risen by a meager 4.17 percent, but are still far better than manufacturing’s 0.56 percent increase.,
If an improved economy’s most important barometer is whether Americans prosper, then little progress has been made. Congress, however, dismisses wage stagnation, and its deleterious effect on working Americans - those lucky enough to have a job, that is. Instead, Congress is focused entirely on two amnesties - a smaller 700,000 one for deferred action for childhood arrivals, and a larger two million plus Dream Act version that would expand the labor pool with more lifetime, legally authorized workers which would lead to further wage stagnation.
Interestingly, Tonelson has a lot to say about high immigration’s harmful consequences on working Americans. In his 2014 Fortune column, Tonelson wrote that having more workers bodes poorly for Americans who compete with immigrant labor, especially in a slowly growing economy. Tonelson determined that more immigration “is a windfall mainly for the rich,” a financial bonanza for top executives and others who own significant capital. The rise in labor supply depresses workers’ wages, but maximizes corporate profits and share prices.
Illegal immigrant labor is widely available and is especially detrimental to America’s less educated and lower-skilled. Elites profit from the low-paying jobs at which illegal immigrants toil. Among those low-skilled jobs are employment in construction, restaurants, domestic services, grounds keeping and building maintenance. The end result of the labor illegal immigrants provide is financial and life-style benefits to America’s wealthy, but little for others.
Business reliance on foreign-born workers in those low-paying sectors will increase if, through amnesty, the illegal immigrant population receives lawful permanent status, and creates incentives for more low-skilled workers to migrate north from Mexico and Central America.
Amnesty-fixated Congress should turn its attention to long-overlooked American workers whose earnings would improve if the United States admitted fewer foreign-born workers. Supply and demand dictates that tight labor markets mean higher wages.