Reuters: Immigration Enforcement Fattens Wages of American Workers

Oil companies in New Mexico are raising more Americans’ wages because President Donald Trump has tightened immigration enforcement, says a complaint from Reuters news service.

Companies are meeting the labor demands “by paying overtime and shipping [distant American] workers in and out,” says the Reuters article written by Andrew Hay under the headline “‘Broken system’ starves U.S. oil boom of immigrant workers.”

Reuters hides the good news for blue-collar Americans, and it prefers to comfort the afflicted business owners who want to hire cheaper foreign workers:

“The [oil drilling companies] are demanding more rigs, more swabbing units, but you don’t have enough employees,” said Vega, who runs Mico Services with around $17 million in annual revenues. “It’s a lack of a system to get legal workers, to have more of a workforce to pull from.”

Business groups say that 15,000 extra workers would solve their labor problems, while they complain that additional audits by the Department of Homeland Security are forcing them to compete for Americans’ labor:

“I know people, my peers, that have been hit by immigration audits, and they were told, specifically, that the Permian Basin was targeted because of the vast amount of workers that were coming here,” said Finn Smith, president of Hobbs-based Watson Hopper Inc.

…

“It’s now getting very difficult here for anyone who isn’t documented,” said Juan, an unemployed pipeline worker who immigrated to the United States illegally 11 years ago. He asked that his last name not be used to protect his identity.

The Reuters reporter did not mention the overwhelming evidence that the arrival of more foreign workers reduces the wages of Americans’ blue-collar and white-collar workers. The process, which is described as the “Law of Supply and Demand” to first-year economics students, reduces wages if employers can hire cheaper workers from poor countries.

In contrast, wages for Americans tend to rise when there is a “Tight Labor Market.” In a tight labor market, employers must compete for American workers by offering higher wages, better working conditions, and benefits such as training and flexible hours.

In recent years, Democrats, establishment Republicans, and many media outlets have preferred to urge more foreign workers — including H-2B and H-1B visa workers — than to urge wage raises for Americans.

Reuters admits that employers already hire illegal foreign workers and suggests that they minimize their legal risk by renting equipment to other companies, which may hire illegals:

“What we do is we don’t ask,” said Lorena, a Mexican immigrant whose family has built up a small oil field services business. She estimated that more than 90% of her employees were Mexican immigrants and that only 5% to 10% had genuine working papers. Her last name was not used to protect her identity.

[Johnny] Vega’s labor woes are pushing him to reorient his oil well service business toward hiring out his equipment.

Read the Reuters article here.

Immigration Numbers:

Each year, roughly four million young Americans join the workforce after graduating from high school or a university. This total includes about 800,000 Americans who graduate with skilled degrees in business or health care, engineering or science, software, or statistics.

But the federal government then imports about 1.1 million legal immigrants and refreshes a resident population of about 1.5 million white-collar visa workers — including approximately one million H-1B workers and spouses — and about 500,000 blue-collar visa workers. The government also prints more than one million work permits for new foreigners and rarely punishes companies for employing illegal migrants.

This policy of inflating the labor supply boosts economic growth and stock values for investors. The stimulus happens because the extra labor ensures that employers do not have to compete for American workers by offering higher wages and better working conditions.

The federal policy of flooding the market with cheap, foreign white-collar graduates and blue-collar labor shifts wealth from young employees toward older investors. It also widens wealth gaps, reduces high-tech investment, increases state and local tax burdens, reduces marriage rates, and hurts children’s schools and college educations.

The cheap-labor economic strategy also pushes Americans away from high-tech careers, and it sidelines millions of marginalized Americans, including many who are now struggling with drug addictions.

The labor policy also moves business investment and wealth from the Heartland to the coastal cities, explodes rents and housing costs, undermines suburbia, shrivels real estate values in the Midwest, and rewards investors for creating low-tech, labor-intensive workplaces.

But President Donald Trump’s “Hire American” policy is boosting wages by capping immigration within a growing economy.

The Census Bureau said September 10 that men who work full-time and year-round got an average earnings boost of 3.4 percent in 2018, pushing their median salaries up to $55,291. Women gained 3.3 percent in wages, bringing their median salaries to $45,097 for full time, year-round work.