Americans’ wages have dropped by almost 3 percent under President Joe Biden’s high migration, big-spending policies, according to data presented by one of President Barack Obama’s top economists.
“Inflation ran 8.5% in the year ending last month, while nominal wages grew only 5.6%, a decline in inflation-adjusted wages of 2.7%,” Jason Furman at Harvard University wrote in a Wall Street Journal article.
“That [2.7 percent] is a larger decline than any pre-pandemic year in the last forty years,” he said in an April 12 tweet.
Americans’ disposable income fell because prices inflated faster than wages rose. Prices rose by a shocking 8.5 percent, while wages rose by an impressive 5.6 percent.
Republicans are spotlighting the economic damage. For example, a message from the Republican National Committee pointed out:
FACT: Real average hourly earnings are down 2.7% and real average weekly earnings are down 3.6%.
FACT: Bidenflation is costing Americans $433 per month just to maintain the same level of living.
But establishment experts rarely mention the impact of mass migration on Americans’ wages and housing. Furman, for example, keeps a narrow focus on dollar inflation — not the impact of Biden’s other economic policies.
Since January 2020, Biden has largely opened the nation’s borders to a wave of roughly 2 million migrant workers and families. That huge inflow of legal immigrants, illegal immigrants, quasi-legal asylum seekers, and visa workers inflates the U.S. economy for investors, CEOs, and tax collectors. That policy will re-inflate the two-decade-long cheap labor bubble that was burst in 2020 by President Donald Trump’s policies.
For example, the new migrants need homes, so they are helping to inflate rents and revenues for housing investors. “Nationwide rent prices have increased significantly year-over-year,” said a report by Rent.com, released March 15. “One- and two-bedroom rents were up 24.4 percent and 21.8 percent, respectively.”
The inflow of job-seeking migrants also reduces wage growth because employers no longer have to offer wages increases to find willing American workers, said Rob Law, the director of regulatory affairs and policy for the Center for Immigration Studies.
“If you have a tight labor market, then wages go up,” because employers must outbid each other to hire willing Americans, he said. But “employers have a government subsidy [from Biden] in the form of a basically unlimited combination of legal, pseudo-legal, and just blatantly illegal workers,” he said.
“Inflation and immigration are the one-two punch that cripples American workers’ take-home pay,” Law said.
Cheap labor migration also reduces high-tech investment by companies and farms. The result is that some U.S. companies use stoop labor instead of American-made machines:
Economists and reporters ignore the economic impact of the government’s long-standing economic policy of inflating the economy with imported workers, renters, and consumers, Law said:
It’s an across-the-board economic impact when you have a surplus of workers. There’s an increase in demand for housing in certain areas. There is a decrease in the ability to get certain preferred supplies or food stock when you are importing a whole new wave of people. Across the board, Americans are finding themselves worse off with their pay, their job opportunities, their housing, even healthcare in the form of longer lines.
The professional class likes to pretend that immigration is really only about humanitarian stuff and naturalizations. Immigration has a direct impact on every aspect of our American society, from the economy, from taxes, from public services. Which is why it’s so critically 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 run a hot economy. Bringing in [American] workers whom employers would normally be reluctant to hire—those with, say, a past felony conviction, a disability or lower educational attainment—is genuinely wonderful. But in economics all good things don’t always go together. Millions of new jobs don’t necessarily lead to higher pay for the 150 million workers who are 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 goes up more—the bargaining power of workers or the pricing power of businesses—is theoretically ambiguous,” he said. The lesson, he said, is that federal policy should not overheat the economy by piling on spending programs.
Back in 2016, when he was working for Obama, Furman admitted that government policy had a devastating impact on Americans because it pushed many millions of Americans — perhaps 20 million men — out of the labor market, into poverty, and onto charity and welfare.
“This [dropout] is caused by policies and institutions, not by technology,” admitted Jason Furman, an economist who chairs the president’s Council of Economic Advisors. “We shouldn’t accept it as inevitable,” he told a Brookings Institute expert, Dave Wessel, on August 10.
The activists who want more immigration seized on the bad inflation news to argue that the government should extract more migrants from poor countries.
Catherine Rampell, for example, is a pro-migration op-ed writer for the Washington Post, who tried to argue on April 11 that more immigration would make Biden less unpopular:
Democrats are terrified that a coming border surge might tank their midterm chances.
But they have largely ignored a much more serious immigration-related political risk. The problem in the months ahead isn’t that the United States will allow in too many immigrants; it’s that we’ll admit too few, particularly the kinds of workers who can fill critical labor-market shortages.
Rampell, Princeton ’07, is a persistent advocate for the colonization-style extraction of human resources from foreign countries for use in the U.S. economy. That is good for CEOs but especially good for clever investors, such as her Harvard-graduate brother, who works for Andreessen Horowitz, an investment firm in Silicon Valley.
Meanwhile, polls show that immigration is helping to wreck the Democrats’ standing in the polls. Breitbart News reported on April 11:
A CBS News/YouGov Poll shows that even when Americans are not told the current level of overall immigration to the U.S. — where more than a million green cards are awarded, more than a million temporary visas are allotted, and hundreds of thousands of illegal aliens are added to the population annually — they continue to back reductions and limits over expansions and uncontrolled migration.
The poll asks Americans, “What do you think U.S. immigration policy should generally be?” About 61 percent of Americans said “some immigration” should be allowed but “based on strict criteria,” suggesting an overall reduction with a more rigorous vetting and assimilation policy.
About 19 percent of Americans said they want to “stop most or all immigration” to the U.S., while 20 percent said “allow a lot of immigration, including most or all people who want to enter,” suggesting support for an open border policy.
RealClearPolitics.com reported on April 12 that a sample of recent polls shows that Biden’s immigration policy is backed by just 35 percent of Americans, and is opposed by 59 percent.
Also, multiple Democratic legislators are protesting as Biden is scheduled to open the southern border on May 23 to all economic migrants who claim they are seeking asylum.