The New York Times had a recent article on the decline in real wages even as productivity and corporate profits have risen during the same time period. It’s hard to see how one can blame a rise in corporate profits on illegal alien immigration. It’s even harder to see how anyone can talk about illegal aliens magically causing a decline in wages while ignoring employment practices and official Bush Administration policy.

Bush as rarely made a speech about economics in which he talks about the wages of citizens and legal residents. Instead, he consistently blathers about an ownership society in which presumably everyone is either a small business owner or a corporation, or maybe a farmer, and no one is an employee, except of course for all those immigrant “guest workers” doing those magical jobs that Americans won’t do.

Here’s one of the key points from the news report:

‘As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”’

http://www.nytimes.com/2006/08/28/business/28wages.html?ex=1156996800&en=2938448a0c8f88bf&ei=5087%0A

or

http://www.nytimes.com/2006/08/28/business/28wages.html?_r=1&oref=slogin

Illegal immigrant employment which drives wages down is just part of a larger trend in employment trends. In a story which has expired from the New York Times free site, but which may still be available somewhere on the web, reporters noted how smaller towns were becoming pockets of poverty (“Rural Oregon Town Feels Pinch of Poverty, August 20):

‘…A high school degree was not necessary to earn a living through logging or mill work, with wages roughly equal to $20 or $30 an hour in today’s terms.

But by 1990 the last mill had closed, a result of shifting markets and a dwindling supply of logs because of depletion and tighter environmental rules. Oakridge was wrenched through the rural version of deindustrialization, sending its population of 4,000 reeling in ways that are still playing out.

… The town is an acute example of a national trend, the widening gap in pay between workers in urban areas and those in rural locales, where much of any job growth has been in low-end retailing and services.’

So far, neither Republicans nor Democrats have any clue as to how to stimulate the economy. But clearly, although illegal immigration is a serious issue, simplistic scapegoating is pointless. You need something stronger than liberals whining about Wal-Mart and some conservatives wailing about illegal immigrants.

Posted by: Alec on August 29, 2006 4:15 AM

Alec: 1) Total compensation (which includes benefits such as health insurance) has stayed in roughly the same range over the last 40 years. Simply put, health care costs are eating up a larger and larger part of worker's paychecks.

2) The trends in wages are difficult to link to political processes, let alone Bush administration policies. Even a dyed-in-the-wool liberal like Brad DeLong has questioned the link between income stagnation and political measures.

3) The wage impact of illegal immigration has been put at around 5-10% (applies to workers without a high school degree over the last 25 years) by economists who are pessimistic about the economic effects of illegal immigration. That is, that is the UPPER bound of those estimates.

Posted by: jult52 on August 31, 2006 10:33 AM






Post a comment

Name:


Email Address:


URL:


Comments:


Remember your info?