More Immigration Incompatible with Layoffs, Automation

The Economic Policy Institute recently released its U.S. wage study. Titled “State of Working America Wages 2018,” the report took a critical look at income inequality in the United States and what EPI calls “sluggish wage growth” that has for four decades depressed most working Americans’ incomes. Despite the falling unemployment rate, the majority of workers have been mired in either modest wage growth or, if they have seen more tangible paycheck gains, are merely making up for income lost since the Great Recession.

EPI analyzed data it mined from the Current Population Survey to reach its findings. An encouraging nugget in EPI’s report is that, over the last two years, the wages of high school graduates rose faster than college degree holders’ incomes, thus moderately reducing the wage gap between college-educated and high school only degree holders.

In other words, those who are among America’s most vulnerable, including the undereducated, are finally experiencing an income uptick, the inevitable result of the current tight labor market. The solutions that EPI recommends include raising the federal minimum wage, broadening overtime eligibility, and promoting workers’ rights to bargain collectively for higher wages and benefits.

Conspicuously missing from EPI’s proposed wage inequality remedies is the most obvious: slow immigration which annually adds to the labor market about 1 million new, work authorized lawful permanent residents, plus around 750,000 guest workers. They compete directly with employed, unemployed and underemployed Americans for jobs. Since new immigrants and guest workers are often willing to accept lower wages – employers love cheap labor – their presence in the economy contributes to continuing income inequality.

The White House appears eager to undermine the wage progress that low-skilled workers have made. Recently, White House officials, led by President Trump’s Senior Advisor and son-in-law Jared Kushner, hosted meetings with influential business champions and immigration advocates to expand employment-based immigration. President Trump’s calls for record-breaking high immigration, a disappointing departure from his campaign promises and his pro-American worker rhetoric during his presidency’s first two years, provided the meeting’s impetus.

Employers claim they need more immigration because of what they allege is a labor shortage. But the Bureau of Labor Statistics reported that several million working-age Americans are detached from the workforce, and would be available for hire if offered a living wage. President Trump’s call to “hire American” is becoming a distant memory.

As corporations demand more cheap labor, they are laying off thousands of workers. Amazon, whose CEO Jeff Bezos is the world’s richest man with a $112 billion net worth and definitely not income inequality-affected, last year announceda layoff impacting workers mostly in its Seattle headquarters. Walmart, one of America’s most profitable companies, with $9.86 billion in earnings in 2018, is eliminating its graveyard shift and adding more mechanization to its processes.

Nevertheless, the shift to robotics will continue at Walmart and elsewhere. At an October investor meeting, Walmart U.S. CEO Greg Foran said that Walmart’s 4,756 U.S. stores will see “lots more change.” Foran also said: “Roles will change, how we work will change.” Translated: more automation will lead to more firing, and more pain for those dismissed.

Automation has made high immigration obsolete, especially in the employment-based visa category, a reality that conveniently escapes the Trump administration as it caters to big business plutocrats. Two years ago, President Trump said that the “current, outdated system depresses wages for our poorest workers…” and added that “switching away from this current system of lower-skilled immigration…will raise workers’ wages….” Like President Trump’s promise to “hire American,” his pledge to create policies that “will raise workers’ wages” is another broken promise to America’s most vulnerable and underpaid.

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