Lower wages are a feature of immigration expansion, not a bug

Stop me if you’ve heard that immigration has no effect (or minimal effect) on wages. Yes, the last half century of mass immigration coincides with the stagnation of real wages for most workers, but you’ve no doubt read or heard that the two aren’t related. Increasing the supply of labor, we’re told, just doesn’t lower the cost, basic economics notwithstanding.

Every now and then, however, wages threaten to rise. The cry of “labor shortages” (omnipresent whether the economy is in a boom or bust cycle) grows louder. This is a serious problem, we’re told, despite the aforementioned wage stagnation. And the solution is more immigration, precisely because it does impact wages.

As The Wall Street Journal recently reported:

The ability of workers to secure outsize pay increases could depend on how quickly countries that have kept Covid-19 cases low can reopen their borders and encourage immigration. An influx of foreign labor would put downward pressure on wage growth.”

You don’t say.

JEREMY BECK is the Director of the Sustainability Initiative for NumbersUSA