Shock: Americans’ Wages Dropping Fast in 2016
Federal data released Aug. 9 shows that Americans’ wages are dropping again, seven years after President Barack Obama declared the economy had recovered from the property-bubble — and three months before the 2016 election.
The dramatic drop was buried in an Aug. 9 report by the Bureau of Labor Statistics, which said that officials have radically revised their prior claim that wages grew 4.2 percent in the first quarter, from January to March.
“Real hourly compensation decreased 0.4 percent after revision, rather than the previously-published increase of 4.2 percent,” the BLS admitted. Compensation also fell another 1.4 percent in the second quarter, from April to June, the BLS admitted in the same report. That’s 2 percent drop in wages since December.
Pay shrank 0.3 percent in 2013, rose a mere 1.1 percent in 2014, but rose a promising 2.7 percent in 2015, according to the BLS.
The wage drop is a potential p.r. problem for Obama, who has been touting the apparent rise in wages since officials reported that wages grew 2.7 percent during 2015.
In June, Obama cited the mistaken 2016 wage-growth claim while arguing the economy was finally helping ordinary Americans. “Let’s get wages rising faster,” Obama declared in a speech at Concord Community High School, Elkhart, Indiana.
I also know that I’ve spent every single day of my presidency focused on what I can do to grow the middle class and increase jobs, and boost wages … Here’s the good news: Wages are actually growing at a rate of about 3 percent so far this year. That’s the good news. Working Americans are finally getting a little bigger piece of the pie. But we’ve got to accelerate that.
That speech was advertised as his first speech of the 2016 campaign, and he continued his wage-boosting theme during his July 27 speech at the Democratic Convention;
If you’re really concerned about pocketbook issues and seeing the economy grow, and creating more opportunity for everybody, then the choice isn’t even close. If you want someone with a lifelong track record of fighting for higher wages, and better benefits, and a fairer tax code, and a bigger voice for workers … you should vote for Hillary Clinton.
But Obama’s own political priorities have helped force wages down in the job market, even as he works to deliver more benefits via government offices to lower-paid Americans.
One huge cause of declining wages is the federal government’s decision to import roughly 2 million migrants and guest-workers each year. They compete for work against the four million young native-born Americans who begin looking for work each year. That one-for-two flood of extra labor creates a huge surplus of U.S. workers, which drives down wages.
That wage-cutting labor surplus is hidden by federal unemployment numbers which suggests that only 1 out of 20 Americans are unemployed. But the reality is that the many Americans and immigrants who do not have a full-time job are slyly discounted in the official reports.
“In addition to the [6.9 million recognized] unemployed, 28 percent (48.5 million) of working-age (16 to 65) natives were not in the labor force … This is much higher than the 25.3 percent rate (42.1 million) in the same quarter of 2007 and the 22.9 percent rate (35.7 million) in 2000,” said a July study from Steve Camarota, the research director at the Center for Immigration Studies, “
Overall, “55.4 million working-age, native-born Americans [were] without jobs in the first quarter of 2016, compared to 41.1 million in the same quarter of 2000,” he wrote.
In contrast, when immigration is kept low, wages tend to rise during economic growth. For example, wages rose sharply in the low-immigration decades between 1925 and 1969. Blue-collar wages also climbed in 1998 and 1999 when the fast-growing economy ran out of workers. Also, in Arizona, wages and research into labor-saving technology rose once many illegals were sent home in the mid-2000s.
Currently, U.S. agriculture companies are complaining about rising wages because many of their illegal-immigrant workers are migrating away from the farms and towards the cities. “We’re probably experiencing the most critical labor shortage” since 2002, complained Tom Nassif, president and CEO of the Western Growers Association, a trade association of agricultural companies who want illegal-immigrant farm workers to get work permits, perhaps via an amnesty deal. “Wages are going up dramatically… [the labor shortage] encourage[s] people who are farmworkers to play musical chairs by going from farmer to farmer, seeking higher wages, and the farmers are competing with each other by raising those wages,” he complained.
Growing wages are a huge headache for CEOs, partly because higher wages shrink profits and slash stock values on Wall Street.
Obama tried and failed to get a wage-cutting amnesty deal in 2013 because he’s willing to let Americans’ workplace wages stall if he can increase the Democratic Party’s power to deliver benefits via government.
Obama made that political strategy clear in 2006, when he admitted in his autobiography that large-scale migration hurts Americans wages. “This huge influx of mostly low-skill workers provides some benefits to the economy as a whole… [but] it also threatens to depress further the wages of blue-collar Americans,” including blue-collar African-Americans, Obama wrote.
But those brown immigrants would help the Democratic Party, he wrote. “In my mind, at least, the fates of black and brown were to be perpetually intertwined, the cornerstone of a [Democratic] coalition that could help America live up to its [progressive] promise,” he wrote in “The Audacity of Hope.”
Obama’s welcome for migrants is also rooted in his progressive views that Americans’ legal rights must be shared with all foreigners, regardless of their political beliefs, cultures or impact on the Americans’ wages.
In a November 2014 speech on immigration, for example, Obama told a Chicago audience that “there have been periods where the folks who were already here suddenly say, ‘Well, I don’t want those folks,’ even though the only people who have the right to say that are some Native Americans.”
“Sometimes we get attached to our particular tribe, our particular race, our particular religion, and then we start treating other folks differently… that, sometimes, has been a bottleneck to how we think about immigration,” Obama said, shortly after he announced his Oval Office plan to award work-permits to roughly 4 million additional illegal immigrants.
Obama’s combination of progressive ideology and strategy is why he has allowed 400,000 unskilled Central American migrants into the country since 2010.
He’s also provided a quasi-amnesty to almost 800,000 illegal immigrants since 2012, tried to provide a quasi-amnesty to four million illegals in November 2014, is bringing in 65,000 unskilled Syrian migrants by October, and pushed for the 2013 immigration bill that would have added at least 33 million legal migrants to this nation of 310 million Americans by 2023. Obama has also expanded the annual inflow of temporary “guest workers” from 700,000 per year to roughly 800,000 per year.
In contrast, Donald Trump’s proposed immigration reform would reduce unemployment, drive up Americans’ wages and reducing housing costs, according to a recent Wall Street study that claimed to be critical of his policies.
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