Americans’ after-inflation wages have dropped by almost 3 percent since President Barack Obama’s inauguration, according to a new analysis by a left-wing advocacy group.
The biggest drop was felt by lower-income workers, while upper-income professionals were hit by a 2 percent drop. The study was released by the National Employment Law Project, which is headed by left-wing employment lawyers, union officials and a former economist in Obama’s White House, Jared Bernstein.
The biggest hits — minus 4.1 percent — were taken by people who earn between $10.61 and $14.21, an hour, said the analysis of federal data.
Several job categories suffered even greater losses. “Real median wages fell by 5.0 percent or more in five of the top ten lower-wage occupations: restaurant cooks, food preparation workers, home health aides, personal care aides, and maids and housekeepers,” said a statement from the NELP group.
Wages fell amid a cumulative productivity increase of 4.5 percent, according to NELP. “Workers are producing more goods and services per hour but earning less than they were when the recovery began,” the group declared. Productivity is growing because companies are using high-tech gear — especially computers — to augment or replace labor.
The unwelcome analysis isn’t likely to get much promotion by progressive groups, partly because it happened on Obama’s watch, but also because it arrives in the middle of a push to double the inflow of low-skill immigrants, many of whom choose to work in the hardest-hit job categories.
In fact, many progressives and business-advocates suggest that high levels of low-skill immigration will boost wages for low-skilled Americans.
“If we don’t do anything to fix our broken system … We won’t benefit from highly-skilled immigrants starting businesses and creating jobs [and] American workers will have to make due with lower wages and fewer protections,” President Barack Obama said during his July 13 weekly address.
A controversial bill passed in late June by the Senate would double the immigration rate, and would add 46 million immigrants by 2033. House GOP leaders are debating their response, amid widespread opposition from the GOP’s base.
An increasing number of conservatives and academics argue that large-scale immigration has been harmful to Americans outside the top ranks of society and the economy.
Alabama Sen. Jeff Sessions, for example, says the defeat of a proposed immigration rewrite would help boost wages and make the GOP more popular among low-income and mid-income Americans, including Latinos and African-Americans.
“The Republican Platform should include a line that says we will promote an immigration policy that serves and honors the American worker and the American taxpayers,” he said in a June 13 speech in Alabama. “No political party can have as its goal lower wages for its country,” he said.
Since 2000, the nation’s working-age immigrant population has grown by 8.8 million, and the number of working immigrants has grown 5.3 million, according to a July 3 report by the Center for Immigration Studies.
The number of working-age natives has grown by 16.4 million, but the number with jobs has dropped by 1.3 million.
Overall, at least 20 million Americans are unemployed or underemployed, including many who are stuck in part-time jobs.
California has received a larger share of immigrants than nearly all other states, and it has the seventh-highest unemployment rate among states, despite its world-leading computer, movie and farming sectors.
In April, Harvard economist George Borjas estimated that the current legal and illegal immigration levels of roughly 1 million people per year add about 10 percent, or $1.6 trillion, to the size of the economy.
Immigrants receive the vast majority of that increase via their U.S. wages, but they also drag down the income of lower-income Americans who don’t employ immigrants, by roughly $402 billion per year, Borjas said. In turn, higher-income Americans, including investors and company owners, get the roughly $437 billion per year of benefit from the cheaper labor of immigrants and Americans.
The analysis was backed June 16 by the Congressional Budget Office, which predicted the Senate bill’s inflow of immigrants would expand the economy, lower average wages and education for a decade, and shift a larger share of national income towards investors.
“The rate of return on capital would be higher [than on labor] under the legislation than under current law throughout the next two decades,” says the report, titled “The Economic Impact of S. 744.”
However, the NELP report ignored the possible role of low-skilled immigration in the loss of wages from 2009 to 2012, and instead pointed at other possible factors.
“Corporations are reaping the financial benefits of an increasingly productive workforce, but the recent decline in wages shows that these gains are not being shared with the people actually doing the work,” said a statement from Christine Owens, NELP’s executive director.
“The U.S. leads developed nations in income inequality, with the growth in inequality and economic disparities fueled by the declining real value of the minimum wage, the erosion [of] union representation in public and private workplaces, and U.S. tax and trade policies that reward companies for shipping profits and jobs abroad, among other factors,” said the NELP statement.