Wages are Rising for Low-Income Workers

Both NPR and the New York Times reported that wages are rising for low-income workers. Wages for these earners are rising faster than those in high-earning jobs. Ernie Tedeschi, the author of the Times’ piece, noted that “recent growth for workers with low wages has outpaced that for high-wage workers by the widest margin in at least 20 years.”

Both outlets argue that these gains are the direct result of minimum-wage laws. NPR reporter Scott Horsley even titled his piece “Minimum Wage Hikes Fuel Higher Pay Growth for Those at the Bottom.” Only in the middle of the article does Horsley mention that “minimum wages aren’t the only factor. Low-wage workers also have more bargaining power, as employers scramble to fill job openings when unemployment is just 3.5%.”

What he describes is the effect of a tight labor market – where there are theoretically more available jobs than there are workers. In this environment, many employers find that they must go the extra mile to attract labor. Many employers raise wages, expand employee benefits, and hire applicants they otherwise would overlook. Tight labor markets overwhelmingly benefit job-seekers.

Regardless of where one falls on the wage ladder, this is fantastic news. Americans should welcome rising wages for low-skilled workers. Higher wages for low-income earners lead to reduced criminality, especially among young workers. Higher wages promote social stability and may prevent families from falling below the poverty line.

Smart immigration policy has a significant role to play in contributing to wage growth. Many immigrants and foreign guestworkers are low-skilled workers with little education. They compete directly for jobs with low-skilled Americans. Programs such as the H-2B allow employers to hire cheap, low-skilled foreign guestworkers instead of hiring an American who would benefit from such an opportunity. Reducing the number of guestworkers would raise wages for low-income Americans. These people include those with criminal records, recovering addicts, and single parents.

While there are many factors that contribute to the wage growth for American workers, reforming our immigration system it the one over which Congress can exercise the greatest control. Mandatory E-Verify would ensure that employers can only hire legal workers at a fair wage, instead of paying illegal aliens low wages under the table. Ensuring that our guestworker programs are not used as a substitute for American workers, especially H-2B, would raise wages and encourage employers to hire those most in need of jobs. Creating a skills-based immigration system would ensure that the flow of immigrants would match the needs of our economy. Even immigration enforcement leads to job creation and wage growth for Americans, as demonstrated by the Mississippi poultry plant raids.

Wages are rising for low-income workers. That is great news for the country. We should encourage the continuation of the tight labor market as long as possible. It will lead to desirable social outcomes across the entire country. Reducing immigration is an important factor in preserving these economic gains for American workers.

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