Global Banker: Joe Biden’s Migration Is Cutting Americans’ Wages

“Abundant labor coming across the border” is reducing the wages paid to American employees, said Kristalina Georgieva, managing director of the International Monetary Fund.

“Not everybody who crosses the border adds positively to the economy,” the Bulgarian-born Georgieva told the media at the IMF’s spring meeting, which was held with its sister organization, the World Bank, adding:

But that labor supply also gave to the United States [overall economy an] advantage: Wages are not pushing up, because there is no strong pressure because of lack of labor.

Not counting inflation, the annual growth in average hourly earnings has dropped to 4.1 percent in March 2024, down from 5.9 percent during the coronavirus turmoil on March 22, according to the Wall Street Journal.

But after counting inflation, wages in President Joe Biden’s migration-inflated economy have remained flat or dropped — especially for the many young Americans who are facing rising rents.

Migration also spurs inflation, chiefly by driving up housing prices amid Biden’s welcome for more than 7 million southern migrants and at least 2 million legal migrants. “Inflation is down but not gone,” Georgieva said at the meeting.

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But cheap labor is also very good for employers, investors, government tax collectors, and bankers because it grows the number of revenue-generating workers, consumers, and taxpayers — even though Americans’ wages remain flat or decline. That way the overall economy, Wall Street values, and the size of government, all grow from migration — even when Americans’ wages drop.

The mismatch “creates a domestic political problem,” Georgieva admitted. Indeed, many polls that show the majority of Americans reject Biden’s high-migration, low-wage “Bidenomics” economy.

Many business leaders, government agencies, and academics admit that wages are reduced by migration. They include independent academics, the National Academies of Science, the Congressional Budget Office, executives, more academics, New York Times reporters, state officials, unions, more business executives, lobbyists, employees, the Wall Street Journal, federal economists, Goldman Sachs, Goldman Sachs again, oil drillers, Wall Street analysts, fired professionals, legislators, construction workers, New York Times subscribers, Robert Rubin, and even by the Bank of Ireland.

Worse, the flood of cheap workers also drags down the productivity growth needed for growing middle-class wealth.

Migration allows companies to generate profits from low-productivity jobs, such as labor-intensive manufacturing, or restraint jobs.

The flood of cheap workers also reduces companies’ incentive to buy productivity-boosting machinery or to invest in risky ideas. Instead, they can profit by using their subsidized workers to operate old machinery that would otherwise be sold to companies in developing countries.

In contrast, China opposes immigration and is investing heavily in wage-boosting, high-tech factories.

Democrats help companies profit from migration by forcing local and federal taxpayers to pay the welfare and housing costs that keep the migrant workers from squalor. In April, Bloomberg reported on the economic difficulties facing Ukrainian parole migrants who cannot get city-paid housing:

“I couldn’t stretch my pay, not just for an apartment but even for a room,” said Marina Kostenko, a former teacher from Odesa who moved to New York in 2022.

The 52-year-old said she offered child-care services in exchange for housing, an arrangement that fell through on three different occasions, each time leaving her without a place to live.

The state of Massachusetts is using sales taxes to provide roughly $1 billion per year in housing subsidies for imported workers in 2024.

But the Democratic support for corporate migration also pushes many Americans out of major cities.

The flood of migrants inflates housing costs, pushing American families out of high-opportunity cities. WBH.org reported April 18:

A recent report by Boston Indicators found that Massachusetts lost a population about the size of Winchester. The staggering cost of housing in the Commonwealth is driving people out, and younger residents are feeling the squeeze.

“For younger buyers who want to get out of their rental apartment or maybe they’re starting a family, they need more space. …They’re going to look to communities where it’s more affordable,” said Boston Globe Business Columnist Shirley Leung on Boston Public Radio Thursday.

The concerning amount of people moving out across 2021 and 2022 — almost 23,000 — were between the ages 25 to 44. They were predominantly white, middle- and high-income earners and college-educated.

For decades, officials and lobbyists in New York City have used each new flood of migrants to suppress wages, spike rents, and push outspoken middle-class Americans out of the city.

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“An international migration Ponzi scheme is the only thing that averts a demographic doom loop for cities like New York and San Francisco,” as Americans flee the Democrats’ huge and badly-run cities, urban studies expert Michael Lind wrote in the September 26 article for Compact Magazine.