Lockdowns Were Good For One Thing: Proving Mass Migration Destroys Wage Growth

Macrobusiness: Wages surge across developed world on lower immigration

Wages are booming across the developed world, according to The Economist. Lower skilled workers, in particular, are benefitting from the collapse in immigration: Wages are surging across the rich world

When covid-19 first struck, most forecasters expected bosses to slash bonuses and yearly rises, or even to cut basic pay, as they did after the global financial crisis in 2007-09. Although wage growth did slow modestly early in the pandemic, that restraint has since been abandoned. Oxford Economics, a consultancy, finds that pay in the rich world is growing at a rate well north of its pre-pandemic average. The acceleration in compensation per employee across the OECD, a club of mostly rich countries, is equally arresting (see chart 1).

Why are wages rising with lockdowns? What happened? Immigration slowed. Lower wage workers are benefiting most:

Some workers are benefiting more than others. Analysis by The Economist of British wage data by industry suggests that annual pay growth is twice as dispersed as it was before the pandemic. Wages in the accommodation and food-service sector, which is struggling to attract workers, rose by 8% in the year to July; increases in manufacturing have been more modest. In America the wages of the least-paid quartile of workers are growing 70% faster than those at the top (see chart 2).

Exactly as immigration restrictionists have been saying for decades.

Underlying pay is rising about three times as quickly in Anglo-Saxon countries as in continental Europe. That could be because places such as America and Canada rely more on the consumer-facing industries experiencing the worst labour shortages. And France and Italy, where annual pay growth is below 1%, probably do not face the same immigration crunch as Britain, which has Brexited, or Australia and New Zealand, which have closed their borders to keep out covid-19.

Anglo countries have the highest rates of mass migration. They have the most open borders and they reversed policy during the lockdowns. The American ruling class is already trying to reverse the effects. It has been furiouisly working to flood America's labor force with mass migrants via open borders and huge increases in work visa limits. We'll see if the UK, Australia, Canada and New Zealand follow in their footsteps.

The stupidest people in American politics, the truly useful idiots, are the fools who promote the $15 minimum wage while voting for open borders. The only policies America needs to massively boost wages is a ban on immigration, a near total ban on work visas (they are heavily abused and should not be allowed until dependable fraud detection measures are created) and mass deportation of all migrants, illegal aliens and legal aliens on welfare currently in the country. That would unleash the largest wealth transfer in U.S. history from the plutocrats to the working class. It would crush unemployment and trigger a surge in the civilian labor force as people chase soaring wages.

It would also, contra what the lying criminals in the ruling class say, rapidly accelerate technological progress and capital investment because companies would have a burning need to increase productivity. This would sustain wage growth going forward and fuel a decades-long boom that would lift the average American's standard of living. Will it happen? Who knows. People keep trying to sell the idea of a 1920s boom. Depression aside, Americans benefited greatly when immigration was heavily restricted between the 1920s and 1965. Some politicians should grow some courage and try putting the American people first for once.