Illegal Immigration and the Economy - Part 2

The post Illegal Immigration and the Economy proposed that illegal immigration was part of the reason for wage stagnation in this country. Wage stagnation has been a cause of income inequality as inflation continues to it's natural path. The result is a huge wealth disparity, wealth inequality, between the rich and the poor. The Democrat platform supports both open borders and efforts to alleviate income inequality. These efforts, if successful may have unforeseen consequences that could cause great harm to our economy.

Income stagnation isn't a few phenomenon, it started in 1973. Probably well before many of you were born.

Note: Data are for compensation (wages and benefits) of production/nonsupervisory workers in the private sector and net productivity of the total economy. "Net productivity" is the growth of output of goods and services less depreciation per hour worked.

Source: EPI analysis of Bureau of Labor Statistics and Bureau of Economic Analysis data

As you can see, since 1973 wages are only up by 9.2%. Over the 45 years this comes out to 0.204% per year while the average inflation rate between 1990 and 2012 was 2.7%. It's easy to see why most of us are lagging behind.

Illegal immigration started a little earlier, around 1960. The chart below is for illegal border crossing apprehensions since 1960.

You can see that at least the apprehensions started slowly but by the late 60's and early 70's really started to boom. Between the early 80's and mid 2000's apprehensions hovered around 1 million per year. Around 2008 there was a dramatic drop off in apprehensions as the Obama administration enforced it's catch and release program for individuals crossing the border illegally. Catch and release is for fishing, not those breaking our federal laws.

But the graph on apprehensions is to show the historical start of illegal immigration. The chart below show estimated immigration numbers between 1990 and 2014.

Obama supporters will point to the drop off in illegal immigration around 2008 as evidence his policies were working. Just remember in that time frame there were few jobs available here so there was little reason for people to come here for work.

Between the graphs on estimated illegal immigration and apprehensions it looks as though border security is catching around 10% of those breaking the law. How would you feel if your local police department were only catching 10% of those in your neighborhood that are mugging, raping, or murdering people. I hope you would be royally pissed off and you and your neighbors would demand something be done to improve the situation.

The truth is both political parties are using illegal immigration to hold down inflation, by not allowing market forces to increase wages, to be able to increase economic growth. The lack of inflation due to wage increases means interest rates can stay low longer encouraging further investment and growth in the economy. On the news you hear conversations about the establishment republicans or establishment democrats, these are the people that are so indebted to large corporations that they are sacrificing middle class wages by allowing illegal immigration to continue.

How do we fix it? First, control the border. The 10% apprehension rate has to improve, we're never going to get all of those breaking the law but 10% is unacceptable. To do that we have to vote for any republican on the ballot in just over a week. Whether you think they are good, bad, or indifferent, you need to hold your nose and vote for them since we know what Democrats want to do with the border.

Next, start flushing the establishment Republicans and Democrats out of Washington. Term limits would be an excellent way of doing this. My recommendation would be 2 terms for Senators (12 years) and 4 terms (8 years) for members of the House of Representatives. Add to that a restriction of members of one house of Congress using up all their terms then moving to the other house. Government was never intended to be a career. While this would be an excellent way to fix the problem quickly, Senators and Representatives probably aren't going to vote themselves out of a job.

The other way, is through the primaries. If there is a Senator running for their fourth term or a Representative running for his 10 term against a newcomer, vote for the newcomer. This will take longer, but it can still be done. We as voters can, without Congressional support, enforce term limits.

With all that being said, my thoughts on illegal immigration being a driving force for stagnant wages could be in error. All this could be one huge coincidence with not only the timing of the increase in illegal immigration and the start of wage stagnation working out but also backed up with how wage increases are forced on companies, but I don't think so. This type of coincidence doesn't happen naturally. If I hear a member of Congress talking about the impact of illegal immigration on income stagnation I would consider voting for them whether they are Republican or Democrat.

Additional sources:
Illegal Immigration Statistics
Wage Stagnation in Nine Charts
Long Term U.S. Inflation