BREAKING—The International Monetary Fund (IMF) says that a surge in immigration to the United States has kept wages more competitive—that is, lower.
Highlights
- Immigration has suppressed wage growth as Americans compete with imported labor
- Media and economic think-tanks praised immigration for helping control inflation by cooling wage growth
- Government spending has an outsized role in inflation compared with wage growth, canceling out any benefits of lower wages for taxpayers, who must compete with immigrant labor for lower wages
A surge in immigration has made the U.S. economy more competitive by preventing wages from rising more than they otherwise would have, the head of the International Monetary Fund has said
— unusual_whales (@unusual_whales) May 9, 2024
Wages and Inflation’s murky relationship
Kristalina Georgieva said Thursday immigration is keeping the U.S. labor market more competitive, in other words, making the supply of labor more abundant. Georgieva said immigration is warding off inflationary pressures, even as President Biden’s claims that inflation was 9% when he took office drew the scrutiny of fact-checkers. Inflation stood at 1.6% in 2020.
The upshot of immigration for workers, of course, is lower wages and a more competitive labor market, as inflation nevertheless continues to eat at paychecks and workers must compete with immigrant labor.
Immigration Housing Double Whammy
On top of the suppression of wages, add to that the double-whammy of housing affordability, with the payment on a thirty-year mortgage nearly doubling compared with three years ago, and America faces a generational crisis for family formation, home ownership, and quality-of-life.
Axios reported last year that the surge in immigration was further crunching housing supply with demand for the most affordable housing and apartment units, with homelessness surging.
Meanwhile, housing affordability is out of reach: there are just six cities where median-income earners can afford to buy a median-priced home.
There are just six cities where the median-priced home is affordable for median-income earners, per FOX:
— unusual_whales (@unusual_whales) May 9, 2024
Pittsburgh
Cleveland
St. Louis
Memphis, Tennessee
Indianapolis
Birmingham, Alabama
