Impact of abundant labor migration on American employees' wages and the economy
Managing director of the International Monetary Fund, Kristalina Georgieva, discusses how abundant labor coming across the border affects American employees' wages. She notes that while it benefits the overall economy, wages are not increasing due to the influx of labor, leading to flat or declining wages, especially for young Americans facing rising rents. The article also highlights the impact of migration on inflation, productivity growth, and the overall economy.
Key Points
- Abundant labor migration affects American employees' wages and the overall economy.
- Inflation and decreased productivity growth are some of the consequences of migration.
- Migration can lead to a disparity between economic growth and the well-being of American workers.
Pros
- Abundant labor migration benefits the overall economy by growing the number of revenue-generating workers, consumers, and taxpayers.
- Cheap labor is advantageous for employers, investors, government tax collectors, and bankers as it supports economic growth.
Cons
- Abundant labor migration leads to flat or declining wages for American employees, particularly impacting young Americans facing rising rents.
- Migration contributes to inflation, reduces productivity growth, and can push Americans out of major cities due to inflated housing costs.