Free Traders or Traders

 

The following is a recent report about the decline in wages in America.

Report: Manufacturing Decline And Low Skill Immigration Have Depressed Wages by CAROLINE MAY30 Jun 2015

“A recently published study from an economics professor concludes that the declining manufacturing base and increases in low skilled immigration have served to increase income inequality in the U.S.

“The overall evidence suggests that the manufacturing and immigration trends have hollowed-out the overall demand for middle-skilled workers in all sectors, while increasing the supply of workers in lower skilled jobs. Both phenomena are producing downward pressure on the relative wages of workers at the low-end of the income distribution,” reads the abstract to Hebrew University Professor Eric Gould’s paper.

He examined data over the forty years. In “Explaining the Unexplained: Residual Wage Inequality, Manufacturing Decline, and Low-Skilled Immigration” Gould reveals that changes in wages, employment, and income inequality have been impacted by the shifts in manufacturing, immigration and trade:

The last four decades have witnessed a dramatic change in the wage and employment structure in the United States and many other developed countries. The wage gap between earners at the top versus the bottom of the distribution have widened, and research has been unable to explain this transformation with changes in the quantities or the returns to observable factors like education, experience, occupation, and industry. At the same time, the manufacturing sector has steadily declined, while less-skilled immigrants have increasingly become a larger proportion of the population in the United States.

Specifically, Gould concludes that an area already being hit by a decline in manufacturing will see more inequality if there is more low-skilled immigration:

The results show that an influx of less-educated immigrants increases inequality, especially in areas that are undergoing manufacturing decline. A similar interaction is shown to affect the employment rate of non-college graduate native men – an increase in immigration coupled with a decline in manufacturing lowers the employment rate of less-educated men. The similarity of the results for inequality and the employment rate of non- college men reinforce the interpretation that these two phenomena are putting downward pressure on the wages of less skilled men – thus increasing inequality primarily at the bottom half of the wage distribution and encouraging more and more men to drop out of the labor market altogether.

In total, Gould concludes that some of the previously unexplained inequality increase since the 1970s has been due to the intersection of declining manufacturing and increased low-skilled immigration.

This paper establishes an important link between inequality within all sectors and the general equilibrium impact of manufacturing decline and an influx of less- skilled immigration. These two phenomena, which do not appear to be related to one another … generated a decline in the overall demand for middle skilled work and an increase in the supply of workers looking to work in less-skilled jobs. As a result, variation in the extent to which a city or state experienced either one of these phenomena explains a large proportion of why the ‘unexplained’ level of inequality increased over time”

The following is my commentary on the report. This reports links American immigration policies and its free trade policy to  a decline of wages. You do not need to be a brain surgeon to figure this out. There are only two reasons why American politicians refuse to see this. One, they are in the pocket of big corporations that are  benefiting from our unfair trade policies. Secondly, they are simply obtuse and brainwashed by a fictional theory of economics fostered by big business. In either case I do not want to see these people as leaders in our government. They are either dishonest or just stupid.

Now let’s follow the dots. Who is pushing open borders and more immigration. Who is promoting more free trade? What two presidents signed the free trade bills. Who benefited from free trade? Unions or big business, the working class or big corporations. Wake up America, The leadership in both parties are selling us out.

If you do not  know which president signed the free trade agreement it was President Bill Clinton and president Obama. Which parties supported the treaties? Both the Democrats and Republicans. Who running for president has promised to correct unfair trade policies. Bernie Sanders and Donald Trump. The rests are free traders. Out the Those running for president who has promised to slow down immigration and the flow of cheap labor into the country? Bernie Sanders no, Donald Trump yes. Other Republicans and Democrats have said that they would like to slow down immigration but their reason is questionable. It seems that it not to protect the American worker. If these two problems are not taken care of in the next decade America will be a third world country. LD