Wall Street Journal: Wages, Productivity Jump in Donald Trump’s ‘Hire American’ Economy

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Associated Press
Neil Munro

President Donald Trump’s “Hire American” economic policy is forcing companies to pay higher wages and also buy the labor-saving machinery which allows Americans to produce more value in less time.

Trump’s “Hire American” success-on-success was spotlighted March 1 by the Wall Street Journal:

Surging demand for its products has sent Republic Wire Inc. on a hiring spree in West Chester, Ohio. The producer of copper and aluminum wiring has boosted its team by 50% over five years to 140 people. The company has automated work where it can. Machines now box and label wire, and add the packages to shipping pallets—work that previously required up to nine staffers—freeing employees for higher-value tasks.

This dynamic in which rising wages boost productivity is radically different from several years ago when former President Barack Obama set economic policy.

Obama imported a record number of legal migrants and cheered the free trade deals which allowed companies to move jobs overseas to cheap labor countries. His skewed labor policies allowed CEOs and Wall Street investors to spike their stock prices by outsourcing jobs overseas, hiring cheap imported workers instead of buying machines and also topping off workers’ low wages with taxpayers’ aid and welfare.

With plenty of cheap labor, Obama’s corporate allies — and their media cheerleaders — ignored the growing population of sidelined Americans — including many disabled workers, former criminals, and current drug addicts — and also ignored Americans’ flat wages.

But Trump’s “Hire American” policy flipped the script.

He reduced the inflow of foreign workers, and gave investors and CEOs no choice but to pay higher wages to their American workers, to train sidelined workers, and also to invest in productivity-boosting machinery.

The Wall Street Journal continued:

Republic Wire operates 24 hours a day during the week to fulfill orders, and is looking for an additional 15 hires, said Chief Executive Ron Rosenbeck, adding that the company has increased wages 4% annually each of the past five years to retain workers, above the national rate of wage gains.

The company has tried to fill roles by reaching out to local technical colleges and posting “now hiring” signs outside its facility. But the region lacks available skilled workers, Mr. Rosenbeck says, so the company has also turned to staffing agencies, hiring temporary workers for entry-level positions. The company will spend up to six months to train those temporary workers into full-time, skilled roles, such as machine operators. “Even though it’s taken us longer,” Mr. Rosenbeck says, “we’re finding that’s been the way to go to build up these people into skilled positions.”

Nationwide, wages rose 3.0 percent in 2018. But wages rose by 4.6 percent among Americans who switched jobs and by 5.2 percent in Minnesota where few migrant workers choose to live.

Wages are set to keep rising up to the 2020 election, so giving Trump a huge boost from the economy.

But Trump is facing intense pressure to discard his “Hire American” success by importing more foreign workers, especially the foreign “merit” workers who can be slotted into Americans’ middle class and college graduate jobs.

The pressure is coming from business-first Republicans, such as the companies and lobbyists in the Koch network. They are pleading for cheap imported workers to help cut their labor costs, cut their investment costs, and raise their stock values. Many of those business-first Republicans hold jobs in the White House.

Trump is slowly bending towards the business groups, so threatening his “Hire American” success. Breitbart News reported March 3:

During the Conservative Political Action Conference (CPAC) this weekend, President Trump broke from his past opposition to the country’s mass legal immigration system, instead touting a legal immigration system that benefits “our corporations.”

…

“We need an immigration policy that helps all Americans thrive, flourish, prosper. We need an immigration policy that’s going to be great for our corporations and our great companies,” Trump said. “We need an immigration policy where people coming into our country can love our country and love our fellow citizens.”

“And now, we want people to come in, we need workers to come in but they’ve got to come in legally and they’ve got to come in through merit,” Trump said.

Any inflow of foreign workers — whether they are legal or illegal, whether they are permanent immigrants or temporary H-1B visa workers– cuts jobs, wages, and salaries for Americans, and also transfers the lost wages to CEOs and investors.

This federal policy of using legal and illegal migration to boost economic growth shifts enormous wealth from young employees towards older investors by flooding the market with cheap white-collar and blue-collar foreign labor.

That annual inflow of roughly one million legal immigrants — as well as the population of two million visa workers and eight million working illegal immigrants — spikes profits and Wall Street values by shrinking salaries for 150 million blue-collar and white-collar employees, especially the wages earned by the four million young Americans who join the labor force each year.

The federal government’s cheap labor policy widens wealth gaps, reduces high tech investment, increases state and local tax burdens, hurts kids’ schools and college education, pushes Americans away from high-tech careers, and sidelines millions of marginalized Americans, including many who are now struggling with fentanyl addictions.

Immigration also steers investment and wealth away from towns in Heartland states because coastal investors can more easily hire and supervise the large immigrant populations who prefer to live in coastal cities. In turn, that coastal investment flow drives up coastal real estate prices and pushes poor Americans, including Latinos and blacks, out of prosperous cities such as Berkeley and Oakland.

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