Trump’s ‘Hire American’ Policy Delivers Fastest Wage Growth Since 2009

US President Donald Trump speaks after touring Snap-On Tools in Kenosha, Wisconsin, April 18, 2017, prior to signing the Buy American, Hire American Executive Order. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
SAUL LOEB/AFP/Getty Images

President Donald Trump’s “Hire American” policy pushed Americans’ wages up by 3.4 percent in the last 12 months, according to employment data released March 8.

“We’re seeing wages rise more than they have at any time for a long, long time,” Trump told reporters. He added:

The big news, really, was that wages went up. And that’s great for the American worker. That’s something people — I don’t know if they ever expected to see it.

Vice President Mike Pence said, “wages are rising at the fastest pace in nearly a decade, and more Americans are working today than ever before in the history of our country.”

Americans’ wealth-creating productivity is also rising much faster than under former Presidents George W. Bush and Barack Obama. Productivity rose 1.8 percent in 2018, up from 0.2 percent in Obama’s last year, because higher wages are pressuring employers to buy the labor-saving machinery that will help Americans produce even more wealth.

But all the good news comes just after Trump publicly walked away from his “Hire American” economic strategy that made it all possible.

On March 6, Trump told Apple CEO Tim Cook and other CEOs that he would open a new pipeline of cheap foreign workers for tech companies. That shift is good for companies who do not want to hire workers away from each other by offering escalating salaries.

The goal, said Trump, is to expand corporate revenues, profits, and stock prices:

These are very ambitious people around this table. They don’t like the concept of not expanding. Would you say that’s right, Barbara [Humpton, CEO of Siemens USA]? Barbara is not into non-expansion. So we want to have the companies grow. And the only way they’re going to grow is if we give them the workers.

Since early 2017, Trump has faced mounting corporate pressure to reverse his “Hire American” policy. That pressure has been growing as wages for white-collar workers inched up and has been growing stronger as wages for information technology workers rises. For example, wages for “information” employees rose 6.5 percent from $39.15 per hour in February 2018 up to $41.71 per hour in February 2019. In general, every dollar added to wages is a dollar cut from profits and causes a $15 cut in companies’ stock prices.

To suppress these wage gains, Cook and his peers want to import more cheap, foreign workers via the H-1B, L-1 and OPT visa programs. In 2018, for example, Apple asked for federal approval to import 1,814 H-1B visa-workers and to get green cards for 103 visa workers. Overall, U.S. companies already employ at least 1.5 million of these visa workers.

Trump’s pro-corporate abandonment of his “Hire American” policy also comes as newspapers increasingly, but grudgingly, acknowledge his success in delivering prosperity to a wide class of ordinary Americans who were left behind since 2000.

The news reports are showing that Trump is making Americans’ bank accounts great again after 16 years of catastrophic failure by Bush and Obama.

“Workers suddenly have more power to demand higher pay and better jobs,” the Washington Post admitted March 8:

Workers are receiving the fattest wage increases since the Great Recession as employers struggle to find enough people to fill their ranks and employees have more leverage to demand higher pay and jump to better jobs.

Wages grew 3.4 percent in the past year, the government reported Friday, the fastest pace in nearly a decade and well above inflation, suggesting that employers are hustling to lure and retain workers. Many are slashing requirements for jobs and are hiring workers quickly to prevent them from being scooped up by competitors, a far cry from the days when job seekers felt lucky to even get a callback.

Costco announced this week that it is raising pay for its entry-level workers to $15 an hour — up a dollar from an increase nine months ago.

The February jobs report “offered some unambiguously good news, including 3.4 percent year-over-year wage growth, the strongest in a decade,” said the New York Times. It continued:

A broader measure of employment that includes part-timers who would prefer full-time work and those too discouraged to search fell to 7.3 percent from 8.1 percent. “That’s a year’s worth of improvement in one month,” said G. Scott Clemons, chief investment strategist at the private bank Brown Brothers Harriman.

With job postings outpacing applicants, Adecco has started to offer daily pay to lure more people into the pool of potential workers. Many job seekers can’t wait two weeks for the paychecks, Mr. Ravenscroft said. Now, “if you log eight hours that day, you get paid for it.”

The Wall Street Journal reported that “hourly worker wages … were up 3.4% from a year earlier in February, the strongest pace since April 2009.” The Journal continued:

Jermaine Waller is one worker feeling the benefits of higher wages. After eight years working minimum-wage security jobs, Mr. Waller, 31, grew frustrated and pursued training, becoming certified as a collision-repair technician.

In February he started work at Blossom Chevrolet in Indianapolis, Ind., which offered Mr. Waller a raise to $17.50 an hour to lure him from another dealership. He said a shorter commute means he could surprise his son with lunch at school.

“I can afford the stuff I never had—and to be the Dad I never had,” he said.

The Associated Press reported that “average hourly pay last month rose 3.4 percent from a year earlier — the sharpest year-over-year increase in a decade.”

Throughout 2018, wages rose faster among Americans who switched jobs and faster in states with low shares of immigrant workers. In Minnesota, for example, immigrants have inflated the labor supply by only ten percent, so wages rose by 5.2 percent during 2018.

Amid the rising wages, Minnesota’s Democratic Sen. Amy Klobuchar is protesting the low unemployment rate and the lack of imported workers which are spiking the salaries paid to her voters.

In Congress, legislators are also feeling pressure from business groups. For example, legislators in the House and Senate are proposing a plan that would encourage many Indians, Filipino, and Chinese college graduates to take low-wage jobs in the U.S. healthcare industry from U.S. college graduates.

Trump knows that his “Hire American” policy is forcing companies to hire people they do not want to hire. On February 25, for example, he said his strong economy is pressuring companies to hire former convicts. He said:

Many states here today are following the same roadmap to help former inmates become productive and law-abiding citizens. And one of the thing that’s helping the inmates so much — you know this probably better than I do — the economy is so strong that inmates, for the first time, are getting jobs when they come out.

And I have a friend who’s hired seven or eight. I can’t say every one was perfect, but he said, “Five are — I’ll always have them. They’re great.” They got a chance. Nobody would hire them because they have that — whatever it is in the background. And it’s a very tough situation for them in the past.

But the economy is so strong. The economy — the strength of the economy became our best friend. They couldn’t get workers, and now they’re hiring people that they normally wouldn’t have. And the results are incredible. Companies all over the country are saying, “Wow, they are really — they’re really doing a great job.” And it makes me very happy. I think without that very powerful economy it couldn’t happen.


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