Cheap migrant labor is the cause of subsiding inflation numbers — while also depressing the wages of American workers. While inflation ticked up slightly in December, the overall trend has shown prices falling — for the most part — as the demand for labor is easing and wages fall.
According to Yahoo Finance, foreign-born labor numbers by December of 2023 were nearly 10 percent higher than they were pre-coronavirus pandemic — with 20 percent of the U.S. labor force being comprised of immigrant workers. While Yahoo points to the immigrant labor increases as a reason for subsiding inflation, the increase in foreign workers has also driven down the wages of American workers — arguably decreasing their quality of life.
In addition, the increase in foreign labor could also have contributed to December’s elevated inflation numbers. The influx of immigrants also means an increase in consumers. Additional consumers mean an increase in demand for products — which often leads to higher prices. While the finance industry experts cited by Yahoo Finance fail to mention this problem, they do fret that the addition of non-productive immigrants “such as elderly relatives, stay-at-home mothers, and students” could negatively impact the economy.
Financial industry experts, cited by Yahoo Finance, argue the increase in immigrant labor helps the U.S. avoid a theoretical ‘wage-price spiral.’ However, there is scant evidence this was the case in the U.S. where wages have lagged behind inflation for years. Even the U.S. Federal Reserve has argued a minimal degree of inflation — around two percent — is desirable to avoid a deflationary trap – which was a top concern shortly before the coronavirus pandemic.
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