Trade agreements more dangerous to wages than immigration - Analysis

Eliyahu Tulshinski

November 29, 2023

The EU morphed from a mutual defense and cooperation pact into a borderless region where citizens can live and work in any nation they please, leading to so called “wage convergence” that has brought down the standard of living in wealthier nations. The USMCA (which replaced NAFTA), on the other hand, is still far away from developing into a regional government like the EU.

But with immigration advocates now conceding that immigrants are, in fact, driving down wages, it may be time to consider how devastating it would be to American wages to allow a super migration in which all one billion people in the Western Hemisphere are free to live and work in the United States.

Immigration doesn't affect wages, except when it does

Director of Research at the Center for Immigration Studies Steven Camarota made an astonishing observation as inflation became problematic in the Biden administration — immigration advocates are suddenly not only conceding that the nation's 49 million (legal and illegal) immigrants drive down wages, but are now saying that those lower wages are desirable (to fight inflation):

For years, immigration activists countered that any negative wage impact due to immigration was inconsequential — until now. A number of prominent economists and advocacy groups, many of which previously argued that immigration has little or no wage impact, are now calling for more immigration to reduce wages to lower inflation.

The latest immigration advocate to call for more immigration to lower wages is George Mason professor Justin Gest. Drawing on research he did for the immigration advocacy group Fwd.us, he recently wrote in the Wall Street Journal that the country needs more immigration to reduce wages and stem inflation in high-growth cities, particularly in sectors such as hospitality and construction. But Fwd.us explicitly states on its website that it is a “myth” that immigration “drives down wages.” [Emphases added].

Camarota adds that the National Immigration Forum and the U.S. Chamber of Commerce have likewise had “a change of heart” about the impact of immigration, admitting that it suppresses wages. More recently, Camarota testified before a congressional hearing on, “The Impact of Biden’s Open Border on the American Workforce”:

There is clear evidence that immigration reduces the wages and employment of some U.S.-born workers . . .

It is likely that there are now roughly 8.8 million illegal immigrants in the U.S. labor force. . . .

In its 2017 magisterial report, the National Academies of Sciences, Engineering, and Medicine reviewed the research on the effects of immigration on the U.S. labor market and cited numerous academic studies showing negative wage impacts from immigration, particularly on the least educated. [Emphases added].

How much are wages suppressed by immigration? The cited National Academies of Sciences, Engineering, and Medicine review arrived at a wage reduction of 0.3% for every 1% increase in the supply of immigrant workers.

The Schengen Area - go anywhere

What started in 1948 as the Brussels Pact establishing cooperation and a mutual defense pact between six western European nations morphed, by the 1990s, into the 27-nation European Union (EU) that abolished international borders and individual currencies.

Twenty EU nations now use the Euro as their official currency and 23 EU states have no permanent border checks between them. Rather, border control officers only operate on the outer perimeter of those 23 states which are joined by four additional non-EU states to form what is known as the Schengen Area, named after the city in which the open borders agreement was signed, making it a 27-state passport free zone.

Only temporary border checks may be set up between Shengen Area nations, and only for extraordinary reasons like a wave of violence. These checks do not stop citizens of one of the 27 nations from going to another as they please.

And when one Shengen nation allows a citizen from a non-Shengen country to visit, the visitor can then travel anywhere they like within the superstate without additional border checks.

EU - work anywhere

The EU permits each of its citizens to work wherever they want throughout the 27-nation superstate:

As an EU national you generally don't need a work permit to work anywhere in the EU. Work permits are never required for self-employed people in the EU. [Emphases added].

Let poorer nations catch up

Open borders for workers lead to what academics call "wage convergence” between European countries, with wage inequality between wealthier and less wealthy nations being “significantly reduced.”

An EU report notes that this convergence has been accomplished by slowing wage growth in wealthier EU nations:

It is an upwards wage convergence process mainly explained by strong catch-up growth in Eastern European countries, while Mediterranean countries failed to converge significantly. On the other extreme, wages progressed much more moderately in most countries among continental, Scandinavian and the isles of UK and Ireland. . . . [Emphases added].

Although the convergence came at the expense of the standard of living in wealthier EU nations, the EU describes the results as “positive.”

The results presented here provide evidence supporting the implicit assumption of the EU project that economic integration should lead to socio-economic convergence between its Member States, which has been the case in the area of wages over the last couple of decades, as shown in here. This notable reduction in cross-country wage differentials would as well provide evidence as to the positive results of the European regional development policy implemented from decades ago and aimed at narrowing the differences between European Member States and regions. [Emphases added].

Jobs move as well

In addition to the prospect of workers from poorer nations moving to wealthier nations as part of a trade pact, jobs themselves can be expected to move out of those wealthier nations, as businesses and factories relocate or outsource work to poorer nations. Senator Bernie Sanders opposes trade pacts for this very reason, listing the specific number of jobs each trade pact is estimated to have cost the nation:

Since 2001, nearly 60,000 manufacturing plants in this country have been shut down and we have lost over 4.7 million decent paying manufacturing jobs. NAFTA has led to the loss of nearly 700,000 jobs. PNTR with China has led to the loss of 2.7 million jobs. Our trade agreement with South Korea has led to the loss of about 75,000 jobs.

Here?

Citizens of nations invited to join the Brussels Pact in post World War II Europe were not informed that they would be sacrificing their nations' sovereignty as the pact grew in scope.

Americans can also expect to be kept in the dark about the ultimate intentions of the planners behind the USMCA (which replaced NAFTA), the Declaration of North America, the TPP and the rest of the so called trade agreements. They may be well served by keeping in mind the possibility that freedom to work throughout the Americas is on the menu.

See our previous coverage of the globalist agenda and Vivek Ramaswamy's support for trade agreements: