Since the 1970s, wages for working-class Americans have stagnated, a phenomenon reflected in the downward trend of employee compensation as a share of the gross domestic income. The first graph illustrates this decline, showing how wage and salary accruals have diminished as a proportion of the economy over the past five decades. At the same time, the United States has experienced significant shifts in immigration policy and demographics, as evidenced by the second graph, which tracks the rising share of foreign-born residents in the U.S. population.
The juxtaposition of these two graphs highlights economic trends and immigration’s impact. Wage stagnation, often attributed to factors like automation, globalization, and the decline of unionization, coincided with an increase in the foreign-born population, particularly after the Immigration and Nationality Act of 1965. This legislation transformed the demographic composition of the U.S. workforce, opening pathways for immigrants from around the world and increasing labor market competition in certain sectors.
Critics of increased immigration and open borders argue that the influx of immigrant labor has contributed to wage stagnation, particularly for low-skilled workers. They contend that a larger labor pool, especially in industries reliant on manual labor, drives down wages due to basic supply-and-demand dynamics. However, proponents of immigration emphasize the economic benefits immigrants bring, such as filling labor shortages in critical industries.
The second graph demonstrates that the foreign-born share of the population reached historic lows in the mid-20th century before rising steadily from the 1970s onward. By 2018, nearly 14% of Americans were foreign-born, reflecting a substantial demographic shift. This trend aligns with changes in the labor market, including the rise of service-oriented jobs and the decline of manufacturing. Critics of current immigration policy point to this correlation, suggesting that unchecked immigration has exacerbated economic inequality.
During the first Trump administration, proposals were made to address these dynamics, particularly through stricter immigration policies. The administration sought to limit the number of low-skilled workers entering the country while focusing on protecting American jobs through policies like E-Verify enforcement and restrictions on certain visa programs. These proposals were framed as ways to reduce competition in the labor market and create upward pressure on wages for American workers, particularly in industries like manufacturing and construction. However, critics argued these measures risked harming sectors reliant on immigrant labor and ignoring broader systemic issues affecting wage stagnation.
This issue has also been a cornerstone of Senator JD Vance’s rhetoric during his time in office. Vance often highlighted the connection between immigration policies and their impact on working-class Americans, framing it as a battle to rebuild the middle class and strengthen families. He has called for tighter immigration controls and policies that prioritize the economic well-being of American workers, while also advocating for broader reforms to restore manufacturing and reduce the corporate focus on globalization. For Vance, addressing wage stagnation is not just an economic issue but a cultural and social imperative tied to restoring the American dream.
