Open borders and the decline of the American wage premium / by kevin murray

The middle class of America has lost serious ground vis-à-vis the overall economic strength in America.  So that, as reported by "In 1970, 55 percent of U.S. income was earned by households in the middle 60 percent of the income distribution," but by 2013, this number had fallen to about 45 percent.  Yet, America's overall economic strength is still preeminent and remains the strongest in the world, signifying that though good money is being made, it mainly is being made at the very top, while the middle class earnings have precipitously declined and the impoverished in America remain impoverished.


There are plenty of theories about the economic decline of the middle class in America, but such a decline has nothing to do with the economic pie of this country shrinking, for the top 1% as reported by demonstrated that their "… share of wealth held by the top 1 percent rose from just under 30 percent in 1989 to nearly 49 percent in 2016," so that, in all likelihood the most significant reason why middle class wages have declined is that open borders and low or non-existent tariffs are not beneficial for the middle class, but are extremely beneficial for certain businesses, while, on the other hand, being quite destructive for other domestic businesses.   Further to the point, American workers have over the last century, received a wage premium over other workers, even those from European nations, but this wage premium is currently in the process of eroding by virtue of the fact that because the world has appreciably grown smaller, with goods being able to be easily transported from one port to another, indeed, at a very reasonable cost; that any country that has the same sort of technology skills, imported or not, as well as operator skills, in addition to the requisite management skills, are readily able to undercut most domestic manufacturers that do not outsource anything.


So that, corporations that are headquartered in America in order to remain competitive on a worldwide stage, have deliberately moved certain segments of their production as well as their technical knowhow overseas because of the incredible labor and production savings, and consequently many qualified workers in America, are either now out of work, or have mainly found alternative work but at a lesser hourly rate, or have trained/educated themselves into some other work.  While it is fairly easy to replace many blue collar jobs with robotics or relatively unskilled labor, it is another thing to replace those that are highly educated, but it's now being done, especially by countries of large populations with educated work forces, such as China and India. This indicates that a higher percentage of white collar workers are now susceptible to the very same things that blue collar workers having been suffering through over the last few decades, which is wage stagnation or even worse.


The bottom line is that if the most important thing for a corporation is to make money, and in particular, making as much as they can make, than they, quite obviously are going to continue to outsource jobs overseas because those that labor overseas are substantially cheaper in their wage needs than domestic American workers.  So then, as great as the economy has been in America, those that reside in the executive office, are the ones that make the lion's share, and those that are not, get nothing but the scraps, if even that.