Archive for January 14th, 2010

There was an article in the Oregonian Newspaper on January 10, 2010 in which UCLA Professor Raul Hinojosa-Ojeda claimed his research showed that wages in the United States went up after amnesty for undocumented workers was granted in November 1986. Apparently the good professor didn’t know that real private sector hourly wages began rising earlier than that, in January 1986. Real wages reached $7.99 an hour during November 1986, and then immediately began a seven and a half year decline starting in December 1986. Real wages didn’t reach that November 1986 level again until February, 1999.

If there is a link between amnesty for undocumented workers and real wages, as Hinojosa-Ojeda claims, it is that granting amnesty will lower the standard of living for everybody for years and maybe even decades to come.

I don’t know where Hinojosa-Ojeda got his numbers, but I got mine in less than ten minutes, on-line, at the United States Bureau of Labor Statistics.

Real wages measure the true standard of living. When wages rise, inflation is subtracted from it, and that is the real wage. For example, if your wage is ten dollars an hour and then it rises during a twelve month period to $10.20, your wage went up 2 percent. However, if inflation went up 5 percent, you lost fifty cents of spending power out of that $10.20. Therefore, your real wage declined because you need to subtract that fifty cents from your $10.20. Your spending power is only $9.70. Your real wage declined.

Real wages dropped like a rock for seven and a half after the last amnesty. Although it is conjecture, as illegal workers acquired a path to citizenship, the legal labor force swelled and depressed wages.

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