Raising The Minimum Wage, Without Raising The Minimum Wage

I noted in December after Trump's election that one problem I foresaw with his position against illegal immigrants and building a wall was the low unemployment and the high non-participation rate by legal citizens of this US of A. The unemployment rate at the time was 4.9% and has since dropped to 4.4%, which is quite low, and the participation rate has bounced around a bit but is about the same, which also is extremely low - it's lowest in decades.In short, my position was that we likely need a lot of these illegal aliens to fill the jobs. 

Don't get me wrong, I am not in favor of people entering the country illegally and certainly any who commit crimes need to be dealt with, but the reality is there are a lot of jobs out there these folks are filling that are not being filled - or wanted - by legal residents. I am more in favor of allowing more folks from outside the country, be it Mexico or elsewhere, to come in legally with proper vetting. And I suspect plenty of employers agree, especially some in the construction trade, agriculture and service sector.

Thus, I was a tad surprised this week when the Administration announced its RAISE Act that is reportedly designed to reduce the issuance of green cards, i.e. legal immigration, by 50% and that by its very terms targets immigrants who do not speak English and would fill low wage jobs. Hmm, what immigrants would that be?

The surprise to me is that the Administration is targeting low wage jobs. Nearly all the job growth in the U.S. for the past couple of years has been service sector jobs, which are low minimum wage type jobs, perhaps with tips. We are talking waiters, bartenders, checkout clerks, cooks, maids, bus boys (which I did one summer and do not recommend) and the like. Not high paying jobs. But as President Trump mentioned in announcing the new RAISE Act, it will eliminate a lot of competition for low paying jobs, effectively making employers pay more for U.S. citizens to fill those jobs. Which means we are not raising the minimum wage, but the RAISE Act will RAISE the effective minimum wage.

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