FACT CHECK: Are Low-Skill Wages Growing At Their ‘Fastest Pace Yet’?
Arkansas Sen. Tom Cotton claimed Sunday on ABC’s “This Week” that wages for low-skill jobs have increased “at their fastest pace yet.”
Economic data show that low-skill wages have at times grown at significantly higher rates over the last couple decades.
As congressional leaders continue to debate immigration reform, Republicans like Cotton have argued for measures that would limit chain migration and tighten border security. Cotton believes that restricting the U.S. labor supply by stemming immigration could increase wages for working-class Americans.
While discussing current efforts at reform with ABC host George Stephanopoulos, Cotton claimed that low-skill wages are clocking record growth.
“One of the unheralded accomplishments of the first year of the Trump administration that gets overlooked, you know, with the growing stock market, for instance, is that wages for people who work with their hands and work on their feet – the kind of jobs where you have to take a shower after you get off work, not before you go to work – have increased at their fastest pace yet,” Cotton said.
But monthly economic data indicate that hourly wages for low-skill jobs are not increasing at a historic pace.
The Federal Reserve Bank of Atlanta tracks the 12-month moving average of median wage growth. Economic policy experts told The Daily Caller News Foundation that because employment and wage rates fluctuate seasonally, 12-month average data provides a more accurate depiction of long-term wage growth over monthly or quarterly data alone.
The Fed reported a median wage increase of 2.9 percent for low-skill jobs in November 2017, but this is not record-setting growth.
Low-skill wage growth was at a nearly two-decade peak of 4.8 percent in August and October 1998, according to the Fed. Wage growth has, moreover, equaled or exceeded the latest rate of 2.9 percent in over 130 months since the start of 1998.
Quarterly data from the Bureau Of Labor Statistics (BLS) that show the 12-month change in median weekly wages similarly contradict Cotton’s claim.
The BLS breaks down wage data by workers’ highest level of educational attainment, and several policy experts recommended that TheDCNF focus on data for workers who have attained either a high school diploma or less as a rough proxy for low-skill workers.
BLS reports that workers with a high school diploma experienced wage growth of 2 percent in the year before September 2017. This increase is almost a third of the peak of 5.8 percent growth recorded for the 12 months before September 2003.
Workers with no high school diploma received wage increases of 3.6 percent in the 12 months before September 2017, compared to a high of 11.6 percent recorded for the year before September 2008.
Cotton’s office responded to TheDCNF’s request for comment with reports from The New York Times and Indeed Hiring Lab that note how recent employment and wage growth have been particularly robust in low-wage industries. Both reports also highlight that wages for less educated workers have recently increased faster than they have for more educated workers.
The most recent data from BLS does indicate slower wage growth for workers who attained at least a bachelor’s degree compared to those with just a high school diploma or less.
But robust wage growth for low-skill workers, nevertheless, does not substantiate Cotton’s claim that low-skill wages are rising at their “fastest pace yet.” TheDCNF could not find any measure of wage growth to back up the congressman’s claim.
Cotton credited better immigration policy for the wage growth low-skill workers have experienced under President Donald Trump.
“There’s a reason for that; it’s not just the growing economy,” Cotton explained, “but it’s also that this administration is getting unskilled and low skilled immigration under control.”
Trump endorsed an immigration reform bill introduced by GOP Sens. David Perdue and Cotton, and the President has publicly supported an end to chain migration and diversity visas. His administration has also taken steps to crack down on illegal immigration and sought to tweak worker visa programs.
But experts TheDCNF spoke with instead placed more weight on “the growing economy” than on these proposals and policy changes.
“We haven’t seen any policies that directly would have contributed to low-skill wage growth. This just seems to be general economic recovery: unemployment has dropped and other economic indicators are trending towards the right direction,” Dr. Aparna Mathur of the right-leaning American Enterprise Institute (AEI) told TheDCNF.
Low-skill workers may also be disproportionately affected by cyclical economic swings.
“High-skill or higher-wage earners are more sheltered from the business cycle. They don’t get batted around as much in a weaker economy,” Dr. Elise Gould of the left-leaning Economic Policy Institute (EPI) said to TheDCNF. “As the economy approaches full employment, you should see disproportionate gains at the lower ends of the labor market – they’re the ones whose wages move most in good times and in bad times.”
Dr. Steven Camarota, director of research at the right-leaning Center For Immigration Studies (CIS), still pointed towards some potential, albeit subtle, effects of Trump’s tougher immigration stance on wages.
“The mere threat of something can matter,” Camarota explained. “The threat of enforcement can make illegal immigrants more willing to go home, and employers less willing to hire them. All of it could be playing a role … Economics can be funny that way.”
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