Why Rich People Love Poor Immigrants

Soon after the Immigration Act of 1965 was passed, real wages of low-skilled workers soon stopped growing and have gone nowhere ever since.  The incomes of the rich, however, accelerated upward.  Both events can be explained by the mass immigration of cheap labor.  The combination of these events presents an immediate threat to democracy. The inflation-adjusted wages of low-skilled workers would now be double current levels, if they had kept up with the historic trend (which is driven by the advance of technology and knowledge).  But the incomes of the rich have gone up at about double the historic trend rate, as shown in Figure 1.  (Click here for my sources and notes.)  Similar things happened from 1820 to 1910.  The ratio of the top 1% of incomes to unskilled income has quadrupled since 1972, to a level far exceeding the previous peak in 1928.  The graph in Figure 2 shows that this ratio has gone up and down with the immigrant...(Read Full Article)
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