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Inflation Driven by Explosion in Migrant Worker Pay: WSJ

Neil Campbell
Neil lives in Canada and writes about society and politics.
Published: February 9, 2023
WSJ says inflation is being driven by an explosion in pay earned by legal and illegal migrants.
A file photo of the Southern border migrant crisis at the Rio Grande in El Paso, Texas on Dec. 20, 2022. U.S. inflation is being driven by an explosion in the wages earned by both legal and illegal migrant workers, The Wall Street Journal states. (Image: John Moore/Getty Images)

An unsung factor of record inflation driving up the real world cost of goods and services is an explosion in the rate of pay being netted by both legal and illegal migrants occupying U.S. jobs, according to a recent report by The Wall Street Journal.

“Many small businesses say they are unable to hire enough native-born and naturalized workers and are paying a premium for migrant workers,” authors Santiago Pérez and Michelle Hackman wrote in the Feb. 7 article.

One concrete example researched by WSJ was that of owner of Lauriol Plaza, a D.C.-based tex-mex restaurant, Luis Reyes, who described the recent quandary of how to staff his business as “a terrible stress.”


“Many times I suffer from insomnia thinking about what we are going to do to give service,” he added.

WSJ said that Reyes has been forced “to distribute fliers in subway stations and at bus stops in neighborhoods with large migrant communities” in order to meet his staffing needs.

The Jobs section of his restaurant’s website says that as of time of writing, they’re hiring for:

  • Hosts and hostesses
  • Busboys
  • Food prep helpers
  • Cook assistants
  • Servers

Reyes told WSJ that before Coronavirus Disease 2019 (COVID-19) pandemic lockdown measures, mandates, work from home edicts, and stimulus checks threw the economy out of balance, he used to give staff members free lunch certificates as a Christmas bonus.

But last December, Reyes paid kitchen staff as much as $5,000 in cash bonuses in an attempt to keep his people showing up to work.

WSJ states that while no federal agency collects data on wages to immigrants, one statistic that may reflect an increase — or lack thereof — to migrant workers is remittances to Latin America, reflecting disposable income sent back to a worker’s home country.

According to the Journal, World Bank data showed remittances to Latin America increased by 9 percent to $142 billion in 2022.

The outlet spoke to one Honduran migrant who entered the country illegally two years ago. The man stated that while he was originally making $13 an hour, he now makes $18 an hour assembling shelves in a Florida warehouse.

Some jobs he takes also pay for his lodging as they require him to travel to New York or Kansas.

A member of the advocacy group United Workers of Washington D.C. told WSJ that D.C.-area migrant construction workers had seen a pay increase from $120 per day to more than $200 per day, amounting to roughly 60 percent.

To put the figure into context, data from the Labor Department shows construction worker wages have increased by only 15 percent since late 2019, the outlet added.

One of the key factors in an expanding migrant workforce, the Journal noted, is a Biden Administration expansion of the Temporary Protected Status program, which prevents people from countries “destabilized by wars or natural disasters” from deportation, while also providing work permits.

WSJ says 700,000 such work permits have been issued to migrants who were already residing illegally in America.

But it’s not only the displaced who are benefitting. In some cases, individuals who otherwise would not pass U.S. border security screening processes are gaining work permits as a result of loopholes in the system.

In August of 2021, a Department of Homeland Security whistleblower told investigative journalist team Project Veritas that some individuals entering the Southern Border amid its unprecedented migrant crisis have been claiming asylum despite being listed on the Transnational Criminal Organizations (TCO) watchlist.

One specific example provided by the whistleblower was documentation showing a member of the 18th Street Gang, described as a “serious transnational criminal activities” as serious as “kidnapping, human smuggling, sex trafficking,” in addition to “blackmail, extortion, and immigration offenses,” was able to apply for asylum as the sponsor of an “Unaccompanied Alien Child.”

The whistleblower explained how the loophole was being exploited, “When you come across illegally, you have no status and you are what’s called ‘Entry Without Inspection.’ At that point in time, you’re basically always put into what’s called a deportation process.”

“If in that time you inform the U.S. Government that you have some type of fear that your life is in jeopardy, or you’ll be persecuted, or you may be tortured,” the DHS staffer said the migrant’s status would be changed to “Reasonable Fear” status.

They explained that if a TCO member is granted Reasonable Fear status, which is determined at the discretion of an asylum officer and not a court, they will be removed from the watchlist.

Reasonable Fear status migrants are permitted to remain in America while their legal process, which can take years to resolve, plays out.

Moreover, once a migrant is granted Reasonable Fear status, they are enabled to apply for an Employment Authorization Card, which the whistleblower described as “essentially…a work permit.” 

A Jan. 23 article by the U.S. Chamber of Commerce titled Understanding America’s Labor Shortage encapsulated the problem, “Right now, the latest data shows that we have over 10 million job openings in the U.S.—but only 5.7 million unemployed workers.”

“We have a lot of jobs, but not enough workers to fill them. If every unemployed person in the country found a job, we would still have 4 million open jobs.”

The Chamber noted that COVID pandemic measures left a long-lasting impact, “We have nearly three million fewer Americans participating in the labor force today compared to February of 2020.”

In attempting to find the cause, the Chamber conducted a survey in May of 2022, which found that 28 percent of respondents stated that they’ve become ill and health concerns have kept them from returning to work.

However, the survey was of a small sample size, polling only 514 Americans, all who lost their job during the pandemic and had not returned to full time employment.

The Journal explains that the utilization of migrant workers results from a lack of domestic supply, as evidenced by an increase in the number of H-2B visas issued, which was raised to 130,000 in fiscal year 2023.

“The visas are often used by landscapers, fisheries, holiday resorts or county fairs to fill seasonal positions that Americans won’t take at the salaries being offered,” the Journal states.

And demand is high, “A portion of this year’s total has already been distributed for the winter season, leaving fewer than 80,000 visas available for the summer, government data show. Yet employers have already requested 142,000 for the warm-weather season.”

However, the income earned by some migrants WSJ interviewed appears to be at least commensurate with the average for various areas.

A 51-year-old Colombian woman was said to have entered America on a tourist visa, intending to obtain work to pay off a $100,000 mortgage that had incurred $35,000 in back payments after her job was destroyed by pandemic restrictions.

She stated that she arrived in New York at 2:00 p.m. and, within two hours, had obtained a job paying $15 per hour making sandwiches at a deli.

The New York State minimum wage is $14.20 per hour.

“Now, the woman said she earns between $900 and $1,300 a week in cash working in restaurant kitchens, caring for the elderly and cleaning houses,” the Journal added.

According to website ZipRecruiter, the average annual wage in the State is $51,590 per year, amounting to $25 per hour, an almost identical figure to the $1,100 weekly average she earns.