In 1973, the average American worker's hourly wage had the purchasing power of $23.68 in today's dollars. In 2024, it's essentially the same. Half a century of technological progress, productivity gains, and economic growth - and workers are no better off than their grandparents.
This isn't a mystery. It's basic economics. When you dramatically increase the supply of labor, you suppress wages. And since 1990, America has added over 30 million foreign-born workers to the labor market.
The Numbers Tell the Story
Real Wage Stagnation: 1973-2024
| Period | Real Hourly Wage (2024 dollars) | Change |
|---|---|---|
| 1973 (Peak) | $23.68 | - |
| 1995 | $21.00 | -11% |
| 2024 | $23.90 | +1% |
After adjusting for inflation, the average American worker earns essentially the same hourly wage as in 1973. More than 50 years of stagnation.
Median Household Income Growth Has Collapsed
| Period | Annual Income Growth Rate |
|---|---|
| 1970-2000 | 1.2% per year |
| 2000-2018 | 0.3% per year |
Income growth slowed by 75% after 2000. If incomes had continued growing at the 1970-2000 rate, the median household would earn $87,000 today instead of $74,600.
Labor's Share of GDP Has Fallen
| Year | Wages as % of GDP |
|---|---|
| 1970 | 51% |
| 2013 | 43% |
| Change | -8 percentage points |
Workers are getting a smaller slice of a bigger pie. The gains from economic growth are going to capital owners - and to cheaper labor.
The Immigration Connection
Harvard economist George Borjas - described as "America's leading immigration economist" - has documented the wage impact of immigration for decades.
Key Findings from Borjas Research
Immigration redistributes income. Economic theory predicts that immigration will redistribute income by:
- Lowering wages of competing American workers
- Increasing wages of complementary workers
- Increasing profits for businesses using immigrant labor
The hardest hit are the poorest Americans. Immigration has its largest negative impact on workers without a high school diploma - the poorest Americans who can least afford wage competition.
Native workers flee, spreading the impact. When immigration lowers wages in one city, native workers move elsewhere. This spreads the wage suppression nationwide - you can't escape it by relocating.
The Mariel Boatlift: A Natural Experiment
In 1980, 125,000 Cuban refugees arrived in Miami in just six months, increasing Miami's labor force by 7%. Borjas studied what happened to low-skill native workers:
| Metric | Finding |
|---|---|
| Wage drop for low-skill natives | Largest in any U.S. city |
| Recovery time | 10 years (by 1990) |
| Workers affected | Non-Hispanic men without high school diploma |
The wage drop experienced by Miami's low-skill workers was the largest seen in any local labor market in the United States.
The Foreign-Born Labor Force Explosion
Share of U.S. Labor Force That Is Foreign-Born
| Year | Foreign-Born Share | Number |
|---|---|---|
| 1970 | ~5% | ~4 million |
| 1990 | 9.3% | 11 million |
| 2000 | 13.3% | 17 million |
| 2010 | 15.8% | 24 million |
| 2023 | 18.6% | 30 million |
| 2024 | 19.2% | 31.4 million |
The foreign-born share of the labor force has nearly quadrupled since 1970. In 2024 alone, 31.4 million foreign-born individuals were in the U.S. labor force - one in five workers.
Native-Born Workers Are Dropping Out
Here's a statistic that should alarm everyone: the labor force participation rate of American-born men without a college degree has collapsed.
Labor Force Participation: U.S.-Born Men Without Bachelor's (Ages 18-64)
| Year | Participation Rate |
|---|---|
| 1960s | >90% |
| 2000 | 82.6% |
| 2006 | 80.5% |
| 2019 | 76.3% |
| 2024 | Still below 2019 |
More than 90% of working-age American men without college degrees were in the labor force in the 1960s. Today, it's around 76%. Where did they go?
They dropped out. Immigration - along with globalization, weaker unions, and a stagnant minimum wage - suppressed wages and made it harder for these men to find jobs. Many simply gave up.
The 2024-2025 Data: Real-Time Evidence
Recent Federal Reserve research confirms what Borjas documented decades ago.
Immigration Cools Wage Growth
A 2024 Kansas City Fed study found that the influx of immigrant workers dampened wage pressures across affected industries:
| Finding | Data |
|---|---|
| Wage impact | -0.7 percentage points wage growth |
| Per every | 1.0 percentage point increase in immigrant employment |
| Most affected industries | Construction, manufacturing |
Industries with the highest immigrant workforce growth saw the sharpest deceleration in wage growth.
Construction: A Case Study
| Metric | Value |
|---|---|
| Share of construction workers who are immigrants | 34% |
| Share of drywall/plasterers who are immigrants | ~60% |
| Construction wage growth (July 2025) | 8% (vs. 4% national average) |
When immigration enforcement increased in 2025, construction wages surged to nearly double the national average. The cause and effect is undeniable.
2025: What Happens When Immigration Slows
Federal Reserve Chair Jerome Powell acknowledged in 2025 that immigration policy was slowing labor supply:
> "Because of immigration policy really, the flow into our labor forces is just a great deal slower."
The result? Low-wage workers - who were supposed to benefit from reduced competition - saw their wage growth decline from 3.9% to 1.5% in 2025. But this reflects a broader economic slowdown, not the labor market effects of immigration reduction, which take years to materialize.
Who Benefits? Who Loses?
Immigration isn't bad for everyone. It's a transfer of wealth.
Winners from Mass Immigration
| Beneficiary | How They Gain |
|---|---|
| Business owners | Lower labor costs, higher profits |
| High-skill professionals | Cheaper services (nannies, restaurants, landscaping) |
| Upper-income households | Maintained standard of living |
| Immigrants themselves | Higher wages than home country |
Losers from Mass Immigration
| Group | How They're Harmed |
|---|---|
| Workers without college degrees | Direct wage competition |
| Young workers entering job market | Fewer entry-level opportunities |
| Black Americans | Historically faced strongest competition |
| Working-class communities | Declining wages, disappearing jobs |
The middle class has shrunk from 61% of adults in 1971 to just 50% in 2021. Meanwhile, upper-income households increased their share of aggregate income from 29% in 1970 to 50% in 2020.
Immigration accelerated this inequality.
The Pre-1990 Economy
What did America look like before mass immigration?
The 1950s-1980s Labor Market
| Metric | Then | Now |
|---|---|---|
| Foreign-born share of labor force | ~5% | 19% |
| Single income could support family | Yes | Rarely |
| Manufacturing jobs | Abundant | Scarce |
| Union membership | ~30% | ~10% |
| College required for middle class | No | Often |
The restrictive immigration policies from 1924-1965 created a tight labor market. Workers had bargaining power. Wages rose with productivity. A high school graduate could support a family.
The Solution
The economics are clear. To restore American wages:
1. Reduce immigration to pre-1990 levels Cut legal immigration from over 1 million to approximately 250,000 annually - the level maintained during America's greatest period of wage growth.
2. Enforce immigration law End illegal immigration, which adds 2-3 million annual competitors for working-class jobs.
3. Prioritize American workers End programs like H-1B that allow companies to hire foreign workers at below-market wages.
4. Allow the labor market to tighten With reduced immigration, employers will have to compete for workers by raising wages - exactly what happened in construction in 2025.
The Bottom Line
For 50 years, real wages have stagnated while corporate profits soared. This isn't a coincidence. It's the predictable result of flooding the labor market with tens of millions of additional workers.
The data is clear:
- Real wages peaked in 1973 - before mass immigration
- Wage growth collapsed after the 1990 Immigration Act
- Industries with more immigrants have lower wage growth
- Native workers are dropping out of the labor force
American workers deserve a labor market that works for them. That requires immigration levels that are sustainable - not the highest in history.
Sources
Wage and Income Data
- Economic Policy Institute: Wage Stagnation in Nine Charts - Analysis of 34 years of wage stagnation (1979-2013)
- Pew Research Center: For most Americans, real wages have barely budged - Real wage trends since 1964
- FRED: Real Median Household Income - Federal Reserve data on household income trends
- Pew Research Center: Trends in U.S. Income and Wealth Inequality - Income inequality analysis 1970-2020
Immigration Economics Research
- Center for Immigration Studies: The Wages of Immigration - Analysis of immigration's wage impacts
- Center for Immigration Studies: Immigration and the American Worker - George Borjas research summary
- George Borjas, Harvard Kennedy School: Publications - Original academic research
Labor Force Statistics
- Bureau of Labor Statistics: Foreign-Born Workers 2024 - Official 2024 labor force data
- Center for Immigration Studies: Employment Situation Q4 2023 - Native vs. foreign-born employment analysis
- USAFacts: Immigrants in the American Workforce - Current immigrant workforce statistics
Federal Reserve Research
- Kansas City Fed: Rising Immigration Has Helped Cool an Overheated Labor Market - 2024 analysis of immigration and wage pressures
- Minneapolis Fed: Immigration and Employment Growth - 2025 employment analysis
Image Credit
- Photo by Alexander Mils on Unsplash