Letter to the editor on wages and immigration published in the Washington Times on May 11, 2006

Wages and immigration

There is no disputing that our nation's immigration system is in serious need of repair. However, in his Monday Commentary column, "Immigrants and wages," Alan Tonelson would have us believe that waiving a magic wand and raising minimum wage rates would fix the broken immigration system. Wrong. What we really must focus on is the fundamental problem at hand, which is only going to grow in the years to come: a shortage of workers.

Mr. Tonelson uses numbers convenient to his case to suggest that immigration has caused wage stagnation in certain industries. I say "convenient" because he offers the five-year time frame from 2000 to 2005. It should not be surprising that wages took a hit from the boom year of 2000 through the recession and the post-September 11 shock — particularly to the travel and tourism sector, to the recovery we are enjoying today. Add to that the annual increases in health insurance costs that have pushed health-care reform to the top of thebusinesslegislative agenda, and you get a fairer picture of labor costs. National Restaurant Association research has shown that restaurant operators have faced double-digit annual increases in health insurance costs during the past five years.

The fact is, we are facing a tight labor market — today's 4.7 percent unemployment rate is under the 5.0 percent rate traditionally considered to be the mark of a full-employment economy — and the future labor supply will only get tighter. The National Restaurant Association, the nation's largest private-sector employer, with 12.5 million employees, projects that the number of jobs in the industry will grow 15 percent by the year 2016. The Department of Labor projects that within that time frame, the overall labor force will grow just 10 percent. The 16-to 24-year-old age group, which makes up 50 percent of our industry's work force, is not expected to increase.

The restaurant industry is outperforming the overall economy in terms of wage growth, according to data from the Bureau of Labor Statistics. In the 12 months ending March 2006, real wages at food services and drinking-place establishments increased at a 1.8 percent rate, while private-sector establishment rates remained flat.

Mr. Tonelson's employer, the U.S. Business and Industry Council (USBIC), is a collection of U.S. manufacturing companies that usually focuses on keeping products from abroad out of the United States. It appears that now it wishes to keep people from abroad out of the United States.

Mr. Tonelson's advice to the labor-intensive service sector to "invest in developing new labor-saving technologies" is not surprising, but perhaps it should be redirected to manufacturers. Will developing machines really decrease the amount of labor needed to bus tables and clean hotel rooms, let alone care for our children and the elderly?

Immigration reform has no simple solution. We must focus on fixing the problem through common-sense, comprehensive reform instead of quick fixes that could compromise both our nation's security and economy.

STEVEN ANDERSON
President and CEO
National Restaurant Association