Blue-Collar Wages Rise as Illegal Immigration Declines

Scott Bessent talked about blue-collar wage growth during his appearance on Pod Force One with Miranda Devine.

| Published June 23, 2025

New data from the U.S. Treasury Department shows that inflation-adjusted wages for blue-collar workers—defined as production and nonsupervisory employees—have risen by 1.7% from December 2024 to May 2025. This increase, touted by Treasury Secretary Scott Bessent as the strongest real wage growth in any administration’s initial five months since 1969, is being linked by the Trump administration to falling inflation and reduced illegal immigration .

🔍 Administration’s View: The “Blue-Collar Boom”

According to Bessent, the combination of cooling inflation (“prices rose just 0.9%”) and lower labor supply due to less illegal immigration has lifted take-home pay for working-class Americans. Counselor Joseph Lavorgna adds that previous fears over tariffs fueling inflation have not materialized, making the wage gains more significant.

🌐 Immigration’s Role in Wage Growth

Analysis from The Washington Stand and The Daily Signal highlights that around 773,000 undocumented immigrants have recently exited the labor market, partly due to stricter enforcement. According to labor economics research cited, this departure is forcing businesses to raise wages to fill roles in sectors like construction, agriculture, and food service.

⚠️ Wider Context and Caveats

• Historical precedents: While notable, this real wage growth is not unprecedented—similar or higher gains occurred under Trump’s first term and during Nixon’s presidency.

• Economic trade-offs: Other outlets warn that reducing immigrant labor too sharply could spark labor shortages, particularly in sectors like agriculture and manufacturing .

• Mixed academic findings: Research on immigration’s impact on native wages shows mixed results—while some groups benefit, others may experience broader economic disruptions from aggressive enforcement strategies

⚖️ Upsides and Downsides

Upsides:

• Real Wage Growth: Inflation-adjusted earnings for blue-collar workers are rising, offering tangible relief to working-class families after years of wage stagnation.

• Reduced Inflation Pressure: Prices have stabilized, with inflation under 1%, allowing wage gains to translate into greater purchasing power.

• Tighter Labor Market: With fewer undocumented workers competing for jobs, employers are raising pay to attract legal U.S. workers—especially in manual labor sectors.

Downsides:

• Labor Shortages: Key industries like agriculture, meatpacking, and construction face increasing difficulty filling positions, risking supply chain delays or cost spikes.

• Economic Trade-offs: Sudden shifts in labor supply can create instability, especially in rural economies that rely on seasonal or low-skill migrant labor.

• Policy Sustainability: Analysts warn that while wage bumps are politically popular, they may not be sustainable without broader reforms in labor mobility, immigration, and workforce training.

 Bottom Line:

The rise in blue-collar wages marks a clear win for American workers—but it comes with economic trade-offs that policymakers cannot ignore. As illegal immigration declines and labor markets tighten, the challenge now is balancing wage growth with workforce stability. Whether this trend becomes a lasting boost or a short-term spike will depend on how the next phase of immigration, economic, and labor policy is managed.

SOURCES: DAILY SIGNAL – Blue-Collar Wages Rise as Illegal Immigration Declines

THE NEW YORK POST – Blue-collar wage growth under Trump sees largest increase in nearly 60 years, Treasury sec reveals on Pod Force One

THE WASHINGTON STAND – Analysis: Blue-Collar Wages Rise as Illegal Immigration Declines