Economist Advocates Direct Wage Growth Policies Over Tariffs and Immigration Restrictions

Armand Domalewski, an economist and data scientist, recently highlighted that there are "much much much better" approaches to improving worker pay than through what he termed "weird bankshot theories about tariffs or immigration restrictions." Domalewski, who manages data and economics at Calbright College and is a co-host of the "Pie for Everybody" podcast, shared his perspective on social media, emphasizing a preference for direct economic interventions.

Domalewski's background includes studies in advanced macroeconomics, microeconomics, and econometrics from Santa Clara University, and he is actively involved in policy discussions, particularly through his work with YIMBY (Yes In My Backyard) groups. His statement reflects a common viewpoint among many economists who question the efficacy of protectionist trade policies and immigration curbs as primary tools for wage enhancement.

Economic analysis frequently points to more direct mechanisms for boosting worker compensation. These often include strengthening collective bargaining rights, increasing minimum wage standards, and investing significantly in education and vocational training programs to enhance the skills and productivity of the workforce. Additionally, policies promoting competition and addressing corporate concentration are considered vital for ensuring that productivity gains translate into higher wages.

Tariffs, while intended to protect domestic industries, are often criticized for their broader economic impact. Economists argue that tariffs can lead to increased costs for consumers through higher import prices, potentially reducing real wages. They can also trigger retaliatory measures from other nations, harming export-oriented sectors and overall economic stability, thus proving to be indirect and often inefficient at raising general worker pay.

Similarly, the economic effects of immigration restrictions on wages are complex and debated. While some proponents suggest that limiting labor supply could increase wages for native-born workers, many studies indicate that immigration typically has a modest or even slightly positive effect on average wages, especially for skilled labor. Restrictions can lead to labor shortages, hinder innovation, and curb economic growth, making them a less direct or effective strategy for widespread wage improvement.