Economy, jobs and year 2008

The housing correction is causing companies across the entire economy to reconsider projections for the next year. If indeed the economy goes into recession or at least slows down as it has already done this quarter, the possibility of wage appreciation is zero. The entire argument that foreign labor depresses wages becomes irrelevant if the economy falters, as there will be mass layoffs and possible wage decreases for newly hired positions even without any immigration. The effect of immigration numbers on wages is really minuscule compared to the overall health of the economy, assuming we believe that such a thing does happen. Far more consequential is what would happen to competitiveness, productivity, innovation and jobs if protectionist laws are implemented during times of economic slowdown. Next year will be interesting.