Borjas on Immigration in 1996
George Borjas is out with a new book on immigration. It’s title, “We Wanted Workers” comes from a comment by a Swiss playwright which translates roughly as “we wanted workers but we got people instead.”
I am swamped and haven’t gotten to Borjas’ book yet (truth to tell – there is a lot of stuff higher on my current to do list and time is limited) but he has been pretty consistent for a long time. Here is a lengthy article he wrote for The Atlantic in 1996. This piece may be a good summary of what Borjas keeps noting, and which seems self-evident to me given current immigration policy in the US:
Economic research teaches a very valuable lesson: the economic impact of immigration is essentially distributional. Current immigration redistributes wealth from unskilled workers, whose wages are lowered by immigrants, to skilled workers and owners of companies that buy immigrants’ services, and from taxpayers who bear the burden of paying for the social services used by immigrants to consumers who use the goods and services produced by immigrants.
There is nothing wrong with taking the position that current policies should be continued and even expanded. There is something wrong with denying what that implies. Policies are something we as a country pick. They aren’t handed down from the heavens or etched in stone. If we choose to favor low skilled immigrants and the businesses that employ them over the taxpayer and low skilled workers already in the country, let us at least be honest about it.
Full disclosure – I have structured my affairs so that in general, I benefit from the policies that have been in place over the last few decades. I recognize that many Americans don’t have that option.
In the absence of collective bargaining — which sets the price of labor by the max the ultimate consumer will give rather than the minimum the most weakly placed to bargain (not at all really) employee will take — low skilled immigration crashes the wages of the most vulnerable American workers, namely our low skilled employees (that’s me; not-willing-to-work-for-$400/wk-me) …
… in the absence of collective bargaining (and centralized bargaining).
Thank you Beverly. Your best post ever, particularly the conclusion which calls Kimmel out for his “economic analysis”. Which by the way is crap at least in this country. Bottom line is unskilled immigrants do not take jobs from unskilled natives because the jobs would otherwise leave the country, immigrants pay taxes too and by definition regardless of skills immigrants are the most motivated workers. Still Kimmel and the other white supremacists need scapegoats for their own shortcomings and what better way to do it then scientifically prove that immigrants are economically bad for them. It is the same thing as Trump bringing back high paying manufacturing jobs through tough trade negotiations when in truth the high end manufacturing jobs have been lost to technology. I empathize with older, lower skilled workers of all colors and ethnicities and think the so called “makers” should do more to make their lives more comfortable, but to blame other lower skilled workers, particularly ” foreigners” is wrong and will only make their lives worse under any and all circumstances
Terry,
1. Take a Hispanic Jew who is citing another Hispanic. The second Hidpanic is not Jewish but he is an immigrant. The two Hispanics are pointing out a policy that screws over poor and unskilled people in this country (which includes a disproportionate number of Black people) and largely benefits people with deep pockets, which in this country are mostly white. Now, someone comes along and calls the Hispanic Jew in this story a white supremacist. Disassociate yourself from this story to the best of your abilities and ask yourself whether something is wrong with your reasoning skills. You might learn to function more effectively in society.
2. My last name has only one m. If you are going to slander me with the white supremacist bit, at least be clear about who you are slandering.
Mike
it is also possible that it is your writing skills and not Terry’s reasoning skills that are at fault if people are not understanding what you are saying.
there may be some truth to the thought that immigration “steals” low skill jobs from American workers (though they also steal high skill jobs from what i have heard) but this has nothing to do with the race of the immigrants.
it is in the nature of capitalism for bosses to keep wages as low as they can. a surplus of workers will help them do that. but i think that america’s current immigration policy has more to do with empire than micro-economics.
there was a time when i think you could understand this, or understand the effect of immigration on the welfare of american workers better than i do. but your recent posts are infected with racist-thought (see Beverly’s comment this post) whether you know it or not, bad statistics, and “logic” that simply does not convince.
i don’t expect you to agree with me. and i am sorry if you take this as a personal attack: it’s not meant to be. but at some point if you are not being understood or not making your case, you need to re-think the way you are presenting it, or whether the case is even valid in the first place.
coberly:
On this board, Bev is NOT a statistician or for that matter a numbers person. She would be orchestrating someone else if anything.Mike is a numbers guy who is basically stating the stats “point in this direction.” If this is not true, than you have to quote another study or present your own data to disprove him. I did cite someone who left Heritage for obvious reasons.
Coberly,
Any policy has winners and losers. With immigration as currently structured, winners are mostly a specific group of poor and unskilled people that get the right to emigrate to this country.
Losers are the poor and unskilled here in the US who now face more competition for their jobs and more competition for the politically limited government assistance.
I think charity begins at home. I think we as a country should have one hell of a good reason before we favor the aspiring immigrant in Calcutta or Guatemala over the resident of Detroit or Mississippi who is competing for the same job. I am not quite sure why everyone is so sure that makes me a card carrying member of the Nazi Party though.
Terry,
Low skilled taxi driving, fast food, mean butchering, etc., are not leaving this country. Only way to keep them for natives first is collective bargaining (including centralized bargaining). Consumers will pay the same — Americans will be hired first. The economy will expand because of new comers and thereby absorb them, though they may be a little lower on the employment totem poll at first because of English language skills, etc.
45% of US workers earn 10% of overall income. By definition their jobs have not been outsourced (“insourced” maybe, like my taxi job).
Mike
maybe because the case you have been making here is all about race and not about jobs.
you have mentioned jobs once or twice, but not made a case.
other than referring to “true sterotypes” and un punctual Brazillians, and differences in IQ or work habits across “cultures.”
Coberly,
If a culture doesn’t prepare its people to function in the US or Denmark, it doesn’t mean the people from the country are inferior. Or stupid.
I noted that Visigoths weren’t a good fit for Rome. I noted they eventually sacked Rome. I never said they were inferior or stupid but hell yes, it was a bad idea for Valens to let them into the Roman Empire.
Dennis Drew,
I don’t think collective bargaining is enough if there is a sufficient number of individuals who can do the job. The immigration policy many around here promote will continue to ensure poverty wages for those who must compete with the new immigrants. Anything but poverty all around = white supremacism.
Mike,
I think the necessary concomitant to high union density is centralized bargaining. Walmart pulled 88 big boxes out of Germany where — whatever the reason for leaving — Walmart had to pay the same wages and benefits as everyone else.
Do this across continental Europe, in French Canada, I believe even in Argentina and Indonesia. Not that it has to be other places to be tried here — helps it get past human inertia or something. In 1966 (I think) Jimmy Hoffa reached his crowning achievement: the National Master Freight Agreement — same pay for all truckers across the whole country.
Of course the Teamsters will alter it to keep someone in business and themselves in jobs. Hoffa said: “A union is a business; no crying towels, no bleeding hearts (or something like that). Better for job seekers to move from SC to IL or WA then for jobs to move from IL or WA to SC.
Usually centralized bargaining (a.k.a., sector-wide labor agreements) includes employees in the same geographic locale — e.g., local big boxes and supermarkets.
Airline and supermarket employees would kill for centralized bargaining. If only some smart progressive politician would propose something for them to at least vote for. Never hear the word “union” (that’s union) from Warren or Bernie — all live in the same rarefied atmosphere as O and Hill in some way. ??? WHY DONALD GOT ELECTED!
Mike
acutually the story was a little more complicated than that. for example:
“What followed was a disaster from which the Roman empire would never recover. Valens permitted the Visigoths to settle in the Danubian provinces in their hundreds of thousands.
This introduced a barbarian nation into the territory of the empire. Had the Danube provided a protective bulwark against the barbarians for centuries, then now the barbarians suddenly were within.
More so, the new settlers were treated deplorably by their Roman governors. They were desperately exploited and forced to live in cramped starvation conditions. It was no wonder that they rebelled”
mike, we’ve been over and over this ground. we are not getting any closer to agreement.
Mike
your logic?:
“a culture doesn’t prepare it’s people to function in the United States”
“they come here and take our jobs”
“they take the low skilled jobs”
why doesn’t our culture prepare our people to take the high skilled jobs?
Coberly,
Not everyone wants to spend 4 years in college plus other prep to become and maintain CPA certification. There is nothing dishonorable about being an HVAC repairman (call me sexist but I have never met an HVAC repair woman) or a plumber or barber. There should be good jobs for blue collar workers in this country.
But there is a mirror image to your question. Why the US, commonwealth countries, and Western Europe? (I would add Japan but good luck getting in?). Why aren’t other countries producing these job opportunities too?
Another mirror image question. Heck, whenever people threaten people threaten to leave this country for another (the latest spate was during the election), they threaten to go to Canada and not Mexico. Isn’t that racist too? (I lived in South America for almost a third of my life. It isn’t an insane concept. Latin Americans don’t bite.)
well, Mike
call me racist, but I think they talk English in Canada.
and more money than Mexico
and a more people friendly political system.
other than that I can’t see much wrong with your last comment, but I can’t figure out how it fits in with the rest of your comments and posts.
Run 74451
two universties did me the honor of allowing me to teach their basic statistics class. we put a lot of emphasis on recognizing bad use of statistics.
it was a long time ago, and I don’t remember much, but like the Supreme Court, I know it when I see it.
coberly:
Multiple companies cited me as helping them resolve their Cost of Manufacturing issues using stats and throughput analysis paying roughly $200-300/hour to have myself and others there. So what to both? Coberly, Mike has not made a conclusion yet and it presentation is not basic stats (although he may disagree with me). Your, observation or “I sez its wrong” without something to back it up is just you stating an opinion.
I cited something similar to where Mike might be going at written by Jason Richwine. Just a comment on Huffington about the study.
“‘Superior performance on basic economic indicators is to be expected from later generations, who go to American schools, learn English, and become better acquainted with the culture,’ he wrote. ‘Despite built-in advantages, too many Hispanic natives are not adhering to standards of behavior that separate middle and working class neighborhoods from the barrio.’” http://www.huffingtonpost.com/2013/05/10/jason-richwine-resigns-heritage-foundation_n_3254927.html
Beyond the Huffington article announcing Jason’s resignation from Heritage, why not look the rest of it up. I ran across it while reading about student loans and picking a fight with Jason Delisle and Beth Akers with Alan Collinge.
well, i’m sorry i took the bait on that one. my credentials as a statistics expert are neither great nor relevant. and i certainly am not going to waste my time looking for “real” experts to cite.
one problem with the latter is that it is really hard to tell just what Mike is trying to say. The logic doesn’t add up. If I can’t make that obvious just by pointing at it, I need to learn to write better. Pointing at someone else who hasn’t tried to read Mike’s “case” (just what is it exactly?) is not going to help.
i already know i am not going to change your mind
and you are not going to change mine
and it won’t matter to anyone anyway.
run
not “just” my opinion. if i point out the logical problem and you can’t see it, it’s not going to be resolved by my citing some expert who hasn’t even read Mike’s argument.
i am sure your statistics was well applied to the problem at hand. Mike’s is not. Just as I am sure that Mikes current knowledge of statistical algorithms is undoubtedly better than mine, but this does not mean he is using them in a way that means anything.
There are times when it makes sense to consult an expert. You might find an expert who will read Mike’s stuff and tell you why it does or does not make sense, but it is almost as easy to find “experts” who disagree with each other in statistics as it is in economics or politics.
i intend to drop the subject.
coberly:
Then you must cite how Mike is wrong. If you can not than your basis is supposition.
Coberly,
As you know, I never argue by appealing to authority so I will do it once. Borjas is one of the pre-eminent experts on the effect of immigration on labor. But you can easily find plenty of surveys if the literature. My findings (and those of Borjas) are pretty mainstream for labor and immigration economists. That doesn’t make it right. But this isn’t macro or finance. This is micro, and micro is the closest thing to a science you will find in Econ. Micro fits the facts very well. What I have been describing fits the known facts very well.
Mike
thank you for not appealing to authority.
now, can you summarize Borjas or mainstream in your own words without sounding like you are endorsing twentieth century racist science?
i think i can tell you what the effect will be of telling a whole bunch of people they belong to a race that just isn’t smart enough to expect the good jobs.
then you might look up the platform of the Know Nothing Party around 1850 or so.
I would be the first to rejoice if this all turned out to be just a horrible misunderstanding.
Coberly,
I keep stating – being unprepared to function in the US or Denmark does not mean stupid. I like to think I am a smart guy but I can tell you that I am not, at present, well-prepared to function in the Islamic Republic of Iran. I can confidently state from experience, on the other hand, that I have no difficulty operating in Argentina or Brazil. Language, familiarity with the culture, no religious incompatibilities, etc., make a big difference. Heck, even knowing and liking the food makes a difference. It isn’t difficult to noodle this out. And I doubt that I am smarter walking the streets of Buenos Aires than I am if I were walking the streets in Teheran.
Now, I have never been in, much less worked in Angola or Mongolia. I imagine my ability to contributein Angola exceeds my ability to contribute in Mongolia.
Mike
nihil obstat
HUFFINGTON (I’m not sure what the argument is about but):
““When given the choice between a paycheck from a low-paying job and a welfare check, most intelligent people would realize that the welfare check offers them no potential for advancement. Low-IQ people do not internalize that fact nearly as well,” he wrote.”
IQs of ethnic groups rise over time. May have something to do with what I saw on a 60 Minutes segment. Australian aborigine children who did not go to school can look at 25 rocks on 25 squares for two minutes — throw the rocks in a pail; they can put them back on the right squares — if they did not go to school. Presumably if school costs them ability in one place (three dimensions) it adds someplace else (abstract thinking?).
Anyway we are back dealing with the assertion (the shibboleth) that it is the temptation of welfare that keeps families on the dole generation after generation. 100,000 out of maybe 200,000 gang age, Chicago males, not likely that tempted. One thing I can tell you from 15 years in New York’s badlands: every new generation, every new kid wants to grow up straight.
It’s the American dream, dog: flush toilet down the hall, AM radio, electric light in every room. And the year is 1916. In the year 2016, you are going to have to do a lot, LOT better than that to get American raised (spoiled?) employees into the job market.
Typical low skilled job in 2016 (in the US): $400/wk — won’t even pay the rent (outside or inside toilet).
THE MONEY IS THERE SOMEWHERE. Fed min wage $440 in 1968 — almost half a century and fully half the per capita income ago. Bottom 45% of workforce taking 10% of overall income — top 1% taking 20% (up from 10%). THE MONEY IS THERE SOMEWHERE.
Rebuilding labor union density STATE BY PROGRESSIVE STATE much faster path to at least $15 everywhere, more like $20 — instead of the five year creep to $13.50 (after inflation) here and very far there. Much faster ridding of just-in-time scheduling, etc. IF IT’S THERE — if the ultimate consumer of labor, the customer will pay it) labor unions can get it all now — right now!
Ask Jimmy Hoffa.
Run
I cited in some detail how Mike is wrong, here and in a letter to Dan he said he would publish. I have not seen it. And I have not seen any replies from Mike or anyone that actually addressed what I thought was wrong.
coberly
Ok, I will wait on Dan. Thank you.
Mike
I read the executive summary to one of Borjas articles. I have no reason to suppose he makes any mistakes of fact regarding either theory or empirical evidence.
I do have reason to have doubts about his policy recommendations.
And I most definitely have reason to doubt any connection between your posts at AB and Borjas’ arguments.
I will state, without citation to any “experts,” whom I am not able to persuade to read your posts, that the “logic” (in quotes because I of all people have no reason to claim that my logic is he same as Cosmic Truth) in your posts and comments has been extremely hard to follow.
For Run’s benefit I will re-mention a couple of places:
hard to take seriously a professional article that finds — against all odds — a significant correlation between what people think and what they read in the newspaper, while you seem to think that this proves that people’s stereotypes about immigrants are true.
second, hard to take your logic that some cultures do not prepare their people to thrive in America, yet they come here and take away our jobs. but only, as Borjas says, the low paid jobs, which causes me to wonder why our culture does not prepare our people to thrive in America.
And I guess, third, when a person has an argument to make, it is generally considered better to state the argument in summary near the beginning than to keep promising that you will make all things clear in a future article. I still do not know what your argument actually is, but it looks to me a lot like the “scientific racism” i thought we were done with forty years ago.
I really don’t want to write about this any more.
Denis
I think you are right. I think Borjas theory assumes the ability of employers to keep wages at the lowest level they can find some workers to take. And certainly present policy in America does nothing to go against that mainstream theory.
What the outcome would be with good unions I can’t say, but certainly we ought to try it.