George Borjas on the New Immigration Meme
George Borjas, perhaps the US’ pre-eminent immigration economist notes:
Maybe it’s just me because I instinctively read in between the lines whenever I read anything about immigration, but I’m beginning to detect such a seismic shift in the immigration debate. We all know the party line by now: Immigrants do jobs that natives don’t want to do. As a result, natives do not lose jobs, and natives do not see their wages reduced. And anyone who claims otherwise is obviously a racist xenophobic moron. They obviously don’t like immigrants, and they obviously are not educated/credentialed enough to understand and appreciate expert opinion.
The flurry of immigration restrictions proposed by the Trump administration demands a switch in tactics–with a corresponding switch in the argument linking immigration and wages. The party line must now be that less immigration is bad. But how can one show that in simple-to-grasp economic terms that can be mass-marketed to the masses? By far the simplest way is to come up with examples that less immigration raises labor costs and makes us miserable because everything becomes more expensive.
Borjas goes on:
There is no upper bound to the hypocrisy of experts. It might be a lot of fun to keep track of this over the next few years, watching the dominos fall and all those “immigration-does-not-affect-wages” experts fall all over themselves as they switch to proving the economic awfulness of Trump’s actions because fewer immigrants mean higher labor costs, higher prices, more inflation.
But don’t hold your breath for any admission that they were wrong in the past. They will instantly switch to the former party line the minute the Trump immigration restrictions fade into history.
I have nothing to add.
Ah heck, I do have something to add….
About a month or two ago the NY Times had an article about how illegal immigrants from Mexico who left the US due to Trump’s rhetoric were depressing wages in Mexico. That after years of supposedly having no effect on wages in this country. Very odd….
“less immigration is bad”
Matches how the vast majority of your links lead nowhere.
And it matches the math disability that seems to show up in certain kinds of posts.
“That being the case, why bother playing Hamlet about the effect of illegal immigration on the wages of low-skilled natives? Especially since it’s a red herring anyway: the effect of undocumented immigrants on the wages of low-skilled native workers is vanishingly small. Beinart repeatedly mentions the findings of a National Academies of Sciences report on immigration and the economy, but never mentions the precise number it comes up with: for low-skilled native workers, an average of all studies suggests that an influx of a million immigrants would lower wages about 0.4 percent. That’s $8 per month.1
The same is true for state and local spending. The NAS report estimates that new immigrants cost states a net of about $1,600 per year.2 This means that an influx of a million immigrants would create a net burden of $1.6 billion. That’s less than one-tenth of one percent of all state and local spending. It’s a rounding error.
These numbers are tiny, and are used mostly as intellectual cover by opponents of illegal immigration. They are not even remotely the reason for opposition to comprehensive immigration reform, which comes mostly from educated native whites whose wages and taxes aren’t impacted more than a hair by illegal immigration. The real reason is almost purely cultural: dislike of non-English speakers, an inchoate fear of crime, and a vague sense that white America is fading away. But hardly anyone wants to admit that these are the real terms of the argument.
Quite a bit of new research has been done over the past decade, and the result has been, if anything, a reduction in the perceived economic effects of illegal immigration. The wage effects are limited and tiny. The fiscal effects are even tinier, and become zero over the long run. Given that, it’s hardly a surprise that supporters of comprehensive immigration reform no longer give economic arguments much attention.3”
I do not know many people outside of Breitbart World that considers Borjas anything but a right wing hack.
I fixed the link but tend to agree on this op ed with EMichael.
Hm…. it seems like Borjas gets a bad rap from at least a few people. Any comments on http://www.bradford-delong.com/2017/05/should-read-yes-the-invariable-rule-is-that-results-george-borjas-reports-on-immigration-should-be-handled-with-tongs-a.html
11 million people are not an insignificant share of a population of 320 million. It has to affect the labor market.
Its been noted before by many people that the Marielitos Boat Lift makes for a very poor natural experiment in terms of the effect of the Miami labor market since its effect was small relative to the big thing that was happening in Miami at the time. This is a magnitude error, but the opposite of the one being made by Dan. The influx of 125,000 people was a tiny thing relative to the massive inflow of cocaine and cocaine money that completely remade Miami’s skyline.
I believe the most popular tv show at the time was about that: Miami Vice. And there were movies about how some of the Marielitos came to be employed in that trade (think Scarface).
Hello Chetan…I see Longtooth had a long comment.
Consider an an analogy. Say you found research note by that penicillin did not save lives and the evidence was the massive increase in death rates observed between 1939 to 1945, shortly after penicillin was discovered and during which period the drug started to be mass produced. What would you think of said research if it failed to account for, say, WWII?
“11 million people are not an insignificant share of a population of 320 million. It has to affect the labor market.”
Another straw man.
No one said it did not have an effect. The brightest minds say it is insignificant.
There are about 140,000 H2A visas out of about 200,000 seasonal farm workers.
If there were no seasonal migrant farmworkers, we’d go back to the system we had before, consume youth work on farms, which for many years was “free” labor because farming in prior eras was comparatively small (versus ranching or current farming, even “family farms” today are significantly larger, with much lower labor consumption overall).
The demand for migrant seasonal labor in agriculture is driven by the changes in the structure of farming over the last 60 years.
By comparison, in the 1930s there were about a million displaced people from Eastern Colorado, Western Kansas, and the panhandles who went to California as migrant labor.
Hard to compare.
I don’t know enough about any of those situations to make a reasonable comparison, but I know enough to know I don’t know. I also know 140k summer jobs changing from migrant to domestic consumed labor probably isn’t enough to move the needle when the impact of doubling labor cost would be 20 cents on an in-season domestically produced box of strawberries.
Thanks for the link.
What happens to the hacks who favor studies over real world data?
I’ll only note the following statement by Jorge Bjoras:
“Here’s the problem with the current immigration debate: Neither side is revealing the whole picture. Trump might cite my work, but he overlooks my findings that the influx of immigrants can potentially be a net good for the nation, increasing the total wealth of the population.”
And then he says:
” Wage trends over the past half-century suggest that a 10 percent increase in the number of workers with a particular set of skills probably lowers the wage of that group by at least 3 percent. Even after the economy has fully adjusted, those skill groups that received the most immigrants will still offer lower pay relative to those that received fewer immigrants.”
Ref: Same link as above.
Conflating immigrants with wages rates has been the dominant theme of the right wing since at least William F. Buckley Jr.’s National Review several decades ago already.
The argument always goes like Bjoras made it:
A. increasing labor relative to demand depresses labor wages
B immigrants increase labor relative to demand .
C.therefore immigrants depress labor wages.
The problem with this spiel is with B) and should be obvious:
There’s no data or reason to believe nor has there ever been reason to believe immigrants increase labor relative to demand any more than people retiring decrease labor relative to demand or that kids entering the workforce increase labor relative to demand.
And since when males impregnate females at an increasing rate and explode the future influx of labor then we should blame the males for their inflated libido, or the females from succumbing for the increase in labor relative to demand and hence depression of labor wages. Therefore the problem can be deemed a failure to follow Catholic doctrine to use the rhythm system or not have sex unless it was the express purpose of creating more people or a failure of females to use more birth control I suppose
So Jorge Bjoras decides to pick out immigrants as a basis for increasing labor supply relative to demand. Why is that?.
Here’s another couple of example:
Example # 1:
During the Dust Bowl, 10’s of thousands of “Okies” moved West to CA, and Oregon to find work… the vast majority i the agricultural fields in central CA. The “Okies” increased the supply of labor relative to demand and depressed farm labor wages. Perhaps we should have made sure the “Okies” couldn’t migrate to find work elsewhere I suppose. In real terms CA farmers loved the Okies (because they underbid the existing labor supply and the farm laborers hated them.
During WWII and from ~ 1940 onwards, the western states farm labor supplies plummeted as the males joined the military and later the Japanese were interred. Meanwhile demand for foods increased dramatically to feed England and the troops. Farm labor prices sored of course, increasing agricultural prices and reducing food supply. The US population screamed and the US gov’t realized something had to be done to maintain support for the war effort. Solution bring in Mexican labor to work the western US fields… a specific effort to increase the labor supply relative to demand for it and drive down labor prices again. The Mexican’s were the only available source for a large influx of field workers to drive down labor wages to keep the supply of foods high and depress food prices to keep the US population from being forced to employ food coupons…. even though in some cases they still did.
So we blame immigrants for increasing the labor supply… even when we want to depress wage labor prices, and we blame labor unions when we want to blame somebody for increasing labor wages.
But we don’t blame the “Okies” for increasing the labor supply over demand for it and thus depressing labor prices, yet we blame immigrants for doing the same thing. What’s up with that?
We also don’t blame capital owners for moving production out of the US to use lower wage labor somewhere else (which is another way of increasing labor supply relative to demand in fact), and thus reducing labor wages. But Jorge Borjas decides immigrants should be blamed.
This is also known as xenophobia, folks.
Here’s an idea …
Since immigrants increase the labor supply relative to demand for it and thus depress labor wages, let’s just define immigrants as those people who entered the US as residents AFTER 1776. If you can show by documented evidence that your forefathers were residents of the US prior to 1776 you can carry a card that gives you a job before any other person who can show this evidence. That would solve the immigration issue as far as depressing wages are concerned, wouldn’t it?
Wages for immigrants prior to 1776 would sore. I mean when and what condition defines an immigrant from a non-immigrant in the US?
Seems to me this is what the national socialists did with their Aryan ancestry papers.
A few years ago I got bids to paint my apartment. The firm using “union painters” bid $2,000. The other bid $400. Guess which I went with? When they showed up none spoke a bit of English, and I didn’t ask any questions. They did a great job. Anyone who thinks that illegal immigrants don’t have any effect on this particular sector is in willful denial.
I don’t think there is much of a racial/xenophobia effect here. It’s dollars and cents, supply and demand. If anything, the preference in hiring illegal immigrants at cheaper rates than white citizens is anti-xenophobic.
Sammy, it’s always dollars and sense… under the cover of xenophobia and racism (since those aren’t politically correct means of getting rid of the non-whites).
Sammy, sorry… I meant the reverse…. it’s always about xenophobia and racism under the cover of dollars and cents. As I said and showed in my responses above… if it’s not about xenophobia and racism, then why pick on immigrants as the dollars and cents problem?
It is not direct discrimination. Think Lee Atwell . . .
You gotta love the “union painters” thing.
After this post, yesterday and today I am seeing articles about youth labor participation. It’s part of the story.
Conservatives like it both ways… or so they say:
1. They oppose labor unions because they increase labor wages.
2. The opppose immigration because (they say) it decreases labor wages.
But at the same time:
1. They favor importing lower wage labor (immigrants).
2. They favor exporting labor to lower wage nations.
The reality is that conservatives prefer paying labor as little as possible to maximize capital profits, but since that means immigration serves their own best profit interests at the same time they say it displaces domestic labor. But if they say they prefer low wage immigrant labor, then they by definition also prefer displacing domestic labor.
But if they tell domestic labor that this is their preference, they lose domestic labor’s votes, so they can’t tell the public what they actually prefer. Thus in order to maintain domestic labor votes they have to cater to the xeophobes and racits emotions to “say” they oppose immigration even though the capital owners actually don’t.
So figure this out:
Trump says he wants to build a wall to keep Mexican & Central American immigrant labor out of the US. If he does then it decreases labor supply relative to demand and thus increases labor wages.
This is what Trump says he wants to do. But if that occurs then capital owners will either have to reduce their profits or raise prices. If they reduce profits, tax revenues (state and federal) decline which reduces public benefits, or forces gov’ts to increase taxes..So gov’t will prefer capital owners raise prices instead of reducing profits. If prices are raised then wage labor loses their gains in wage increases so that in real terms domestic labor wages remain the same.
More than that, by restricitng Mexican & Central American immigrant labor demand for goods and servicers drop and the so does production, and with reductions in production then domestic demand for labor drops, increasing domestic labor supply relative to demand, reducing labor wages in real terms again.
Thus there is no gain and only losses for domestic wage labor and potentiallly even a reduction in capital owner profits. Furthermore with the reduction in demand for goods and services there’s also a reduction in GDP and thus tax revenues, so in addition to wage labor losses from employment there’s also a reduction in gov’t benefits. This always puts pressure on gov’t to raise taxes and taxes will rise more for capital owners than wage labor so capital owners naturally then must oppose that increased pressure on gov’t to maintain benefits
Thus as near as I can figure, the only gain is the emotional satisfaction of xenophobes and racists (white supremacists) in maintaining a white donor class controlled society under the pretense that it will improve domestic labor’s real wages and benefits. The conservatives have very effective propaganda machine. I’m not sure how this can get effectively countered. .