Immigration: more evidence in its favor
I reviewed a lot of the studies of the economic effects of immigration in LBO several years ago: Economics of immigration. Bottom line: on balance, it’s quite good. Not popular these days, so it’s more important than ever to make the point.
Just in, a new study from the San Francisco Fed. Quoting from the abstract:
Statistical analysis of state-level data shows that immigrants expand the economy’s productive capacity by stimulating investment and promoting specialization. This produces efficiency gains and boosts income per worker. At the same time, evidence is scant that immigrants diminish the employment opportunities of U.S.-born workers.
It’s too bad that most of the yahoos whipping up a nativist frenzy aren’t much into empirical evidence. But there it is.
I’m not anti-immigrant at all, or even one who believes in the nation state, but these studies fly in the face of reality in much the same way that pro-free trade studies fly in the face of reality. They are hardly empirical, rather, they are based on simplistic-minded mathematical modeling dressed up with nice graphs.
Examine what has happened with meat-packing over the last two decades: a once high paying union job has become based on the super exploitation of immigrants, most of whom were forced here after NAFTA wiped out the Mexican rural sector. That’s a better expression of what Bloombergesque immigration policy has produced. Remembering that billionaires like Murdoch and Bloomberg are among the biggest boosters of what Washington calls immigration reform.
While there is truth in what you say about the Michael (“Who else will maintain our golf courses and fairways?”) Bloomberg attitude toward immigration, the fact is that wages in meatpacking had already collapsed by the time the composition of the workforce had changed. The automation, de-skilling and movement of the work out of the cities and into rural areas started in the 1960’s, and has accelerated since.
Think back to the Hormel strike of the mid-80’s: it occurred in the context of falling wages throughout the industry, but with a still “home-grown” labor force.
I think Michael is correct about meatpacking. The high paid workers had long been forced out of their jobs when immigrants were hired. As often happens companies restructure technically and geographically to get away from union labor. The unions are unable to respond effectively. Then the industry develops on the backs of cheap workers.
Hi Doug, don’t you think that the San Fran Fed report may be obscuring important class impacts by discussing the overall boon that immigration provides to the economy? Certainly an influx of less-educated workers competing with high school drop-outs and high school graduates may have a negative effect on wages while increasing output and growth generally. “Employment opportunities of US-born workers” doesn’t mention wage pressures for non-college educated workers. Picketty and Saez show that income has actually declined for the bottom 90% over the past 30 years.
One thing that Dean Baker recommends is increasing immigration quotas on highly educated immigrants–lawyers, doctors, professors, etc. to bring down bloated incomes of the professional class.
I think having an understanding of where resentment comes from (stagnating or declining incomes for most Americans with increasing competition and downward wage pressure in more menial work) is the first step to building a more inclusive left movement. Calling people with real grievances yahoos who can’t understand the empirical truths of Federal Reserve reports seems counterproductive to me.
I think the Borjas/Katz study he refers to may have been revised downwards, and this op-ed is a bit old, but it does show you that pro-immigration liberals like Krugman, right within the mainstream, have similar preoccupations about immigration:
Elsewhere, Krugman writes: “There’s a serious debate about the effect of immigration, but I’m generally more convinced by the argument that it does reduce wages of native-born workers — although it’s a huge wage increase for the immigrants.”