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Consider the events that are developing in the US with regards to labor-intensive manual work and migrant workers. If more and more migrant workers are banished from the work pool, it remains a highly contested topic as to whether US nationals will able to pick up the slack. Let's say we're presented with both sides of the argument:

(These are of course generalizations to a certain extent, and I don't pretend to speak for everybody; I'm just simply trying to highlight some of the major concerns of both sides of the aisle)

Liberal: "Rethink your judgment on migrant workers. Americans are too soft for dirty jobs. Why else would so many unemployed people turn down the opportunity to work during a recession?"

Conservative: "It's not that we're too soft to work, it's just that the current labor market has a systemic bias against us. Why should we work for wages that are not fair?"

Liberal Americans put forth a compelling case that migrant workers are not stealing jobs from anybody, they are simply filling the jobs that Americans don't want to do. While in the past, Americans worked in labor-intensive industries like steel and manufacturing, but today's technologically-integrated America is different. Essentially, saying Americans are too soft for dirty jobs. Recent agriculture labor shortages in California illustrate a point along these lines.

Meanwhile, the conservatives also have a strong case that migrant workers are competitors for low-skilled US nationals. The low-skilled demographic are often considered the losers of globalization, as they are out-competed by migrant workers who will work harder on the job for less pay. Conservatives also cite net income flows from local communities. Many migrant workers send the bulk of their earnings back to their home countries, and at the macro level, it all adds up, their local communities lose economic vigor and deteriorate.

My question is: Is there anything in theoretical/empirical economics that can be brought to bear for this debate?

That is my question, although I realize some readers may find it rather broad, so I've included a few optional specific questions that you may answer if you feel so inclined.

  • Are there moral hazards in place? i.e. People would rather rely on welfare than work in an orchard?
  • Is it a case of too much/too little regulation? i.e. Due to burdensome regulations, it's too expensive to hire legit workers, and the cheap but illegal migrant worker is preferred?
  • If there is a "fair" equilibrium price that attracts local Americans, will that even be affordable to agriculture / other relevant industry companies? Might they not just mechanize?

Note: If possible, please do your best to criticize both views in the answer, so that political affiliation bias will be weeded out a bit and it also will not make it appear as though one is "better" than the other.

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There is a broad literature that attempts to address the very question you pose- what is the impact of immigration (legal and illegal) on native wages? However, if you're interested in the 'real world' evidence, I'd suggest focusing on empirical labor economics as opposed to more theoretical labor models.

The reason for my suggestion is that theoretical economics makes no clear prediction without a lot more information. There are a variety of factors, such as the production function being considered, the labor market conditions observed, the relative substitutability of immigrant and native workers, etc. which tends to make answering the question more of an empirical exercise.

As far as the findings of the empirical papers, they actually tend to find relatively little impact of immigrant labor on native wages, with a few notable exceptions.

For some examples:

This survey paper, though a bit out of date as it's from 2005 outlines the results of 18 papers and finds wide discrepancies depending on modeling techniques and underlying assumptions used.

Borjas, 2003 is one of the better known works, and finds what one might expect based on Econ101 models- that an increase in immigrant labor supply leads to a decrease in wages for native workers.

A couple very well known articles have tried to tease out the impact of immigration on wages by focusing on particular events (called supply shocks) where the number of immigrants increased "suddenly" for reasons having nothing to do with the economic climate at the time. A pair of papers examined the impact of the Mariel Boatlift, which led to a spike in Cuban immigrants in Miami: The first, a paper by Card 1990 found no evidence of a negative impact of immigration on wages, while Borjas 2015 finds a substantial decrease in the wages for the least educated Miami residents.

Several other papers have found either no negative effect, or even positive effects, of immigrants on various worker wages. For example, this paper by Peri in 2011 finds no negative impact of immigrants on wages, but a strongly positive impact of immigrants on productivity. This paper from 2013 finds significant positive impacts of undocumented immigrants on the wages of native workers in Georgia.

Ultimately, the exercise of determining the impact of immigrants on wages really depends on the method of analysis and a number of underlying parameters, and applying "standard" (i.e. Principles of Micro) models can lead to erroneous results and a false sense of certainty.

If there's anything else in particular you're interested in, let me know and I'll try to improve the answer!

EDIT: Sorry, I forgot to include a link to this additional survey paper in the original answer!

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  • $\begingroup$ Great leads, thanks for your input. While exploring the papers you referenced I also came across the "Lump of Labor Fallacy". I'd also be curious to see your take on that. The premise is that having large amounts of labor supply don't necessarily result in low wages (contrary to the simple supply/demand labor model). $\endgroup$ – Arash Howaida Jun 5 '17 at 5:20

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