Why Didn’t Immigration Make the List?

June 19th, 2011 at 9:41 pm

In an earlier post today, I listed the factors that I believe are most widely agreed to be behind the increase in wage and income inequality.  Here they are again:  Globalization, “labor-saving” technology, much diminished union power, declining minimum wages, “financialization” of growth, tax incentives favoring capital (though these numbers are all pretax, the incentives still play a role), and what Harold Meyerson the other day called shareholder vs. stakeholder capitalism.

You will note, perhaps to your dismay, that immigration is not on the list.  That’s not because I think it doesn’t matter.  It’s because its impact on the growth of inequality is small, maybe 5% according to one careful study by David Card, a very highly regarded researcher in this field.  That’s not nothing, but it’s probably a lot less than you thought.

How can this be?  In fact, there’s an important lesson here: start with supply and demand analysis, but don’t stop with it.

The intuition behind the notion that immigration explains the growth of wage inequality is that if immigration increases the relative supply of low-skilled workers without a commensurate increase in relative demand (employers suddenly need a bunch of new low-skilled workers), the pay of low wage workers will fall relative to that of high wage workers, i.e., increased inequality.

Makes sense.  Just like it makes sense that increases in the minimum wage will lead to widespread unemployment or that federal stimulus will crowd out private investment and lead to higher interest rates.  Yet evidence solidly tilts against these results too.  It’s actually what makes empirical economics interesting.  The dictates of supply and demand will often rule, except when they don’t.

So why doesn’t the simple model work in this case?

The answer, as Card and others have shown, is that, in the words of economics, immigrants and native born workers are “imperfect substitutes.” That means they don’t compete with each other in the job market as much as, say, immigrants compete with other immigrants and natives with natives.

According to this research, if you want to see immigrant competition driving down wages, don’t look at competition between immigrants and natives; look at competition between immigrants.  This study provides a pretty intuitive explanation of this finding and why it’s so important.

I don’t want to claim this is a slamdunk case.  There’s research that finds larger effects (pinning maybe as much as 20% of the increase in inequality on immigration; see the work of economist George Borjas).   But the Card findings are more widely accepted.

I know…they certainly aren’t intuitive and this is a very tough case to make.  A lot of people know jobs are getting harder to find, paychecks are shrinking, and there are more immigrants around, so they make the obvious supply/demand connection.  And yes, there are lots of native born Americans who know for a fact that they lost their job to an immigrant worker.

But that’s all the more reason to take a close look at this research.  The obvious answer doesn’t appear to be the right one here.

 

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26 comments in reply to "Why Didn’t Immigration Make the List?"

  1. Kevin Rica says:

    Jared,

    I asked and you gave it your best shot. It’s late and I have to earn my living tomorrow so I will just give you a pro forma answer.

    You said that we should look at the economic literature instead of direct observation and basic economic theory. That’s a direct violation of Occam’s razor!

    You KNOW that you can find anything you want in “the literature.” Let’s take what you said above: The intuition behind the notion that immigration explains the growth of wage inequality.. .. Makes sense. Just like it makes sense that increases in the minimum wage will lead to widespread unemployment”

    I remember a very well known and respected labor economist remarking that the people who argued that higher minimum wages would not significantly increase unemployment came up with one set of econometrically estimated labor elasticities (very inelastic) and the people who argued that immigration didn’t reduces wages came up with a very different set of econometrically estimated elasticities (very elastic). (I go with the first group.)

    I don’t have the time to read the latest version of his article tonite, but I’ve read an earlier version quite carefully and it wasn’t very good. I doubt much has changed. I haven’t read the latest recycled Card paper, though I was thoroughly unimpressed by his early efforts. These interregional models are a nice try but a waste of time. You just don’t have any idea of what the baseline wage differences would have been without immigration. In the 1950s California was growing like crazy: It was very prosperous and people from all over the U.S. migrated there. In the last few decades, the immigrant population soared and the native born left California. It’s fair to ask why they changed their minds: Did job opportunities and economic conditions deteriorate for them? This is a natural experiment and as Jan Kmenta said, “If we torture nature long enough, she will confess to anything.

    Card has created these models for a single purpose, armed and engined them for the same. I’m not surprised that they show what they show. But even if he has the best of intentions, the data that he has available is not the data that he needs. If you don’t have data on skill levels, you use education levels for a proxy. That is what is available, but it is useless. In fact, a quick glance at the paper’s summary reveals that he did reach one interesting conclusion: “workers with below high school education are perfect substitutes for those with a high school education.” Furthermore, he cannot distinguish between legal and illegal immigrants. (Aside from that Mrs. Lincoln, how did you like the play?)

    Card loses all credibility when he argues: “immigrants and native born workers are “imperfect substitutes.” That means they don’t compete with each other in the job market as much as, say, immigrants compete with other immigrants and natives with natives.”

    As Yogi Berra said: “You can observe a lot just by watching.” Once immigrants become available they tend to completely displace native-born workers. You can see the ethnic composition of entire workforces completely change. In certain parts of the country that had no immigrant workers 25 years ago (or 75 years ago – they weren’t prosperous enough), you can no longer see any whites or blacks on some construction crews. The people who used to do those jobs must be doing something else or have dropped out of the labor force entirely. If Card says that immigrants and non-immigrants are imperfect substitutes – he has no credibility left. We observe the opposite. But illegal immigrants typically work for poverty level wages and no health or vacation benefits – so they are much more attractive to employers.

    There is probably no unskilled job in America that can’t be filled at a middle class wage and benefits. All the jobs that employers say that they can’t fill pay wages that you can’t support a family on. It’s not that Americans won’t do the work, they won’t accept the pay.

    However, I will concede that it is possible that throwing 10-20 million illegal immigrants out of the country would not substantially raise wages (though I think it is unlikely). In that case, all the unemployed and all of those who have completely dropped out of the labor market would have to take up the jobs. That implies that illegal immigration has done even more damage.

    I don’t agree that American employers have an entitlement to low-wage labor. Make them offer decent medical insurance and $15/hr (in an ad in a place where everyone can find it) before they attempted to hire an immigrant for a low-skilled job and there would be very few jobs that could not be filled be the native born or legal immigrants: I’ll bet that legal immigrants would be the biggest beneficiaries of such a policy.


    • jgo says:

      “I don’t agree that American employers have an entitlement to low-wage labor. Make them offer decent medical insurance and $15/hr (in an ad in a place where everyone can find it) before they attempted to hire an immigrant for a low-skilled job and there would be very few jobs that could not be filled be the native born or legal immigrants…”

      And if such a statutory provision were drafted it would be riddled with loop-holes.

      Joel Stewart in his well-known article of 2000 April 24, and the large, reputable, award-winning law firms Cohen and Grigsby and Fragomen et al., along with the immigration lawyers association have thoroughly demonstrated that such market tests are farces, easily gamed, a charade reluctantly performed on the not so public stage by employers with no intention to seriously consider US candidates.

      Simply advertise extremely locally via some quirky niche medium, or require US citizen applicants hundreds of miles away to relocate themselves, and then declare that “there are no ‘qualified’ local US applicants”, when in reality there were thousands of able and willing US applicants who merely did not have the means to travel to the interview or relocate themselves after this prolonged economic depression… and then turn around and invest thousands to import the younger, cheaper, more easily brow-beaten guest-worker… or relocate a foreign student already in the USA under OPT and eventually get a change of status to E-3 or H-1B.


      • Kevin Rica says:

        jgo,

        I agree that that the system could be gamed, but the internet might make that harder. There could be a standard internet site where $20/hr unskilled jobs + health benefits are advertised by zip code. The local employment office could be charged with making sure everyone knows where to look.

        This is a change that could be made now!

        But the important thing is that even if no American steps forward, if they want to hire an immigrant, they still have to pay the same amount ($20/hr + health benefits) + take care of all the immigration fees. So they will take an American or legal immigrant for $15.

        The important part is that if they say that there are no gringos, they should pay MORE.

        No CHEAP LABOR!! Market price or more.


  2. David says:

    I think there’s another factor: immigrants are also consumers, and increasing the number of immigrants also increases the overall level of demand in the economy, and therefore the total number of jobs.


    • Kevin Rica says:

      David,

      When an immigrant takes your job, he eats your lunch (earns the money that you would have earned and then spends it).

      In order for the immigrant to create more demand in the aggregate, it would have to be a totally new job. A lot of immigrants have entered the country in the last 10 years — so where are the new jobs?

      All the material that Jared discusses that imply illegal immigrants to be creating new jobs are theory papers that show results that no one can observe. As the French would say — If my aunt were anatomically different, she would be my uncle.


      • Michael says:

        40% of Fortune 500 companies are started by either immigrants or their kids. This makes sense; immigrants are by definition the folks who have a great deal of drive to improve themselves and succeed. In addition, immigrants tend to have access to family- and ethnic-based markets for capital outside the usual systems.

        Remember, illegal (and legal) immigration is down, and also the economy is in the tank right now. Immigrants aren’t idiots; they come here to make something of themselves. If we’re smart, we let them, then reap the rewards.


        • Kevin Rica says:

          Really it’s only 40%. I would guess that over 30% of the population is “either immigrants or their kids.” I would have thought first or second generation immigrants would do even better

          The reason that we do need some immigrants is that affluence kills the work ethic that creates affluence. So we need some immigrants to really come here and work — by which I mean study differential equations, not bus tables. There are already many people here who don’t have the skills who can do the menial labor — but they still need a decent wage to support their families.


          • jgo says:

            It looks like the foreign born are about 15% of the civilian non-institutionalized population 16 and older, according to BLS, but that’s only immigrants (it does not include US-born children of immigrants). They haven’t been tracking/reporting it for long, so we’d have to dig around in the census rat’s nest for older figures.

            http://www.kermitrose.com/jgoEmpUnEmp.html

            Propagandist Stuart Anderson is the source of that “40% of Fortune 500” claim, so it’s totally unbelievable. They (the propagandists) have tried the same dishonest scam with patents. If one of the 10 founders of a firm is an immigrant and 9 are 7th generation native US citizens, they’re claiming that firm as “immigrant founded”. By the time you add “or children of immigrants” it’s totally bogus.

            Another common misrepresentation we’ve seen is picking out one firm out of 5 or 20 in a particular niche that has an immigrant co-founder and pumping it up, dishonestly claiming that we would not have that kind of product or service if not for that immigrant. (This is especially irritating when the product or service really isn’t very good, or when the firm or its lead product shows a lack of professional ethics, e.g. by massive privacy violation or collusion with thugs trying to suppress freedom of political and religious speech.)

            And they also fail to point out the numbers and percentages of immigrant co-founded businesses which are merely more cross-border bodyshops and off-shoring firms vs. respectable firms making high quality products.

            Meanwhile, according to an earlier CSM piece, over the last nearly 20 years VC outfits have poured a disproportionate 25% of their investments into firms with at least one immigrant founder (few guest-workers). What would be the results if 95% of their investments went to US native citizens?

            I’ve read that 22% of S&P firms are founded by engineers, and “According to a report by BankBoston in 1997, the roughly 4K companies founded by M.I.T. alumni and faculty members had created 1.1M jobs and generated annual sales of $232G worldwide”, according to an article in the NYTimes.

            Meanwhile, NSF once reported that some 44% of US tech workers don’t have CS degrees and 11% of US engineers don’t have engineering degrees (but don’t say how many are bright autodidacts vs. earners of PhDs or LittDs in classics, music or psychology, though many of the best software developers have backgrounds in music). It didn’t test quality and productivity, so this could be a good thing or a bad thing. It would be very good if it shows that the USA has so many bright people who can do great work without being run through the wringer of academia. It would be bad if it showed that those without the specific degree are, on average, doing below par work. NSF has also reported that nearly 60% of STEM grads are not employed doing STEM work, while other studies have suggested that less than 30% of STEM grads are doing STEM work. Meanwhile, employment in software product development has been flat for a decade, while 46K to 66K additional US citizens have earned C&IS degrees each year during that time. Together, these data suggest a terrible waste of minds of millions of bright and gifted US citizens.


          • jgo says:

            Slight correction: The NSF figures on percentages with degrees in the field are 20% of engineers do not have engineering degrees (I had mistakenly recalled the number as 11%), and 40% of software developers don’t have CS degrees (I had mistakenly recalled the number as 44%). So, I under-stated one and slightly over-stated the other.


  3. Steve Goldstraw says:

    Even with very little substitution between immigrant and native populations, has anyone measured how much of the increase in inequality (especially over the last 30 years) is due to the increasing number of immigrants (including those in the cash economy) are simply, by their numbers “averaging down” what the bottom 50% earn in total. More immigrants even with zero competition to native labor increases the proportion of poorer people.


  4. Michael says:

    But . . . immigrants are BROWN. It HAS to be their fault. How could something bad that is happening in the US be the fault of white people?


    • jo6pac says:

      Yep and as a White Native California, I’d be more than happy to turn the state political theater over to my brown brothers and sisters may be they can do a better job. When my job was outsourced it went to white native Californian with less experience and would work for 2/3 less pay. Please when you start pointing your finger at other races don’t forget corp. Amerika has abandoned the American worker the one that helped corp. Amerika become wealthy, they and your congressperson/senator help change the laws in their favor. There is always money for ws/dod vendors but nothing for Main Street.


    • Kevin Rica says:

      Michael,

      I know that you said that in jest. But don’t even say those things as a joke.

      This country is crazy about race.


      • jo6pac says:

        No this in Not Jest, I’ve worked in the fields of the Mid Central Valley doing water to tractor work and I will never turn my back on the friends I made here.


      • Michael says:

        Indeed ’tis. It’s just a good idea to remember that it’s so.


  5. jonathan says:

    I think I’ve read all the well known studies of the effect of immigrants on wages – also on crime and the demand for services. I approached them from the point of view that low wage immigrants, legal or otherwise, were competing with poorly educated US workers, meaning to be blunt minority workers, meaning to be blunter African-Americans. I had to change my opinion because that’s not what the work says.

    I can’t find much evidence that immigrants are bad in any way. The best seems to be that illegals over time have become a somewhat larger percentage of certain prison populations. Even there, if you can find actually sound statistics – which is not easy – it looks more like the only group significantly over-represented in jails and prisons remains African-Americans. Those numbers are staggering but of course we don’t talk about that because African-Americans aren’t recent immigrants.

    Immigrants, including illegals, tend to use fewer services. If their employer withholds, which they are required to do by law, as a group they use fewer services for the money they pay. One can argue that in certain areas the literal number means more demand for schools, but they also support stores, provide services, receive services and otherwise contribute to the economy.

    My favorite non-argument is that immigrants lower the average. People have no clue in general but it’s been well demonstrated that they completely misunderstand the distribution of income in the US. Look up Ariely and Norton. I believe you can still go to their site and do the test survey yourself. Here’s a brief summary:

    People think the bottom 20% have 6-8% of total income. Even college professors think they have 3%. They actually have .3%. Note the decimal place. You can’t lower that by averaging down with immigrants. (The lowest quintile in the US is 11% below OECD averages.)

    As for the rich, people underestimate the share they have by huge percentages. This is true of income and of wealth: people are off by like 1/3, thinking that the rich have much less and make much less of the total while thinking the poor have more.

    This degree of ignorance is a source of the irrational rage. Nutty stuff like tax the poor because they don’t pay “their share.” Easier to think if you imagine they have money. They don’t. Have to blame someone so blame immigrants. Blame them for ruining it for you. Easier to think that when the things you believe are facts aren’t true.


    • jo6pac says:

      Thank You


    • Kevin Rica says:

      jonathan,

      I think that you fundamentally misunderstood Ariely and Norton. It may seem like a minor detail to you, but they were taking about wealth, not income. These are very different things, but if you read the article more carefully, you will see wealth defined on the bottom of page 9. Consequently, most of the inferences that you drew from the article are inaccurate. For example, if the bottom 20% had 0.3% of total income, they would have an annual income of about $100 annually. I’ll guess most homeless panhandlers are way beyond that.

      However, you are correct about the need for more education and information on such matters.

      You also misunderstand the argument that immigrants lower wages. The argument is not that their wages are low and they ruin the average, they argument is that because they compete for jobs by offering to accept lower wages, they lower the wages of those who are already here and impoverish Americans and legal immigrants.


  6. Mary says:

    “This growing appreciation of the German model is a welcome change from the laissez-faire approach to globalization that has dominated U.S. policy and discourse for decades, dooming many Rust Belt denizens to lives of crystal meth and quiet desperation.” Wow, bleak. I made this series of postcards once, flat gray industrial images of what I called the other Americana. (It’s amazing how the simplest concept can take hours in the darkroom.) I was suddenly reminded of that.

    But I believe that changes to the German model may be increasing as more of its companies may be moving overseas. It is more cooperative, obviously, but one has to wonder whether we idealize the model at present since it tends to hold up better during “recessionary” periods (I know that technically we’re not in a recession, but…) and whether we make accurate appraisals of its viability over the long-term.


  7. Kevin Rica says:

    Jared,

    I couple of blessedly short last thoughts on your immigration piece:

    “its (immigration’s) impact on the growth of inequality is small, maybe 5% according to one careful study (Card’s).

    Card’s study is very dependent on its assumptions if it is to pick up the effect of immigration on the incomes of native-born workers. (Aside from the fact that it cannot distinguish between legal and illegal workers.) If:

    (1) inter-regional labor market arbitrage is efficient enough or if:

    (2) the immigrants themselves are doing the arbitrage (moving to growing areas instead of stagnant areas and eliminating inter-regional wage differences so that there is no incentive to move from stagnant regions of the U.S.)

    (I believe that (2) is the big factor, because illegal immigrants are rational economic actors: their communities thrive best in strong regional economies.) then Card will miss or underestimate the full impact of immigration on native wages. Card’s arguments are certainly not a fortiori arguments! So anything that Card estimates should be accepted only as a MINIMUM estimate of the wage effects of immigration.

    So you should restate your inferences from Card’s paper in a more logically correct fashion:

    “its (immigration’s) impact on the growth of inequality COULD BE small, maybe AS LITTLE AS 5% according to one careful study (Card’s).

    A second issue: If you believe that “immigrants compete with other immigrants and natives with natives,” then you must believe the logical corollary that “the biggest economic beneficiaries of a crackdown on illegal immigration would be legal immigrants.”

    If you really believe that, then you should come right out and say it! If you don’t believe it, then you really don’t believe in the Card study. Logic requires you to accept the corollary!


  8. TV says:

    Wage inequality? It’s all labor market institutions. See the “treaty of detroit” paper by Levy/Temin: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=984330.

    From a trade perspective, immigration need do nothing to wage inequality. More unskilled workers could merely expand production of unskilled-intensive tradables. If you’re selling onto world markets so as not to effect the price of those unskilled-intensive goods, boom, you’ve got nothing doing. Of course, that’s unlikely to be totally accurate…


  9. jgo says:

    2 things not otherwise covered:

    1. “Inequality” is deceptive when considered exclusively, and when the data from which the gini index and/or other measures and methods by which they were calculated have not been published. I’d like to economic mobility considered in the mix, with examination of both income and wealth of individuals and family members over time. UMich has tracked this. Others have looked at the dadburn revenoooers’ (to use Snuffy Smith’s descriptor) data which has its own biases.

    2. Define “low-skilled” and “high-skilled” and “qualified”. All seem to be weasel words commonly abused by propagandists and those who discriminate against US applicants (by nationality and age). In some cases, the meaning shifts within a single sentence.

    I’ve known highly-skilled craftsmen and janitors and artisans and scientists and engineers and software developers and shuttle van drivers and farm laborers who did not have a bachelor’s degree. I’ve also met low-skilled craftsmen and janitors and artisans and scientists and engineers and software developers and shuttle van drivers and farm laborers and professors and medical doctors who had MDs and PhDs. At the same time I’ve seen very talented and very intelligent people in varied fields who did not have academic credentials but did have excellent work records, and people with academic credentials who were inexperienced and/or not very bright. Daniel Coyle 2009 in _The Talent Code_, suggested that expertise (or talent) is mostly a function of having invested at least 10K hours into focused practice in a particular field or endeavor.

    C and G made public 5 years ago how able and willing US job applicants can be dishonestly but legally declared “unqualified” or “unwilling”. Simply offer below local market compensation and no savvy US candidates are likely to be “willing”. Carefully coach the alien and craft a list of “requirements” that match, and all other applicants can be declared “unqualified”, regardless of their ability to actually do the job. Emphasize brand-name tools rather than generic and you can declare even the former developer of such tools to be “unqualified” to use them.

    Emphasize academic credentials one day and experience another and nearly all applicants can be declared “unqualified”, regardless of their ability to actually do the job. Construct trivial pursuit or “human compiler” “screening tools” and you can easily declare most applicants to be “unqualified”, regardless of their ability to actually do the job. Bury most candidates’ materials in a black-hole data-base and fail to make savvy searches and they’re all “unqualified” regardless of who able and willing they are.

    And after being through such an insulting gauntlet a few times, how many able and willing US applicants (and how many such applicants over 35) will be sufficiently “energetic” or “enthusiastic”, and thus declared “unqualified”?

    Since many employers have been excluding US citizen candidates from the bottom (or middle, via age discrimination) of the career ladder for the last couple decades, how does that factor into measuring the economic and cultural effects of the excessive supply of illegal immigrants (over the last 60 years), guest-workers (especially over the last 22 years), visa over-stayers, and legal immigrants (again over the last 60 years)… and their excessive children?

    http://www.kermitrose.com/econSummaryAnalysis.html


  10. B. Schulz says:

    Both Mr. Bernstein’s economic analysis and the study by David Card (conducted by his NBER organization) fall prey to the same problem faced by all such economic analyses that purport to tell the “true story” behind immigration – it focuses on all immigrants. Such an analysis should first start out by looking at the nature of our LEGAL Immigration system.

    Fully 78% of our immigrants pass through our legal immigration system which gives preference to Legal Immigrants who will take jobs in industries where labor is in short supply. On a top level basis, these statistics overwhelm the statistics of ILLEGAL Immigration, which is uncontrolled. Thus, if you study the impact of Legal Immigration on wages the result to be studied is not whether immigration depresses wages but rather if immigration prevents run-away wage inflation. To claim that a system that is designed to slow the arrival of people who could depress wages results in little wage depression can only be described as an analysis geared to prove the obvious.

    Once Card the study proves the obvious, that this has little impact on wages, it tries to extend that logic to also cover Illegal Immigrants, a smaller group who enter the workforce in areas where there is already an over-supply of labor. In order to justify this, the NBER and Mr. Card have come up with analysis terms called total factor productivity and the capital-to-labor ratio.

    What these terms really mean is using less automation and employing more people is good. In its extreme this means it is good for more workers paid less to produce more products per dollar spent on wages. More automation with higher paid workers is bad. This describes a low wage economy with the Native Born as rich bosses.

    Over the twenty years from the signing of Simpson-Mazzoli in 1986 to the start of the current recession in 2008 the American Economy was able to create 1.66 million new jobs per year on average. During that time our Native Born workforce increased by 0.5 million workers per year. We also admitted a million new legal immigrant workers per year. Since these figures are out of balance by 0.16 million people the number of unemployed in the USA should have declined by 3.4 million people from 1986 to 2007. In 1986 we averaged 8.2 million people unemployed. Without illegal immigration the number of unemployed people in 2007 should have been 4.8 million. In fact 2007 unemployment averaged 11.8 million people. In 2006 the Pew Center estimated there were 7.2 million Illegal Immigrant Workers in the USA. This means that for each new Illegal Immigrant Worker in the USA, one American Worker joined the ranks of the unemployed. Mr. Card should remember Occam’s razor.

    To see the plight of the US Worker affected disproportionately by Illegal Immigration you have to focus in on individual wage markets where Illegal Immigrants are most prevalent. That way you factor out the effect of our Legal Immigration System. The plight of our Citizen and legal Resident farm workers illustrates how refusing to end Illegal Immigration devastates wages to no really substantial end.

    Farm Workers top the Pew Center list of occupations most affected by Illegal Immigration. Per Pew data, as much as 25% of this workforce is made up of Illegal Immigrants. According to the US Bureau of Labor Statistics, Farm Workers earn a median wage of $8.64 per hour. Construction Laborers who work equally hard with comparable skills but they earn median wages between $11.23 and $13.19 per hour. The lowest skilled Loggers earn a median wage of $14.66 per hour. Even Parking Lot Attendants have higher median wages than Farm Laborers at $9.04 per hour.

    This is a great example of the devastation Illegal Immigration has wrought on wages in a specific market. The sad part is even if farm wages were to increase to the level of Laborers and Loggers, to a median wage of $13.50 per hour, the cost of farm labor is only 7% of the cost of food. The result would be a 4.5% increase in food prices. Inflation is often greater.

    If you examine real wages in the professions most populated by Illegal Immigrants you will find that they have all fallen significantly. Whereas real wages where few Illegal Immigrants work have not been so disproportionately affected. And if you look at wages in areas that benefit from the exploitation if Illegal Immigrant Labor the most, you find that there is where the highest of all wage growth occurred. So if real Land Developer Wages increased while Farm Labor wages declined, and the combination averages out to no real change in wages does that mean Illegal Immigration does not depress wages? Of course not.


    • Kevin Rica says:

      B Schulz,

      I couldn’t agree more.

      I made the same remark about Card and Occam’s razor. Card’s argument is so unconvincing. It only convinces those who want to be convinced. It’s like telling your wife that you caught something from a toilet seat. If she believes that it’s because she desperately wants to believe that.

      I also object to the Card argument that it’s ok if illegal immigrants depress the wages of other immigrants. What difference does that make? How can we be an egalitarian society if we accept people here on the condition that they become a legally recognized underclass for the benefit of their employers? Once they come here and are granted legal status, they should have the same rights and protections. And if that is not practical (which it is not!!) — they should not be allowed to stay.

      If they are going to come here to “chase the American dream” they should be expected to be economically self-sufficient. And if they can’t be self-sufficient, they shouldn’t come. We are obviously already having a hard time maintaining the social safety net.


      • B. Schulz says:

        I agree. George J. Borjas, Professor of Immigration Economics, Harvard University said: “In dragging down wages, immigration currently shifts about $160 billion per year from workers to employers and users of immigrants’ services.” The rich get richer and the poor get poorer. But because this is a shift rather than a decline, the overall average wage stays the same.

        Statistically speaking it is easy to spot a bogus “Illegal Immigrants are good” analysis. All one has to do is look to see if the study includes all Immigrants regardless of legal status. That is a dead give-away that the study author wants to hide the bad effects of Illegal Immigration in the beneficial effects of legal immigration.

        Did you know that about 60% of the cost of lobbying for the last attempt at Comprehensive Immigration Reform back in 2007 was paid by big business? Apparently those who received that $160 billion windfall want to pretect it.


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