Immigration, nuance, and political primaries

September 7th, 2015 at 10:49 am

Strange title, I grant you, as primaries on either side don’t do nuance. They tend to be more about distilling nuances out of the brew so as to provide the base with the undiluted platform. In the general election, hard edges soften, as candidates undertake the delicate dance of holding the base while courting the middle.

That doesn’t mean, however, that one should ignore this part of the debate. To the contrary, you can learn about the fundamental party architecture–the skeleton upon which more nuanced policy will later be built. The R’s are not going to deport all the unauthorized immigrants already here, and they’re highly unlikely to be able to overturn birthright citizenship. But they’ll try to find ways to be very tough on immigrants and they’ll certainly block comprehensive reform.

The D’s may not be able to make college free (or debt free), or spend a lot more on public infrastructure, or raise taxes on unearned, capital incomes, while significantly boosting the federal minimum wage. But the signal from them is that this is the broad direction in which they’ll push (one can, of course, choose not to believe that signal).

This notion–that the primary stage of the election generates simple, central themes on both sides–was amplified by this interesting piece in the NYT the other day on how a red-sounding town in eastern Iowa is dealing with the Republican primary theme of anti-immigration. It’s a town in which a significant immigrant community is economically integrated, both as workers and entrepreneurs, and thus the R’s theme creates cognitive dissonance among the electorate.

EG, here’s a revealing quote from a townsman:

“I’m as prejudiced as the day is long…It’s a bad thing that all these illegal Mexicans are here….But they’re hard workers. They’re doing jobs that lazy Americans won’t do.”

Other “voters said that many Latinos they know, regardless of immigration status, were as Iowan as anybody, having raised families and attended schools and churches in their communities.”

Two points about this, one political, one economic.

Politically, it should be a problem for a party when your theme engenders such cognitive dissonance. Obviously, there’s a virulent strain of populism that has long prospered by promoting prejudice, and I’m certainly not saying that won’t work now as it has in the past. But it’s harder when it challenges people’s experiences.

Apparently, Gov. Scott Walker thinks we might need a wall on our northern border too, and that’s just a downright headscratcher for these voters: “I didn’t realize illegal Canadian immigration was such a big problem,” responded one.

I’d argue the D platform does not suffer from this dissonance, as the underlying theme–the inequality embedded in the current economy is hurting the living standards of the middle class and the opportunities of the poor–is generally resonant. No one on that side of aisle has to bend themselves into a pretzel in order to be comfortable supporting that theme.

Substantively, the economics of this Iowan story are worth understanding. I’ve tried to be forthright in acknowledging that increased labor supply through immigration or any other channel puts downward pressure on wages; that stuff about “lazy Americans” who won’t do certain jobs is non-economic thinking. If the wage were high enough, you’d find workers.

But I’ve stressed that this is but a first order effect and one must push the analysis further.

The second order effects are those you see in this piece, wherein adding people to a local labor market doesn’t just increase supply; it increases demand as well, and such offsetting dynamics must be assessed. In that regard, one can read some of the comments in the piece as saying: “yes, immigrants, legal or otherwise, boost supply and utilize public services. But they also generate demand for services, food, housing, and so on…and we like that part of the deal. Plus, they’re are neighbors and fellow congregants.”

This academic article formalizes these dynamics–here’s the abstract:

Most research on the effects of immigration focuses on the effects of immigrants as adding to the supply of labor. By contrast, this paper studies the effects of immigrants on local labor demand, due to the increase in consumer demand for local services created by immigrants. This effect can attenuate downward pressure from immigrants on non-immigrants’ wages, and also benefit non-immigrants by increasing the variety of local services available. For this reason, immigrants can raise native workers’ real wages, and each immigrant could create more than one job. Using US Census data from 1980 to 2000, we find considerable evidence for these effects: Each immigrant creates 1.2 local jobs for local workers, most of them going to native workers, and 62% of these jobs are in non-traded services. Immigrants appear to raise local non-tradables sector wages and to attract native-born workers from elsewhere in the country. Overall, it appears that local workers benefit from the arrival of more immigrants.

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5 comments in reply to "Immigration, nuance, and political primaries"

  1. Jill SH says:

    Just how does one dance while holding a bass?

    Hope you had a happy Labor Day!


  2. JohnR says:

    It’s human nature to frame an argument by emphasizing what you like or believe while leaving out what you don’t. If you’re looking at why somebody should buy into something, you detail all the possible profit points, while minimizing or even ignoring all the possible loss points. Sometimes you might even not notice you’re doing that! Ideologies, like any other form of religion, demand and enforce that sort of carefully-blinkered vision, and ever since the GOP overtly became a religion about 35 or so years ago, it has been no different. There’s no such thing as “cognitive dissonance” in a religion, so nowadays none in the GOP, either.


  3. Amateur says:

    We’re on the same page, certainly. This is one thing I thought should be obvious to everyone regarding pressure on wages: immigrants, whether legal or not, increase demand. Outsourced labor might or might not generate additional demand in the country of origin.

    Other misc. thoughts:

    On another note, I once suggested something called proportional immigration, that is, don’t do as Canada does now, which is to let in only those you BELIEVE are in demand. Let in people trained in every profession in equal proportion to the profession, and this also goes for the untrained — them them in in proportion to the size of their existing demand. Somebody should try this.

    Excessive access to government policy by large corporations distorts labor markets — especially those labor markets that demand a large investment in personal capital by the laborer.


  4. Amateur says:

    A long time ago, Yglesias raised the issue that there seemed to be a magical thing happening when we allowed foreign labor to immigrate. Suddenly, just out of nowhere, their productivity leaped into the stratosphere.

    The fundamental political problem we have today is defined by this issue.

    Did Yglesias solve it by saying, just let them in? No. Of course not.

    We need a much deeper talk about why some nations have low productivity compared to us, and why the US is a bit low compared to Germany.

    Is it about work ethic? I can say emphatically, NO! Is it character? No. Is it History, Yes! While you ask, why don’t we learn more about history from some good sources?

    I’d suggest this blog: http://delong.typepad.com

    History has no equal…


  5. Kevin Rica says:

    “By contrast, this paper studies the effects of immigrants on local labor demand, due to the increase in consumer demand for local services created by immigrants.”

    Silly, silly argument. Terrible macroeconomics. Hiring an immigrant in the place of a native or previous immigrant just diverts demand to what the new immigrant buys from what the previous employers would have purchased.

    Even if we assume that a few net low wage jobs were created, overall, wages decline (if you be live the minimum wage literature) because of low labor-demand elasticities, so overall worker purchasing power declines. (Are you questioning the minimum-wage literature Jared?)

    But you are very right about another point Jared:

    I’ve tried to be forthright in acknowledging that increased labor supply through immigration or any other channel puts downward pressure on wages; that stuff about “lazy Americans” who won’t do certain jobs is non-economic thinking. If the wage were high enough, you’d find workers.

    Everybody seems to think that corporate CEOs and investment bankers won’t show up for work unless they get huge incentive bonuses. And the investment bankers get their bonuses whether they screw up or not.

    So why shouldn’t the guy who has to literally shovel pig sh*t faster on an Iowa farm get incentive bonuses too?


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