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In a closed labour market (one where the number of available workers remains stable) it would have begun rising already. Wages are artificially depressed using

In a closed labour market (one where the number of available workers remains stable) it would have begun rising already. Wages are artificially depressed using immigration. Like most markets, labour vs demand for labour is just a function of supply and demand. *Just to clarify, this issue is definitely more complicated than an S&D curve and it is not my intention for this issue to become mired in politics. However it's worth having a discussion about domestic wage stagnation and the decline of the middle class in the US, and how it relates to the past 30 years of trade liberalization and increased immigration rates.

rco8786 8y ago
> Wages are artificially depressed using immigration. What an amazing and completely original scapegoat. Even if it were true, using a 7th grade economics to describe the entirety of U.S. employment economics has to be a joke, right?
- exabrial 8y ago
  He's not completely incorrect though: Illegal immigration accounts for a significant portion of farm and construction labor in the southwest/midwest because it gets around pesky minimum wage and other labor laws. These are usually unskilled jobs however, so their effect on other wages is likely nonsignificant. Legal Immigration in general tends to grow wages as the GDP and investment increases.
  - rco8786 8y ago
    Right. illegal immigration likely does not effect these numbers in a significant way, and legal immigration raises wages. How is it not a scapegoat to say immigration is the cause of flat wages?
    - exabrial 8y ago
      If the labor pool increases in relation to jobs, than yes, he's correct, it will depress wages, that's simple economics. However the blame doesn't lie with the immigrants: you shouldn't be working so simple a job it can be easily taken over by an unskilled worker and expect a decent wage.
      - int_19h 8y ago
        When you add an immigrant to the country, it's not just the labor pool that grows - it's also the demand (because every new resident needs housing, food and other services), and that demand translates to jobs.
        exabrial 8y ago
        Exactly. I'm not sure why we're being down voted into oblivion, but this is exactly correct.
    - adventured 8y ago
      > How is it not a scapegoat to say immigration is the cause of flat wages? Flood your economy with low skilled labor at the same time that average GDP growth is at an all-time low and productivity growth is at an all-time low. See what happens. If your economy isn't growing fast enough to absorb the amount of low skill labor that you're importing, you're going to considerably depress wages. In more realistic terms, 1.5% to 2% GDP growth isn't going to get you anywhere. You have a stagnant economy at those growth rates. Finally then the mistake is being made of throwing a lot of new unskilled labor on top of that at exactly the historical time when you need a lot of new unskilled labor the least.
      - deleted 8y ago
        [deleted]
      - rco8786 8y ago
        What you’re saying is directly opposed to what the article states, FYI.
  - learc83 8y ago
    We also don't know what the real impact undocumented immigrants have on the labor market. They tend to have some impact on aggregate demand, the same as legal immigrants because they also participate in the economy as well.
- arcseco 8y ago
  It's not really a scapegoat, it is a major part of the issue. The balance between wage growth and immigration rates don't seem to be discussed in mainstream politics (Likely because it's in the interests of the ownership class to keep the issue muted). The issue gets relegated to the fringes, and thus becomes an emotionally charged issue. I am not an economist but immigration rates and the relaxing of barriers of trade between nations would seem to be the most impactful policies on domestic wage growth. You can always argue that these policies have helped to lift the rest of the world out of poverty, but it doesn't belie the fact that increased immigration rates impact on wage growth for American workers. Maybe someone could shed more light on this issue, but I would suspect that both issues are inexorably tied.
  - learc83 8y ago
    Immigration can have an impact on wages, but It's a much more complex function than more immigrants equals more labor supply equals lower wages. Immigrants also contribute to the economy. Depending on how much they contribute, immigration can raise or lower wages. The issue is how much do they contribute? Immigration doves argue they are a net gain, while immigration hawks argue they are a net detriment. Historically, in the long run, immigration has always been a net gain.
  - malandrew 8y ago
    George J. Borjas from Harvard has done a ton of research demonstrating how immigration suppresses wages across labor categories.
    - learc83 8y ago
      And his work is extremely controversial. If you look at his Mariel boatlift study, his conclusions don't fit the evidence.
learc83 8y ago
When you say "just a function of supply and demand". This only applies to perfectly competitive markets where everyone has perfect information. The labor market is a textbook example of information asymmetry.
- arcseco 8y ago
  Your point rings true, but I think you're talking more about more microscopic asymmetries in wages. Certainly in some areas of the country you have a demand for labour that is not satisfied by cross state migration, however the aggregate demand doesn't really change. When you add excess labour to the closed system (The whole of the US labour market) it will inevitably reduce demand as companies looking to fill roles are more easily able to do so.
  - learc83 8y ago
    > When you add excess labour to the closed system (The whole of the US labour market) it will inevitably reduce demand as companies looking to fill roles are more easily able to do so. An increase in supply will result in an increased supply. But as I've said in another response--adding people to the economy also tends to increase the aggregate demand for labor. It's not a simple function.
    - arcseco 8y ago
      >Adding people to the economy also tends to increase the aggregate demand for labor. I agree, but the contention is the lag between growth in demand and new immigration. More people will consume more and increase aggregate demand, this we agree on. Most new immigrants don't add a lot to domestic consumption especially if they come from a background of relative poverty. So finding that balance is important. Just to state, I am more for increasing immigration for people with advanced degrees, but when it comes to low skilled immigration I feel that as a nation we owe it to our poorest to look out for their interests as long as wages remain stagnant for their income strata.
      - 8y ago

rco8786 8y ago

> Wages are artificially depressed using immigration. What an amazing and completely original scapegoat. Even if it were true, using a 7th grade economics to describe the entirety of U.S. employment economics has to be a joke, right?

exabrial 8y ago
He's not completely incorrect though: Illegal immigration accounts for a significant portion of farm and construction labor in the southwest/midwest because it gets around pesky minimum wage and other labor laws. These are usually unskilled jobs however, so their effect on other wages is likely nonsignificant. Legal Immigration in general tends to grow wages as the GDP and investment increases.
- rco8786 8y ago
  Right. illegal immigration likely does not effect these numbers in a significant way, and legal immigration raises wages. How is it not a scapegoat to say immigration is the cause of flat wages?
  - exabrial 8y ago
    If the labor pool increases in relation to jobs, than yes, he's correct, it will depress wages, that's simple economics. However the blame doesn't lie with the immigrants: you shouldn't be working so simple a job it can be easily taken over by an unskilled worker and expect a decent wage.
    - int_19h 8y ago
      When you add an immigrant to the country, it's not just the labor pool that grows - it's also the demand (because every new resident needs housing, food and other services), and that demand translates to jobs.
      - exabrial 8y ago
        Exactly. I'm not sure why we're being down voted into oblivion, but this is exactly correct.
  - adventured 8y ago
    > How is it not a scapegoat to say immigration is the cause of flat wages? Flood your economy with low skilled labor at the same time that average GDP growth is at an all-time low and productivity growth is at an all-time low. See what happens. If your economy isn't growing fast enough to absorb the amount of low skill labor that you're importing, you're going to considerably depress wages. In more realistic terms, 1.5% to 2% GDP growth isn't going to get you anywhere. You have a stagnant economy at those growth rates. Finally then the mistake is being made of throwing a lot of new unskilled labor on top of that at exactly the historical time when you need a lot of new unskilled labor the least.
    - deleted 8y ago
      [deleted]
    - rco8786 8y ago
      What you’re saying is directly opposed to what the article states, FYI.
- learc83 8y ago
  We also don't know what the real impact undocumented immigrants have on the labor market. They tend to have some impact on aggregate demand, the same as legal immigrants because they also participate in the economy as well.
arcseco 8y ago
It's not really a scapegoat, it is a major part of the issue. The balance between wage growth and immigration rates don't seem to be discussed in mainstream politics (Likely because it's in the interests of the ownership class to keep the issue muted). The issue gets relegated to the fringes, and thus becomes an emotionally charged issue. I am not an economist but immigration rates and the relaxing of barriers of trade between nations would seem to be the most impactful policies on domestic wage growth. You can always argue that these policies have helped to lift the rest of the world out of poverty, but it doesn't belie the fact that increased immigration rates impact on wage growth for American workers. Maybe someone could shed more light on this issue, but I would suspect that both issues are inexorably tied.
- learc83 8y ago
  Immigration can have an impact on wages, but It's a much more complex function than more immigrants equals more labor supply equals lower wages. Immigrants also contribute to the economy. Depending on how much they contribute, immigration can raise or lower wages. The issue is how much do they contribute? Immigration doves argue they are a net gain, while immigration hawks argue they are a net detriment. Historically, in the long run, immigration has always been a net gain.
- malandrew 8y ago
  George J. Borjas from Harvard has done a ton of research demonstrating how immigration suppresses wages across labor categories.
  - learc83 8y ago
    And his work is extremely controversial. If you look at his Mariel boatlift study, his conclusions don't fit the evidence.

learc83 8y ago

When you say "just a function of supply and demand". This only applies to perfectly competitive markets where everyone has perfect information. The labor market is a textbook example of information asymmetry.

arcseco 8y ago
Your point rings true, but I think you're talking more about more microscopic asymmetries in wages. Certainly in some areas of the country you have a demand for labour that is not satisfied by cross state migration, however the aggregate demand doesn't really change. When you add excess labour to the closed system (The whole of the US labour market) it will inevitably reduce demand as companies looking to fill roles are more easily able to do so.
- learc83 8y ago
  > When you add excess labour to the closed system (The whole of the US labour market) it will inevitably reduce demand as companies looking to fill roles are more easily able to do so. An increase in supply will result in an increased supply. But as I've said in another response--adding people to the economy also tends to increase the aggregate demand for labor. It's not a simple function.
  - arcseco 8y ago
    >Adding people to the economy also tends to increase the aggregate demand for labor. I agree, but the contention is the lag between growth in demand and new immigration. More people will consume more and increase aggregate demand, this we agree on. Most new immigrants don't add a lot to domestic consumption especially if they come from a background of relative poverty. So finding that balance is important. Just to state, I am more for increasing immigration for people with advanced degrees, but when it comes to low skilled immigration I feel that as a nation we owe it to our poorest to look out for their interests as long as wages remain stagnant for their income strata.
    - 8y ago