5 ms·

This does not seem obvious to me. For example, imagine if you overnight doubled the US population. Would wages go down? Well, overnight you would also double

This does not seem obvious to me. For example, imagine if you overnight doubled the US population. Would wages go down? Well, overnight you would also double the economy and double demand for just about every kind of work, from hairdressers to security guards. What's the overall effect? (And you are talking about just 3.5%, not 100%.) Here's one classic study on the effect: David Card, "The Impact of the Mariel Boatlift on the Miami Labor Market" (1990), http://davidcard.berkeley.edu/papers/mariel-impact.pdf http://davidcard.berkeley.edu/papers/mariel-impact.pdf Quoting from the abstract: "…This paper describes the effect of the Mariel Boatlift of 1980 on the Miami labor market. The Mariel immigrants increased the Miami labor force by 7%, and the percentage increase in labor supply to less-skilled occupations and industries was even greater because most of the immigrants were relatively unskilled. Nevertheless, the Mariel influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers…" That's a rapid influx of 7% of Miami's population! But the effect isn't obvious to economists, either, and you can find people arguing both sides. This is a fairly balanced article: https://www.npr.org/2017/08/04/541321716/fact-check-have-low-skilled-immigrants-taken-american-jobs https://www.npr.org/2017/08/04/541321716/fact-check-have-low...

BurningFrog 8y ago
The effect of a doubling of the population depends entirely on who the new people were. Are they native speaking engineers, doctors and pop stars? Or illiterate and sickly old people? One thing is for sure, housing prices would skyrocket!
- 3x 8y ago
  > One thing is for sure, housing prices would skyrocket! Sure, in the hypothetical of instantaneously doubling the population without any time for the market to adjust for increased demand. But if the population doubles over the course of 30 years? That's only about 11 million people a year, the market would expect and adjust to the influx of people easily. Governments would also ideally be devising initiatives and changing policy to promote affordable housing. The high cost of housing in the US is its own issue anyway.
jorblumesea 8y ago
Most immigrants (legal and illegal) are not Indian software engineers working at Google. They are low skill/poorly educated and got in on refuge status or because they have a family member already in the country. They work as taxi drivers, construction workers, cashiers, etc. It's not a huge leap of imagination that a constantly increasing low skill labor supply is to the detriment of current workers in these fields (many of whom might be immigrants themselves). 29% of immigrants lack a high school degree or equivalent GED and are disproportionally represented in the service industry, construction, maintenance, and other blue collar positions. For example: https://www.migrationpolicy.org/sites/default/files/source_images/FRS-2018-T3.png https://www.migrationpolicy.org/sites/default/files/source_i... So yes, it is likely that immigration rates have a negative effect on the wages of native workers in low barrier of entry positions. You'd have to suspend disbelief to accept the narrative that there is no impact. source: https://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states https://www.migrationpolicy.org/article/frequently-requested...
icu 8y ago
We can actually hold for immigration to some degree. For example, while not exactly doubling, the entry of women into the workforce after WWII had a similar effect of massively increasing the the supply of labour. You would think that two income earners in a household would increase the economy enough that wages would need to rise due to a subsequent shortage of labor... but it did not. Wages, in real terms, have largely lost purchasing power to the point where it takes two incomes to have the same (or less) purchasing power than one income did prior to WWII. Part of it is the productivity gains made post WWII (i.e. we can do more with less labor) but a lot of it is the supply side of labor and competitive pressures pushing the price equilibrium (wages) down. I'm not making an argument against the entry of women into the workforce. I'm an advocate for 'freedom' so I'm all for women doing what they want as long as they are following the law. My point here is the supply side of labor does not have a large enough increase to the demand side of labor to make up for the decrease in the price of wages.
- blub 8y ago
  And most of it is greedy corporations and lack of worker protections. There's always enough money to increase CEO salaries. I can concede that unskilled immigration is putting downward pressure on the salaries of low/no skill workers, but the US social inequality is the elephant in the room.
- MarkMc 8y ago
  > Wages, in real terms, have largely lost purchasing power to the point where it takes two incomes to have the same (or less) purchasing power than one income did prior to WWII. I don't think that is true. Even if you exclude management jobs, hourly wages have remained roughly steady in real terms since the 1960's: http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-... There are also longitudinal effects at play: native-born Americans have seen their wages rise but this is offset by immigrants who generally have lower-than-average wages (but still higher than in the country they emigrated from). Both groups are better off even though average wages haven't changed.
  - 8y ago

BurningFrog 8y ago

The effect of a doubling of the population depends entirely on who the new people were. Are they native speaking engineers, doctors and pop stars? Or illiterate and sickly old people? One thing is for sure, housing prices would skyrocket!

3x 8y ago
> One thing is for sure, housing prices would skyrocket! Sure, in the hypothetical of instantaneously doubling the population without any time for the market to adjust for increased demand. But if the population doubles over the course of 30 years? That's only about 11 million people a year, the market would expect and adjust to the influx of people easily. Governments would also ideally be devising initiatives and changing policy to promote affordable housing. The high cost of housing in the US is its own issue anyway.

jorblumesea 8y ago

Most immigrants (legal and illegal) are not Indian software engineers working at Google. They are low skill/poorly educated and got in on refuge status or because they have a family member already in the country. They work as taxi drivers, construction workers, cashiers, etc. It's not a huge leap of imagination that a constantly increasing low skill labor supply is to the detriment of current workers in these fields (many of whom might be immigrants themselves). 29% of immigrants lack a high school degree or equivalent GED and are disproportionally represented in the service industry, construction, maintenance, and other blue collar positions. For example: https://www.migrationpolicy.org/sites/default/files/source_images/FRS-2018-T3.png https://www.migrationpolicy.org/sites/default/files/source_i... So yes, it is likely that immigration rates have a negative effect on the wages of native workers in low barrier of entry positions. You'd have to suspend disbelief to accept the narrative that there is no impact. source: https://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states https://www.migrationpolicy.org/article/frequently-requested...

icu 8y ago

We can actually hold for immigration to some degree. For example, while not exactly doubling, the entry of women into the workforce after WWII had a similar effect of massively increasing the the supply of labour. You would think that two income earners in a household would increase the economy enough that wages would need to rise due to a subsequent shortage of labor... but it did not. Wages, in real terms, have largely lost purchasing power to the point where it takes two incomes to have the same (or less) purchasing power than one income did prior to WWII. Part of it is the productivity gains made post WWII (i.e. we can do more with less labor) but a lot of it is the supply side of labor and competitive pressures pushing the price equilibrium (wages) down. I'm not making an argument against the entry of women into the workforce. I'm an advocate for 'freedom' so I'm all for women doing what they want as long as they are following the law. My point here is the supply side of labor does not have a large enough increase to the demand side of labor to make up for the decrease in the price of wages.

blub 8y ago
And most of it is greedy corporations and lack of worker protections. There's always enough money to increase CEO salaries. I can concede that unskilled immigration is putting downward pressure on the salaries of low/no skill workers, but the US social inequality is the elephant in the room.
MarkMc 8y ago
> Wages, in real terms, have largely lost purchasing power to the point where it takes two incomes to have the same (or less) purchasing power than one income did prior to WWII. I don't think that is true. Even if you exclude management jobs, hourly wages have remained roughly steady in real terms since the 1960's: http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-... There are also longitudinal effects at play: native-born Americans have seen their wages rise but this is offset by immigrants who generally have lower-than-average wages (but still higher than in the country they emigrated from). Both groups are better off even though average wages haven't changed.
- 8y ago