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Another factor: The Immigration Act of 1965 significantly increased the amount of labor immigrating to the country https://en.wikipedia.org/wiki/Immigration_an

Another factor: The Immigration Act of 1965 significantly increased the amount of labor immigrating to the country https://en.wikipedia.org/wiki/Immigration_and_Nationality_Act_of_1965 https://en.wikipedia.org/wiki/Immigration_and_Nationality_Ac...

WhompingWindows 8y ago
How does this lead to wage stagnation? You've stated a potential piece of evidence but provided no reasoning to link to your (implicit) claim that immigration leads to stagnant wages. If that's not your claim, feel free to fill out the details. Arguments have CER - claim, evidence, reasoning. Your comment was missing two.
- deogeo 8y ago
  It's pretty obvious he meant that wages were suppressed due to supply and demand, where the immigration act increased the supply of labor. If you'd like proof of the act doing just that: https://www.migrationpolicy.org/programs/data-hub/charts/immigrant-population-over-time https://www.migrationpolicy.org/programs/data-hub/charts/imm...
  - repsilat 8y ago
    Is that obvious that's what they meant? I understood it to mean that immigrants tend to earn less (I don't have this data myself), and could drag the average down. In that case the overall average real wage could stagnate while the average real wage of every cohort increased.
    - fastball 8y ago
      I don't think people need to spell out supply and demand every time they indicate that increasing the supply of something brings down prices. In other words: yes, it is obvious.
      - Symmetry 8y ago
        The thing is, though, that while immigrants increase the supply of labor they're also consumers who increase the demand for labor. That's why you don't tend to see wages go down after exogenous immigration shocks like the Cuban boat lift in Miami. Well, non-English-speaking immigrants do actually tend to depress the wages of resident non-English-speakers somewhat but not the wages of English-speakers.
        will_brown 8y ago
        >The thing is, though, that while immigrants increase the supply of labor they're also consumers who increase the demand for labor. Unless there is an increase in productivity, which if you read the article, would be apparent. That is increase the labor supply while simultaneously increasing labor productivity and you will see a real drop in demand for laborers which is naturally going to result in a stagnation of wages. That is the extra demand created by the wave of low wage immigrants is more than made up with the increases in productivity in that same time period. Now you have a macro economy much more efficient at concentrating wealth.
    - DataWorker 8y ago
      How much immigrants are paid is primarily a function of how many immigrants are in the labor pool. They tend to earn less because there’s a virtually unlimited supply of poor people who want to immigrate. Supply and demand impacts markets for labor, that’s just basic economics.
gregwtmtno 8y ago
I never understood this argument. More people in the country obviously leads to more labor supply but also more labor demand.
- deogeo 8y ago
  The extra supply is balanced by the extra demand only if exports are zero. I.e. demand for Apple devices won't increase by 10% if the US population grows by 10%. And of course making 10% more rarely requires 10% more workers - you need more on the assembly line, but not more to design the items.
  - gregwtmtno 8y ago
    Those are points I hadn't considered, but what in the US, net exports are negative. Wouldn't that imply the converse effect to what you're describing?
    - deogeo 8y ago
      It wouldn't. Say someone in the US buys something made in China - how does that increase demand for labor in the US? There's some marginal US labor required for the last part of the transport, but that's it.
      - pas 8y ago
        Though thanks to the bigger market the prices can actually decrease, so living standards could increase, even if wages haven't.
        thfuran 8y ago
        Only if they wouldn't have bought it if they hadn't moved to the US.
      - ultraluminous 8y ago
        Thee last part of the transport is not marginal in the real world. Increased local consumption drives transport, retail, marketing, etc. etc. Real life economic modeling is not a simple supply/demand, widgets made/sold chart.
moorhosj 8y ago
Women also doubled their laborforce participation rate from 30% to 60%. https://ourworldindata.org/uploads/2017/08/Labor-Force-Participation-of-women-in-the-US-1955-2005.png https://ourworldindata.org/uploads/2017/08/Labor-Force-Parti...
ebog 8y ago
This is a prime example of the Lump of Labor fallacy. https://en.wikipedia.org/wiki/Lump_of_labour_fallacy https://en.wikipedia.org/wiki/Lump_of_labour_fallacy Our best studies have shown immigration increases overall welfare. The Mariel Boatlift studies are a good example of this: https://www.jstor.org/stable/2523702?seq=1#page_scan_tab_contents https://www.jstor.org/stable/2523702?seq=1#page_scan_tab_con...

WhompingWindows 8y ago

How does this lead to wage stagnation? You've stated a potential piece of evidence but provided no reasoning to link to your (implicit) claim that immigration leads to stagnant wages. If that's not your claim, feel free to fill out the details. Arguments have CER - claim, evidence, reasoning. Your comment was missing two.

deogeo 8y ago
It's pretty obvious he meant that wages were suppressed due to supply and demand, where the immigration act increased the supply of labor. If you'd like proof of the act doing just that: https://www.migrationpolicy.org/programs/data-hub/charts/immigrant-population-over-time https://www.migrationpolicy.org/programs/data-hub/charts/imm...
- repsilat 8y ago
  Is that obvious that's what they meant? I understood it to mean that immigrants tend to earn less (I don't have this data myself), and could drag the average down. In that case the overall average real wage could stagnate while the average real wage of every cohort increased.
  - fastball 8y ago
    I don't think people need to spell out supply and demand every time they indicate that increasing the supply of something brings down prices. In other words: yes, it is obvious.
    - Symmetry 8y ago
      The thing is, though, that while immigrants increase the supply of labor they're also consumers who increase the demand for labor. That's why you don't tend to see wages go down after exogenous immigration shocks like the Cuban boat lift in Miami. Well, non-English-speaking immigrants do actually tend to depress the wages of resident non-English-speakers somewhat but not the wages of English-speakers.
      - will_brown 8y ago
        >The thing is, though, that while immigrants increase the supply of labor they're also consumers who increase the demand for labor. Unless there is an increase in productivity, which if you read the article, would be apparent. That is increase the labor supply while simultaneously increasing labor productivity and you will see a real drop in demand for laborers which is naturally going to result in a stagnation of wages. That is the extra demand created by the wave of low wage immigrants is more than made up with the increases in productivity in that same time period. Now you have a macro economy much more efficient at concentrating wealth.
  - DataWorker 8y ago
    How much immigrants are paid is primarily a function of how many immigrants are in the labor pool. They tend to earn less because there’s a virtually unlimited supply of poor people who want to immigrate. Supply and demand impacts markets for labor, that’s just basic economics.

gregwtmtno 8y ago

I never understood this argument. More people in the country obviously leads to more labor supply but also more labor demand.

deogeo 8y ago
The extra supply is balanced by the extra demand only if exports are zero. I.e. demand for Apple devices won't increase by 10% if the US population grows by 10%. And of course making 10% more rarely requires 10% more workers - you need more on the assembly line, but not more to design the items.
- gregwtmtno 8y ago
  Those are points I hadn't considered, but what in the US, net exports are negative. Wouldn't that imply the converse effect to what you're describing?
  - deogeo 8y ago
    It wouldn't. Say someone in the US buys something made in China - how does that increase demand for labor in the US? There's some marginal US labor required for the last part of the transport, but that's it.
    - pas 8y ago
      Though thanks to the bigger market the prices can actually decrease, so living standards could increase, even if wages haven't.
      - thfuran 8y ago
        Only if they wouldn't have bought it if they hadn't moved to the US.
    - ultraluminous 8y ago
      Thee last part of the transport is not marginal in the real world. Increased local consumption drives transport, retail, marketing, etc. etc. Real life economic modeling is not a simple supply/demand, widgets made/sold chart.

moorhosj 8y ago

Women also doubled their laborforce participation rate from 30% to 60%. https://ourworldindata.org/uploads/2017/08/Labor-Force-Participation-of-women-in-the-US-1955-2005.png https://ourworldindata.org/uploads/2017/08/Labor-Force-Parti...

ebog 8y ago

This is a prime example of the Lump of Labor fallacy. https://en.wikipedia.org/wiki/Lump_of_labour_fallacy https://en.wikipedia.org/wiki/Lump_of_labour_fallacy Our best studies have shown immigration increases overall welfare. The Mariel Boatlift studies are a good example of this: https://www.jstor.org/stable/2523702?seq=1#page_scan_tab_contents https://www.jstor.org/stable/2523702?seq=1#page_scan_tab_con...