'They terk er jerbs!' Do immigrants really drive down wages?


I'll say this just to make my point clearer: I'm talking about the United States and its Latin American immigration, not Europe, and I'm focusing on the economic effects of immigration, so I'll be avoiding any discussion of the usual Trumpian rhetoric and xenophobic canards about drugs, crime, rapists, and whatnot. The Sentencing Project has already released a report demonstrating that 'foreign-born residents of the United States commit crime less often than native-born citizens', simple observation and deduction show that with any population transfer, the absolute crime rate may increase, but the relative crime rate will probably stay the same (and this is an important distinction to understand), and frankly, if you were an immigrant, wouldn't you have an incentive to avoid deportation by, say, not committing crimes, which generally increase your likelihood of being deported?
And what about immigrants being lazy? That stereotype is rooted in age-old ethnic stereotypes of Hispanics, and especially Mexicans, which can be refuted easily by studies showing that immigrants on average work harder than native-born citizens.
So these two myths are instantly busted.
But do they, as the 'pissed-off white redneck conservatives' like to say, 'take our jobs'? Or, as a slightly more economically literate nativist might say, 'drive down our wages'?
Let's apply a little economic reasoning here:
As I've shown, immigrants are, by and large, labourers. And since wealth is derived from labour (Kevin Carson has an excellent defence of this position in Chapter 1 of his Studies in Mutualist Political Economy, which can be read here), additional labour means additional wealth. Furthermore, as immigrants are necessarily, as with all of us, consumers of goods, they create additional demand, and where there is more demand, as any economist will tell you, more supply comes to meet it. This additional supply means that prices go down to achieve equilibrium. It should be clear that these prices don't lower just for immigrants, but for everyone across the board. So right off the bat, we have immigrants making things better for everyone!
So whence the idea that immigrants 'steal' jobs and depress wages?
Employers, generally seeking to maximise profits, see immigrants, especially undocumented immigrants, as a source of cheap labour. They can pay documented immigrants minimum wage, as most immigrants are glad to even have a job, and that's equally true for undocumented immigrants, who they can pay even less than minimum wage, as the lack of documentation puts them outside of regulation. Hence the effect of wages in general being depressed and native-born workers being fired.
But is this the immigrants' fault, or is it the employers' fault?
Ultimately, it's the employers' decision to pay these lower wages and fire native-born workers. (Mainstream neoclassical economics seems to have a tendency to treat questions of unemployment, low wages, and poverty as matters of personal responsibility, but then treat employers mistreating their workers as helpless subjects of uunbreakable 'laws' of economics. I wonder why that is...)
There's no gun being held at employers' heads forcing them to pay lower wages. The only reason for that happening is the desire to get higher profits in the short term.
Trump wants to punish immigrants for seeking jobs over here and punish employers for simply hiring immigrants. This is not a policy that will keep citizens' wages high. The real solution is to punish employers for not paying immigrants, documented or undocumented, the equivalent of a native-born citizen's wages for the same amount of work.
It's worked in the past numerous times in various countries during nearly each major immigration wave of the last century. What's so special about the present that it can't work now?

1 Comments

How do you stretch your Achilles?  

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What's up, yes this paragraph is truly fastidious and I have learned lot of
things from it on the topic of blogging. thanks.

2017-07/23 (Sun) 09:51 | REPLY |   

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