> curbing immigration is an actual solution to the problem.
Curbing immigration won't be a solution to the problem; it's just a highly visible one. Each immigrant that is looking for a job in the US is taking one away from the supply for an American. That is how the Trumpistas see things.
Economically, sure, that's true. The immigrants take jobs from the labor supply. What people don't see is that aside from ones on skilled visa programs is that these jobs are either 1. underpaid by minimum wage or 2. not jobs that these people actually want anyway, so at worse you will see a lot of inflation, or a lot of open job positions. It doesn't make sense, but it won't really make sense.
> Economically, sure, that's true. The immigrants take jobs from the labor supply.
That's not actually true, though. Every immigrant who comes here and becomes employed is, of course, filling a slot that is no longer available to a native-born citizen. However, he or she will also be one more person who needs to be fed, clothed, housed, entertained, protected, and supported. All of those create demand that adds up to substantially more than one job (about 1.2, to be exact [1]).
If there's one thing I'm taking away from this campaign and election, it's that people have big problems reasoning about systems where costs are acute and centralized and benefits are diffuse, even if on the whole they personally benefit substantially from those systems. This seems true for immigration, for climate change, for free trade, for healthcare reform.
I'm sorry if this is a really stupid question but if each person, just by being alive and buying things, creates 1.2 jobs, then why do we still have unemployment?
Shouldn't everyone be able to have a job, even if it's not one they want to do? Is the problem just that they lack the qualifications for the jobs?
I don't know the answer to your question, but I don't think it's stupid. We should trust our sniff tests on these types of studies more often, especially when there is a potentially not-too-distant political, economic, or social consequence attached to the conclusion.
I personally think this is a common tactic by academics -- put out something that has a clearly false-as-phrased conclusion and then get lost in a maze of dense data and opaque language, come out disoriented, and make some conclusion like this that's pretty clearly invalid if you're willing to step away. The authors somehow convince themselves that the obvious conclusion is incorrect (often by redefining words) and then accuse anyone who dares to point out that the conclusion is a sham of being a luddite and anti-intellectual.
Are those 1.2 jobs all domestic? For each resident in the US, do we create 1.1 jobs in China and 0.1 jobs in the US? I honestly don't know this (and I don't want to look it up right now), so I'm not trying to make a counterargument. Just curious.
Well yes, people lose they jobs and have to seek new opportunities. And that's good in the larger scheme of thing.
Just let's not downplay the effect it can have to have to rethink the way you earn your livelihood, it's nothing short of a personal crisis. Some people have a really hard time adapting, others not so much. But that doesn't mean government should protect you from that.
> All of those create demand that adds up to substantially more than one job (about 1.2, to be exact [1]).
So, what would an opponent in good faith say against that? Is this a well known thing among Real Economists, which is just brushed under the rug when a politician wants to appeal to people with an anti-immigration policy? Or is there more to it?
It seems to be really low hanging fruit to explain that and have massive economic boons by increasing immigration, right? Or is that not the conclusion? Because what you said is really intuitive and some politician should be able to just easily use that. Why don't Clinton/Obama say that when explaining why they're letting illegal immigrants stay?
My guess (and this is only a guess) is that this is the power of anecdote. Within certain communities, everyone knows someone who lost their job or had their business close due to direct competition with someone being paid under the table illegally. Any politician who claimed that it was a good thing would read as so clearly out of touch with lived experience that it's not worth the trouble to look past the soundbite.
It's the same sort of difficult argument as globalization and free trade. It hits you somewhere very easy to notice, so you feel like you're worse off even while you're sitting on your brand new couch watching whatever you want on demand on your 60" TV and eating your steak dinner. Making the link that all those other good things are a result of the same policy requires a small but not automatic intellectual leap that a lot of people clearly aren't prepared to make if they feel like the initial assertion doesn't pass the smell test.
Personally, I wouldn't mind inflation if all workers are paid a decent wage as a result. For far too long inflation has been too low and confined to precisely the wrong sectors (i.e. land, health care, education). It's time for workers to get their share of the action.
True if the inflation is driven by supply shocks (mid-late 1970s) or savings gluts (today). Not if the inflation is wage-driven, as in the late 1960s and early 1970s in the US.
Immigrants really don't take jobs from those who live here. They end up in jobs most natives never look for in the first place. So who do they really displace? Low skilled immigrants work more than low skilled natives, they commit less crime, they use less welfare, and they tend to marry more.
> 2. not jobs that these people actually want anyway, so at worse you will see a lot of inflation, or a lot of open job positions. It doesn't make sense, but it won't really make sense.
Is it your intuition that the labor market would not adjust to a lower supply by becoming more desirable? If not, why?
The average salary of an undocumented immigrant is $36,000[1], which is far below that of the average trump voter, a median American above $50K although he did OK with people in the $40K bracket. The only group likely to see wage increases from mass deportation are high school dropouts [2]. From Wikipedia:
Research by George Borjas found that the influx of immigrants (both legal and illegal) from Mexico and Central America from 1980 to 2000 accounted for a 3.7% wage loss for American workers (4.5% for black Americans and 5% for Hispanic Americans). Borjas found that wage depression was greatest for workers without a high school diploma (a 7.4% reduction) because these workers face the most direct competition with immigrants, legal and illegal. [3]
Assuming ALL recent-ish immigrants are all mass deported and the economy adjusts immediately, you will see a ~7.4% shift of real wages for high school dropouts making the low end of <$36K, most of which voted for Clinton anyway. You'll see almost no issue with those above this rate because they are not competing with illegal immigrants. (This makes it more likely capitalists who see wage increases for non-service positions (eg manufacturing) will automate faster to reduce costs, but I think this is a side point considering that most jobs in the US today are in the service sector and not as easily automated away.)
Of course, you could also give the suppressed income bracket a 7% tax cut and end up in roughly the same spot without mass deportation; the undocumented immigrants aren't paying income tax anyway, and this would be HIGHER than necessary because the above study takes into account legal immigration as well.
In equilibrium, people get paid according to their productivity. (That's why eg China saw such huge wage raises over the last decades.)
So, just excluding or including some more people won't change the level of pay, as a first order effect.
There's no constant demand for labour. It expands and shrinks with supply. (And even then, the federal reserve can make arbitrary large amouts of demand. They can literally print money.)
>In equilibrium, people get paid according to their productivity
But where and when has there ever been this magical equilibrium?
In the real world people get paid whatever they can get away with, and some people can get away with more than others. Telecommunications execs can price gouge you and get a bonus for it.
>For the economy as a whole, abstracting away imports and exports, we can only eat what we sow.
Exactly. And "we" after all is another abstraction. And "I" can eat what "you" sowed.
If corporations have record-high profits, while workers get stagnating salaries while housing prices raise, someone is going to realize what "we" entices after all.
I think you mean they fill labor demand or that they diminish the supply of jobs by providing labor. This however incorrectly assumes that the demand for labor is fixed. That demand is affected by supply + cost of labor and demand for goods and services. Immigrants consumer goods and pay of services so more immigrants means more aggregate consumer demand, which leads to higher demand for labor. In the end immigrants result in a net labor demand increase due to consumption. Immigrants no matter how frugal still get haircuts, buy groceries, see doctors, pay for tax help, call plumbers, by pants, go to bars, buy used cars etc.
When people are looking for jobs is great, America was founded upon immigrants looking for good working conditions. Some people will end up unemployed because they aren't able to adapt, yep, but that in the end makes production cheaper and more competitive.
The problem happens when government burdens a group of people with taxes and makes their livelihood more expensive, and becomes the cause of such inability to compete in the market. Limiting immigration is the dumb man's solution to that problem, the real solution would be a yuge cutting of expenses in order to reduce tax burden, and consequently the size of government.
And I suspect that for skilled visa programs, labour demand is actually somewhat elastic, so that one additional skilled worker creates some fraction of a new job. The supply of jobs isn't fixed.
Consider a company like Google, who doesn't hire on quotas, but just grabs all the talented engineers they can. In what sense is a visa worker taking a job away from an American, when Google will gladly hire both?
I'd mostly agree with you on this point and it's divergent from the one that the Trumpistas care about.
That said, I have seen companies that were "H-1B dependent", ie, they have paid the fees for visas to hire from outside the country, because they were able to get lower salaries from doing so even after paying the legal fees. Clearly not the Googles of the world, but they do exist.
Yeah they definitely exist. And the ratio of those vs. the Googles will affect how elastic it is. Anywhere between 0.1 and 0.9 for the elasticity sounds plausible to me (not an economist, I could be not even using the right concepts, so take that for what it's worth).
I don't think anybody is sitting at home unemployed because Google's $140k offer wasn't good enough for them.
Yes, Google might be able to hire more employees with higher salaries by poaching them from elsewhere. But that just shifts the labor shortage to some other company, it doesn't get rid of it.
The way I see it, it's bad for everyone (the employer, the Indian, the American taxpayer) when an American $100k job opportunity stays unfilled and a willing qualified Indian is working at an Indian company for $30k instead because they won't let him into the USA.
Come on, I think it was clear that by "jobs locals don't want anyway" OP was talking about low wage-low status jobs filled by immigrants instead, that would otherwise offer higher and higher salaries until the supply curve met the demand one if interest group didn't inject immigrants into the supply -at least that's kind of the trump supporter angle-.
And in your deal I can see someone getting the short end of the stick:
The employer gets lower costs and higher profits. The Indian gets a higher salary and access to infrastructure he didn't have to pay for. The local gets a lower salary, and the rest of taxpayers get one more body consuming the public services he had to pay, more people competing for housing and ~40$K less in demand for whatever he has to offer.
I often question if anyone on HN actually grew up blue collar...
Locals want those jobs. I worked them when they actually made a relatively decent wage. Now they simply are not worth my time even as side jobs they pay so little.
I was making $22/hr at 16 years old in the mid-90's as a landscaping laborer. This pay range was quite common for such jobs, and most of my co-workers were 20 and 30 somethings supporting families. Good luck getting even half that today, 20 years later.
If you started paying roofers $50/hr, you would have an unlimited pool of labor willing to take those jobs. At $10/hr I'm not interested because I can barely make a living at that rate, so it's certainly not worth the wear and tear on my health.
Unskilled immigration is largely a wealth transfer from the most vulnerable in our society to the most privileged. There is very little to be gained in these practices for the typical underskilled American - most all the benefits are accrued elsewhere in the economy.
While I think there is at least some validity to the "immigrants take local jobs" argument, it's really not the core of Trump's immigration platform. At the moment, the "took our jorbs" element is primarily being addressed by criticism of free trade.
First, Trump is not anti-immigrant. Two of his wives have been immigrants and the new First Lady-elect (?) is an immigrant with a very noticeable accent.
Trump is not anti-immigrant, he's anti-illegal-immigrant.
Let me first say I sympathize with the plight of Central Americans and if I was in that position, either pay $20k and wait 5 years for approval, I would probably take the chances and run the border too, especially knowing my children would be U.S. citizens automatically. However, there are risks incumbent in doing that.
Illegal immigration removes our ability to process and distribute new migrants. It makes it so we can't track whether they're having a disparate or unexpected economic impact, either on the nation as a whole or on specific areas. Illegal immigrants may have trouble finding jobs without SSNs, which may cause them to resort to crime, become dependent on welfare programs, or both. An insecure border allows people with impure motives, like terrorism, to enter. There can be substantial differences in social and cultural norms, which can affect their employability and ability to assimilate. While these people are illegally crossing the border, they're already committing a major repudiation to the social order of their intended new home by mocking rule of law and entering the country without authorization.
All of these things need to be managed and that's why immigration law exists. Americans in border towns are getting overrun and there's no reason they should have to be. They're sick of it.
People usually won't admit to this because SJWs come in and accuse them of being racist for wanting to preserve their traditions, social norms, employability, and language. The election of Trump is a resounding rejection of that hostile sentiment from the self-righteous elite class.
Most Americans have no problem at all with immigrants from other cultures, races, religions, etc., as long as they are given the tools to manage, understand, and direct it so that it's not disruptive to the existing social and economic order.
What all this really boils down to is something that both Republicans and Democrats agree on: our current immigration system is clunky, slow, and expensive, and badly needs rectification. Let's focus on fixing that instead of getting at each other's throats.
Curbing immigration won't be a solution to the problem; it's just a highly visible one. Each immigrant that is looking for a job in the US is taking one away from the supply for an American. That is how the Trumpistas see things.
Economically, sure, that's true. The immigrants take jobs from the labor supply. What people don't see is that aside from ones on skilled visa programs is that these jobs are either 1. underpaid by minimum wage or 2. not jobs that these people actually want anyway, so at worse you will see a lot of inflation, or a lot of open job positions. It doesn't make sense, but it won't really make sense.