Tuesday, November 26, 2013
Immigration and the Myth of Plummeting Wages, Addendum 2
The reason that immigration doesn't push down wages is essentially two-fold (not to mention exceedingly elementary). a) Immigrants don't just alter the supply side of the curve. They also alter the demand side of the curve in that they obviously require a great many goods and services (it's like, what, the racists on the hard right and the hard left think that these people grow all their own food, sew all their own clothes, refine all their own gasoline, don't pay rent, etc.?). And b) the jobs that these immigrants tend to fill are different from the ones that native born workers tend to fill (immigrants tending to fill either unskilled manual labor or highly skilled STEM positions), a reality that seemingly makes them much more complimentary than competitive. I mean, I know that this is a little bit more nuanced that the typical Keynesian sledgehammer approach of only looking at aggregates and all but sometimes you really do have to disaggregate in order to get to the reality of the matter - http://economics.ucdavis.edu/people/gperi/site/papers/rethinking-the-effect-of-immigration-on-wages.............And there is ZERO evidence, none whatsoever, that immigration causes unemployment. In fact, this is the one area in which pretty much every researcher agrees upon (the total increase to the American economy due to immigration has recently been estimated as somewhere between 40 and 200 billion dollars per annum).