labor economics

12 Apr 2006

AC makes a bold assertion:

Mass immigration, be it illegal or legal, displaces workers and depresses wages

There is no reason to believe this is true. Or, at least, I’d love to see AC support the claim.

First: There is no basic, “Economics 101”, reason that immigration would depress wages. Economies are made of people. If you add people to a market, is the only thing they add labor? Of course not, that’s stupid. They add labor and they also add consumption. People that work also need to eat, drink, and shop for quality pornography. They demand things. Who provides things that are demanded by new people? Uh.. other people. So anyways, the snotty assertion you often see (though not from A.C.) that anyone that knows basic economics can see that immigration would depress wages is not only failing to realize we don’t live in an Econ 101 world, they are failing to understand .. well, Econ 101.

As a hypothetical example to demonstrate how ridiculous this idea is: imagine a growing city like, say, Nashville. Does Nashville discourage people from migrating to Nashville because they will drive down wages? Of course not. In fact, cities tend to do the opposite: they try to attract people. But won’t that dwindle the labor market until we’re all working for peanuts?

In any event, misunderstandings aside, it’s clear that we don’t live in an Econ 101 world. There’s no empirical evidence, however, to support the idea that there are any structural forces imposing themselves on the free market that would cause immigration to depress wages. There are structural forces, however, that could cause illegal immigration to depress wages. For example, oh, I don’t know, labor law. Libertarians take heed, this is right up your alley: if you want to find the source of our immigration woes, look no further than government intervention. The class of lower-grade, cheap labor that drives down wages is not a product of immigration itself – it’s a product of our fucked up, draconian, yet impractical and impossible-to-enforce immigration law.