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"Immigration’s impact on wages, especially in the long term, is not as straightforward as “less supply → higher pay.” "Restricting immigration might reduce com

by bruceb 1y ago

"Immigration’s impact on wages, especially in the long term, is not as straightforward as “less supply → higher pay.” "Restricting immigration might reduce competition in some low-skill job markets, but it can also harm industries that rely on labor shortages being filled" So restricting immigration of low wage workers, would push up wages in low wage industries. Seems pretty clear.

kacesensitive 1y ago
You’re describing a narrow, short-run, partial-equilibrium effect. In the real world, general-equilibrium effects swamp it: Cut low-wage immigration and you don’t just raise some hourly rates. You also shrink output, kill complementary jobs, and push prices up for everyone, which erodes those wage gains. The National Academies’ comprehensive review finds immigration’s impact on native wages is small overall and often positive for some groups, with clear long-run growth benefits. https://nap.nationalacademies.org/catalog/23550/the-economic-and-fiscal-consequences-of-immigration https://nap.nationalacademies.org/catalog/23550/the-economic... Classic natural-experiment evidence like the Mariel Boatlift shows big low-skill inflows had essentially no hit to local low-skill wages. Labor markets adjust. https://davidcard.berkeley.edu/papers/mariel-impact.pdf https://davidcard.berkeley.edu/papers/mariel-impact.pdf Meta-work by Peri and coauthors show across many settings, native wage effects are near zero, while immigration raises productivity and lets natives move up the job ladder. https://giovanniperi.ucdavis.edu/uploads/5/6/8/2/56826033/peri_do-immigrant-workers-depress-the-wages-of-native-workers.pdf https://giovanniperi.ucdavis.edu/uploads/5/6/8/2/56826033/pe... Recent CBO work attributes stronger labor-force growth and higher GDP to immigration. Reverse that and you get slower growth and upward price pressure that cancels your “clear” wage story. https://www.cbo.gov/publication/60569 https://www.cbo.gov/publication/60569 So yes, if you freeze the rest of the economy in place, fewer workers can bid up some wages. Once you allow demand, complementarities, and prices to move, the simple “less supply → higher pay” slogan stops matching the data.

by bruceb 1y ago

kacesensitive 1y ago

You’re describing a narrow, short-run, partial-equilibrium effect. In the real world, general-equilibrium effects swamp it: Cut low-wage immigration and you don’t just raise some hourly rates. You also shrink output, kill complementary jobs, and push prices up for everyone, which erodes those wage gains. The National Academies’ comprehensive review finds immigration’s impact on native wages is small overall and often positive for some groups, with clear long-run growth benefits. https://nap.nationalacademies.org/catalog/23550/the-economic-and-fiscal-consequences-of-immigration https://nap.nationalacademies.org/catalog/23550/the-economic... Classic natural-experiment evidence like the Mariel Boatlift shows big low-skill inflows had essentially no hit to local low-skill wages. Labor markets adjust. https://davidcard.berkeley.edu/papers/mariel-impact.pdf https://davidcard.berkeley.edu/papers/mariel-impact.pdf Meta-work by Peri and coauthors show across many settings, native wage effects are near zero, while immigration raises productivity and lets natives move up the job ladder. https://giovanniperi.ucdavis.edu/uploads/5/6/8/2/56826033/peri_do-immigrant-workers-depress-the-wages-of-native-workers.pdf https://giovanniperi.ucdavis.edu/uploads/5/6/8/2/56826033/pe... Recent CBO work attributes stronger labor-force growth and higher GDP to immigration. Reverse that and you get slower growth and upward price pressure that cancels your “clear” wage story. https://www.cbo.gov/publication/60569 https://www.cbo.gov/publication/60569 So yes, if you freeze the rest of the economy in place, fewer workers can bid up some wages. Once you allow demand, complementarities, and prices to move, the simple “less supply → higher pay” slogan stops matching the data.