Sounds as if Eduardo Porter studied Micro with Mankiw. " > >> Wages would rise as businesses invested to take advantage >> of the expanded labor force. "
Yeah, that's all that's stopping the boom, not enough workers! Gene On Jun 25, 2013, at 10:54 AM, Jim Devine wrote: > New York TIMES / June 25, 2013, 12:15 pm > > Immigration and the Labor Market > By EDUARDO PORTER > > Are American workers are about to experience unwelcome new competition > for their jobs? The bill moving through Congress to overhaul the > nation’s immigration laws, if approved, would give employers access to > expanded visa programs that would admit hundreds of thousands of > immigrant workers, of both low and high skills, to toil in workplaces > from strawberry fields to technology companies. > > Weighing the economic claims in the Congressional debate. > > The legislation also offers legal status to millions of immigrants > working illegally across the country, and ultimately a shot at > citizenship. The change would encourage many to roam freely throughout > the economy, leaving dead-end jobs in immigrant-heavy sectors of the > labor market to seek higher pay elsewhere. > > But by many accounts, most American workers need not worry about the > prospect of hordes of workers entering the country with an eye on > their jobs. Rather, immigration is seen as more likely to leave > American workers better off. > > The latest organization to come to this conclusion is the > Congressional Budget Office, which issued a report this month > concluding that the immigration bill would add six million workers to > the American job market by 2023 and nine million by 2033 – increasing > the labor force by 5 percent. > > In the beginning, the jump in immigration would hit pay, the office > said. It expects that by 2023 average wages would be 0.1 percent > lower, on average, than they would have been absent a change in law. > > Still, most American workers would have little to worry about. Average > wages would decline to a large extent because most of the new > immigrant workers would be paid less than domestic laborers, pulling > the average down. Most importantly, the decline would only be > temporary. Wages would rise as businesses invested to take advantage > of the expanded labor force. By 2033, the C.B.O. forecast, average > wages would be 0.5 percent higher than they would have been without > the new immigrants. > > These conclusions may seem to fly in the face of the laws of supply > and demand. But they are not quite so odd. They can become obvious, in > fact, when accounting for the response of American companies, and > workers, to the inflows of foreign labor. > > The belief that immigration would simply displace American workers > relies on the assumption that employers would do nothing but replace a > costlier domestic labor force with cheaper imports. But companies > actually invest and expand to reap the higher profits that the new > labor allows. This provides new opportunities for immigrants and > domestic workers alike. > > [That is, if immigrants can't work in the U.S., businesses will move > their operations to where those folks are, produce stuff, and sell it > to people in the U.S.?] > > In other words, immigration can produce jobs for Americans, too. > Restaurants are much less common in Norway than the United States > because Norway lacks the cheap labor — making a dinner out in Oslo > prohibitively expensive. In many New York restaurants, the American > waiters and maitre d’ owe their jobs to the underpaid immigrants > working illegally in the kitchen, whose low wages allow the restaurant > to exist. > > What’s more, immigration expands productivity. Highly skilled > immigrant workers generate more productive innovations. And the influx > of new workers of a variety of skills, high and low, would promote > specialization. > > Giovanni Peri, an economist at the University of California, Davis, > and Chad Sparber of Colgate University found that American workers in > states with large shares of less-educated immigrants gravitate towards > communications-related occupations, their area of comparative > advantage, while the immigrants stick to manual tasks and physical > labor. > > This increases the growth rate of the economy and pushes wages higher. > [really??] Mr. Peri estimated that the wave of immigrants that > entered the United States between 1990 and 2007 increased workers’ > incomes by about $5,100 a year on average, in 2005 dollars. This > amounts to more than a fifth of the income gains over the period. > > There will be losers, especially among the workers most like the > newcomers. A 50-year-old janitor with no high school diploma, for > instance, will find it hard to make a transition into another job when > immigrants move into the building maintenance business. But this group > is probably small, and composed mostly of illegal immigrants already > in the workplace. > > George Borjas of Harvard University argues that those without a high > school diploma – about 8 percent of the labor force — are easily > replaced by immigrants and are likely to suffer a noticeable drop in > wages if low-skill immigration increases. Mr. Peri disagrees. He > argues that high-school dropouts could find jobs in parts of the labor > market that might even benefit from new immigrants’ arrival. > > The Congressional Budget Office looked at it differently. Rather than > split the work force by educational attainment, it sliced it into five > equal cohorts of skill, from the least educated fifth to the most. It > found that none of these groups is hurt by immigration over the long > run, in absolute terms. Some gain more, and some gain less. [no > transition costs?] > > Unskilled American workers – who never completed high school, or maybe > got an equivalency diploma — would do relatively poorly. So would > highly educated workers, who would face more competition from new > immigrant scientists and engineers with H1-B visas. > > Average wages in both these slices would decline 0.3 percent relative > to the average by 2033. The rest of workers, by contrast, would see > their relative wages rise by 0.5 percent. > > But even though the gains would not be distributed evenly, according > to the study, every group would win. “Average wages would be higher > under the bill than under current law for workers in all quintiles of > the skill distribution,” it said. > > -- > Jim Devine / "Reality is that which, when you stop believing in it, > doesn't go away." -- Philip K. Dick > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
