For example: Why economic measurement of the effect of immigration on poor Americans is wrong.
From an economic point of view, immigration is good because it encourages specialization and thus efficiency. In a low-immigration world, an American accountant might have to pay $25 or $30 an hour for yard services by American-born landscapers. At that price, she might choose to do the yard work herself. If higher immigration lowers the price of landscaping work to $10 to $12 an hour, she may hire a landscaper and devote her newfound free time to extra accounting work. Instead of leaving the office at 5 p.m. to cook dinner for her family, she can stay until 6 o’clock and order from Postmates as she drives home. Or she can buy more services than she otherwise would. A lower bid from an immigrant-employing contractor might allow her to renovate her kitchen this year rather than postponing it to next year.
But all of this only happens because lower-earning immigrants displace the Americans who used to do the work at higher costs. You may ask, “So what happens to those displaced Americans?” The economist’s answer is that, pressed by immigrant competition, displaced American workers are driven to “upskill.” Perhaps a former landscaper learns some Spanish, and thus can act as the foreman of a crew of immigrants. Perhaps he shifts to sales or design work. Either way, the economic models say, everybody is better off.
You may further ask, “Does this really happen? Don’t at least some displaced American workers end up unemployed or underemployed, unable to find work at anything close to their old wage level? Aren’t both American-born men and American-born women of prime working age less likely to work today than in the 1990s?”
Yes, all of that is true. But when workers quit the workforce, they disappear from the statistical samples on which the economic models are built. Labor-force statistics count only those in the labor force. If an American-born landscaper successfully upskills to foreman, his higher pay is recorded and measured. If an American-born landscaper retires early on a disability benefit, his lower income is not recorded and not measured. From a labor economist’s perspective, he has ceased to exist. Immigration’s economic costs and benefits will be calculated without reference to him.
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