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Saturday, September 05, 2015

immigration: what is to be done?

Recently, the NYT has been running the occasional article about how bad the low paid sector in the American economy is doing. Without fail, the comments sections will fill up asking, pointedly, why said article doesn’t consider immigration.
Of course, partly this is the Trump effect. But I am suspicious of the good liberal response that leaves it at that – those rednecks and racists out there, the end. After all, the immigration thesis seems kin to the Marxist thesis about the reserve army of the unemployed. And it also seems to hook up to a recurring pattern in American history, in which racism is used to undermine labor solidarity and lower wages. In the 19th and 20th centuries, mining companies would often recruit african americans to break up strikes.The unions were, at the time, extremely white nationalist. Thus, they would fall for the bait, and instead of recruiting among black laborers, they would battle with them. In the thirties, the “communist dominated” CIO unions tried to break out of this vicious circle. It was one of the reasons they became the special target of both the FBI and the AFL. In Texas, for instance, the CIO union led a successful strike of pecan shellers, who were mostly Hispanic, in San Antonio – and the leadership was mercilessly red baited.
Etc. Such is the historic background. But what is the current foreground? We know that, particularly among African Americans who have no high school degree, there’s been a collapse of earning power and high levels of unemployment. The article to go to here is Patrick Mason’s 2014 “Immigration and African American Wages and Employment: Critically Appraising the Empirical Evidence” in the Review of Black Political Economy. Mason goes over the neo-classical theory of immigration, unemployment and wages which is, I think, behind the liberal response: yes, there may be a short term downturn among “native” laborers in regard to wages and higher unemployment, but immigrants don’t simply swallow their wages, they spend them. Thus, over time, not only will the holders of native capital benefit from lower wages and higher demand, but native employment will adjust as well in an expanded economy.

Mason shows that, at least in the short term, this theory is flawed as regards African American laborers”

“If immigrants and native African Americans are substitutes, the canonical neoclassical model of immigration predicts a negative relationship between native wages and increases in immigration in the short-run, as well as a negative relationship between native participation and employment and increases in immigration in the short-run.
However, African American malewages, employment, and participation did not decline in the 1990s as the immigration share of the labor force increased. Instead, the African Americanmale employment-population ratio rose from 64%to 71%during 19931999, while mean weekly workhours increased by 2 h from 30.6 to 32.6 during the same perioda 6.5%increase in weekly workhours. Mean wages of African American males
rose from about $702 in 1993 to $866 percent in 2002.”
“The labor market outcomes of African American males did decrease during the 2000s, but this was a period of much slower immigration than during the 1990s. Rather than immigration, the recessions of 20012002 and 20072009 appear to the primary factors pulling down the employment, participation, and wages of African American males.”

However, these correlations don’t exactly give us our solution. Perhaps immigration in the 90s was a clog on the even further rise in African American wages and employment, and similarly wei ghed on same in the terrible Bush years. As for the post 2008 years, the climb upward has been extremely slow. Low skilled black male laborers have in effect lost 12 years, more than a decade, of economic gains.

As I said above, we can’t really take unskilled black laborers as proxies for the unskilled native labor market, because there has always been a racist quotient – the difference between white and black wages.
An overview paper by Harry Holzer at the Migration Policy Institute attempts to mediate among various conflicting studies. On the one hand, we have George Borjas, a Harvard economist who claims that there are substantial costs to low income native workers that accrue from the availabilty of immigrant labor. On the other, there is the work of David Card, at Berkeley, who disputes that conclusion. Interestingly enough, a study by Patricia Cortes takes the question and turns it upside down: who benefits most from the lower prices and wages that are the effect of immigrant labor?

“She argues that highly educated or high-income consumers benefit more because they use more ‘immigrant intensive’ products (like child care, restaruant foood, landscaping, and the like) than do lower income consumers. Furthermore, Cortes calculates that since immigrants also lower the wwages of less educated US workers (with much bigger negative effects on earlier immigrants than on the native-born), the net effects of immigration overall are positive for the highly educated and negative for the less educated, though both magnitudes are modest.”


From the working class perspective, then, what is to be done?

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