Illegal Immigrants and High School Dropouts

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Writing in The New York Times, Eduardo Porter argues that "even economists striving hardest to find evidence of immigration's effect on domestic workers are finding that, at most, the surge of illegal immigrants probably had only a small impact on wages of the least-educated Americans." He notes that Harvard economists George Borjas and Lawrence Katz, who last year calculated that illegal immigration from Mexico between 1980 and 2000 reduced the wages of American high school dropouts by 8.2 percent, have produced a revised estimate of 3.6 percent that takes into account the output-boosting effects of cheap immigrant labor.

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  1. Even if their wages have dropped, how much have prices dropped? Discounters like Wal-Mart have had a huge effect on the ability of low-income Americans to afford things. After all, who cares if your income drops 10% if prices go down 20%?

  2. “After all, who cares if your income drops 10% if prices go down 20%?”

    If prices drop (or even if they stay the same) because there is a drop in QUALITY, then I would certainly care. Quite often that is what happens – particularly when Walmart and others import merchandise from China and the rest of Asia.

  3. Here’s a story you can go look at if you’d like to know who’s opinions on this subject our illustrious Senate really finds valuable.

    http://news.yahoo.com/s/csm/20060417/cm_csm/yteitelbaum

  4. I there are 8 million illegal Mexican workers in the US that represents 8 million jobs taken away from Americans. It does not take an PhD to understand that

  5. Michael, just like the influx of women into the workplace has taken millions of jobs from American men, right? That explains our massive 4.7% unemployment rate.

    Or maybe the market actually creates jobs when new labor becomes available…

  6. Do they still award PhDs in Mercantilism, Michael?

    Damn immigrants keep sneaking into the Job Barrel. Pretty soon, it’s going to be empty!

  7. I [sic] there are 8 million illegal Mexican workers in the US [sic] that represents 8 million jobs taken away from Americans. It does not take an PhD to understand that [sic]

    Nor even to correct its ungrammatical expression.

    Actually, it almost takes a PhD, albeit not in economics, to believe it. One must, for example, believe in a static economy in which no new jobs are created or, even more absurdly, perhaps an economy so finely tuned to population growth that one job happens to be created whenever a U.S. citizen enters the job market, disappears whenever someone retires, etc.

  8. DA Wriggley’s:

    I think you are attacking a strawman. Although Michael spoke in terms of a 1-to-1 corresponsence between working illegal immigrants and “lost jobs,” I think it is clear that he was making the point that he perceives a strong correlation there.

    You can argue against the correaltion with the awesomely US 4.3% unemployment rate. Depends on how much confidence one has that that stat is accurate and not gerrymandered in some way that would render it misleading.

  9. should be:
    –correlation– and
    –awesomely low–

  10. Ghost,

    Frictional unemployment, like the poor, will be with us always. The latter because, relatively speaking, some are always at the bottom of the income and wealth distribution and thus ‘poor,’ the former because some unemployment is inevitable in a dynamic economy where people are variously entering and leaving (voluntarily or not) the job market. Can one torture data until it confesses to almost anything? Sure. But that wasn’t my point, so there may be more than one strawman under attack here.

    The strong correlation Michael believes (certainly not perceives) makes sense only in a relatively static economy in which the number of available jobs are essentially fixed and thus competition for those jobs is a zero sum game — for every winner there is a loser. True, perhaps, for any particular job, but certainly not true for the job market as a whole.

  11. Can one torture data until it confesses to almost anything?

    WHO ARE YOU CALCULATING FOR? GIVE ME A NAME!

  12. “even economists striving hardest to find evidence of immigration’s effect on domestic workers are finding that, at most, the surge of illegal immigrants probably had only a small impact on wages of the least-educated Americans.”

    I wonder what effect the illegal immigration has had on the education level of the least educated Americans.

  13. It’s been a pretty rotten deal for high school dropouts since WWII. I’m not sure I believe that the decline in the wages of a part of our society with an enormous collection of problems is entirely due to immigration. Dropouts are vastly more likely to have criminal records, chaotic families, and addiction issues than are high school graduates. Then there’s the effect of technological advances making idiot jobs obsolete anyway. Before we attribute this problem to immigrants, we’d better eliminate these other causes.

  14. Immigration itself doesn’t necessarily push wages down in the medium run, since immigrants are also consumers and add to demand across the economy, in effect creating many of the jobs they take. But illegal immigration by the very nature of compromised rights and residency status it comes with, clearly exerts downward pressure on wages.

    Does this mean that real wages would have actually gone up if all the illegal immigrants of 1980-2000 had been admitted to the country as legal immigrants instead?

  15. This article is terrible economics. No adjustment is made of COL. This blog tears it apart.

    http://tinyurl.com/phezo

    “Well, no, not exactly. What about the cost of living difference between California and Ohio? Don?t they tell you in Econ 101 and in Journalism 101 to always adjust for the cost of living?

    According to the data gathered by the nonprofit organization ACCRA, which measures cost of living so corporations can fairly adjust the salaries of employees they relocate, California has the highest cost of living in the country with an index of 150.8 (where 100 is the national norm). Ohio is below average at 95.4. So, relative to the national average cost of living, high school dropouts in Ohio average $8.77 versus $5.78 for the equivalent in California. That means they are 52% better off in Ohio.”

  16. From Eduardo Porter’s article

    Unlike California, Ohio remains mostly free of illegal immigrants.

    Now, maybe I’ve lived in unusual places in Ohio, but Hartville in the summer is loaded with what they call “migrant workers” to work the farms for the Amish and Mennonites, and I’ve got a houseful of Spanish-speaking south-of-the-border types right next store to me here in Akron. Every time I go to the laundromat, I see very recent Mexican immigrants as well. Now, I think all of these are wonderful people (except for the salsa music my next-door neighbors love to play at maximum volume, they are the best neighbors I’ve ever had at that house in the 5 years I’ve lived here), but based on my admittedly anecdotal evidence, if that part of the argument is untrue, I find the rest of Porter’s argument suspect. The blog linked by Realist is good reading as well.

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