I’ve always felt that one of the most convincing ways to win an argument is to spotlight instances of sources that normally oppose one’s positions actually agreeing with them. And I just stumbled onto an especially startling example that appeared about a year ago in the The Economist.
It’s often valid to view such dated material as old and therefore irrelevant news. But in this case, The Economist‘s February, 2020 feature titled “Immigration to America is down. Wages are up. Are the two related?” really is a landmark still worth examining, and for at least three reasons.
First, if there’s a single set of policies identified with this British magazine it’s staunch support for free trade. In fact, The Economist was founded in the mid-19th century precisely to convince the United Kingdom to dismantle its longstanding tariffs. Not surprisingly, the magazine has also always backed the freest possible immigration flows.
Second, February, 2020 was just before the CCP Virus and the massive economic shutdowns it triggered swept over the United States. So The Economist was commenting on trends when the economy was normal by most definitions, and after three years of Donald Trump’s presidency.
And third, of course, even though a substantial return to a pre-virus normal economic normality is now widely expected sometime this year (whether or not President Biden’s virus relief bill and other “Build Back Better” programs are fully enacted or not), the new U.S. administration clearly is determined to turn the immigration spigots back on.
So it really was pretty startling to come across an Economist article leading off with this paragraph:
“In both 2018 and 2019 [U.S.] nominal wages rose by more than 3%, the fastest growth since before the recession a decade ago. Americans at the bottom of the labour market are doing especially well. In the past year the wages of those without a high-school diploma have risen by nearly 10%. Intriguingly, this has come as America has turned considerably less friendly to immigrants, who are assumed by many to steal jobs from natives and lower the wages of less-educated folk. The two phenomena may be connected….”
Moreover, in recent years, “It appears instead that the overall decline in the foreign-born population is a result of falling numbers of low-skilled migrants…. That is probably a consequence of policies implemented by President Donald Trump, as well as the off-putting effects of his rhetoric on foreigners.”
Not that The Economist endorsed this proposition wholeheartedly. The article correctly notes that “many factors” lie behind these wage increases. Indeed, that’s true for most trends in the economy and elsewhere in our big, complicated world. But it turns out that most of the reasons for skepticism about immigration policy’s decisive role cited in the piece are pretty flimsy when examined closely.
For example, minimum wage increases – and their benefits – have by definition been enjoyed exclusively by lower-income workers overall in the United States. But the magazine also has found that average wages in occupations that are especially low-skill-immigrant-heavy (e.g., construction and landscaping work) “are rising considerably faster than wages in other low-paid jobs.”
In addition, The Economist cites findings from the Brookings Institution (hardly a restrictionist organization itself) that “five big metro areas saw absolute declines in their foreign-born populations in 2010-18” and its own research showing that “wages in those areas are now rising by 5% a year….”
Perhaps most important, the magazine’s initial conclusion about the connection between fewer low-skilled immigrants and higher wages for the established national low-skill workforce is qualified with the phrase “but only for a while.”
In this vein, The Economist points to research allegedly demonstrating that during and after past “occasions when America has clamped down on immigration,” the results “ultimately [offered] little benefit to native workers—and may even harm them.” Yet some of these historical episodes – e.g., the freeze and follow-on restrictions on immigration from China that began in the late-19th century, and expulsions of Mexican workers during the Great Depression of the 1930s – seem marginally relevant at best to the U.S. economy today.
Even odder, the overarching lesson drawn by The Economist from this and related studies supports a claim made by current-day restrictionists (like me) that wide-open immigration policies retard productivity growth by enabling many industries to use cheap labor as an earnings- and profit-making or boosting crutch, rather than innovate their way to greater success.
According to The Economist, “In the short term, native workers may well see a wage boost as labour supply falls. But businesses then reorient production towards less labour-intensive products; natives take jobs previously occupied by foreign-born folk, which may be worse paid; and bosses invest in labour-saving machinery, which can reduce the pay of remaining workers.”
Yet logically, anyone supporting this position logically must also think that improving productivity and promoting technological progress doesn’t ultimately benefit entire economies – including workers initially displaced. Is The Economist really supporting such stick-in-the-mud-ism?
The answer, strangely, as readers learn in the very next paragraph, is “Of course not.” Because the article proceeds to claim that “Both low- and high-skilled migration are linked with higher productivity.” In other words, higher productivity is a long-run economic blessing after all, and it’s improved both by reducing and increasing low-skill immigration. Got that?
Of course, change at a single magazine, no matter how influential, is no guarantee of policy change. But such publications aren’t often called opinion leaders for nothing. And although rhetorically, the Biden administration seems as set as ever to supercharge U.S. immigration flows, maybe it’s no coincidence that its recent stance on the southern border looks every bit as confused as this Economist take on immigration.