I am not an economist, but I know that the economy is flexible and dynamic. It puts to use different amounts of capital, labor, and technology over time depending on the relative costs of the inputs to produce a given output. The economy of a given country will depend on the competition within a country and with other countries.
What this has to do with immigration is that a significant number of new workers joining the workforce can lead to more competition for jobs and depress wage pressure on employers. A significant portion of the more than a million immigrants being added legally to the population per year enters the workforce. A net increase in illegal immigrants in addition to the legal newcomers compounds the effect. High-skilled immigrants, like those graduating from U.S. universities, compete for high-skilled jobs and low-skilled newcomers like many legal immigrants including refugees and most illegal immigrants compete against similarly low-skilled Americans for low-skilled jobs.
This is why employers of high-skilled workers, e.g., high tech firms, oppose efforts to restrict the flow of high-skilled immigration and employers of low-tech workers, e.g. manual laborers hired by the agricultural or service producers, oppose efforts to restrict the flow of unskilled foreign workers.
The issue for policy makers should be whether it is in the national interest to use immigration to reduce wage pressures on employers. President Trump as a candidate spoke in favor of an immigration policy that would protect U.S. jobs for American workers. One of those policies was to better keep employers from hiring illegal workers by mandating the use of the E-Verify system to check the legal work status of new hires. As an article in the Washington Post points out, that campaign issue has faded from the immigration reform agenda because of business sector opposition.
The Post story notes that E-Verify has strong public support and has proven effective in those states that independently have made it a mandatory requirement for employers in their state. This logjam between the public interest and business interests can likely be broken only if a significant number of Democratic legislators join with pro-reform Republicans in order to restrict the foreign worker flow in the interest of benefiting U.S. workers – especially those with limited skills.
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What’s baffling is why Hispanics and blacks, who are negatively affected by the lowering of wages due to immigration, continue to follow the “leaders” like Obama and others who not only support the present very high levels of immigration but want to increase it. Blacks and Hispanics are those mostly likely to fill the lower skilled positions, for whatever reasons. Liberals insist that we must pass laws for a minimum wage of $15 an hour. The easiest and most effective way is to remove the immigration factor and wages will surely and inevitably rise. It’s not even a debatable question. Supply and demand.
If mass immigration was bad for business, it would be stopped tomorrow. The fact is that business sees itself as entitled to workers at the price they want to pay. Can you go into a business and tell them you only want to pay fifty cents on the dollar? But it’s ok if they rig the system to get minimum wage workers who end up making the taxpayers pay for the costs of actually supporting their large families.
And all the predictions are that many jobs, up to a third, will become automated in the next 20 years. You can see it already. Go to many stores and see how self checkout lanes have replaced half the cashiers. Nor are all boomers ready to retire. The youngest are only 54, born in 1964, and almost half say they will need to work at least part time into their 70s. Not want to, but will need to.
In the irony dept., it doesn’t come any better than Obama’s signing with Netflix to produce material that he says will be “based on the rule of law”. Uh what? The guy whose policies basically stopped all deportations from the interior of the country? Democrats say feel free to ignore our immigration laws. We’ll reward you with citizenship. Obama also never ever failed to immediately stick his nose into whatever racial controversy came up, inevitably blaming law enforcement without knowing the facts. Not that the facts matter to him.