One general rule-of-thumb I've heard, regarding immigrations' impact on wages is that there's a difference between manufacturing and service jobs. Immigrants increase both the supply of labor (because they work) and the demand for labor (because they increase the total size of the economy and buy stuff themselves). In the service sector, the demand effect overwhelms the supply impact, and vice-versa for manufacturing.
Imagine a 100K Canadians suddenly migrate into Reno. If you own a coffee shop, you suddenly have 100K new potential customers. You can sell more coffee, charge more, open another branch, and even specialize products that appeal to the new Canadian cohort. This tends to increase wages.
What's going to happen at Tesla, though? Probably a drop in wages. The immigrants will increase the size of economy, but Tesla won't suddenly ramp up their production or double the size of their factory. They might do that in the a year or so, but the size of factory is fixed in the short run, so wages will fall.
That said, I can't help but think that the economic arguments are smokescreens for cultural preferences. It's the one debate where conservatives are suddenly a lot more skeptical of markets and liberals suddenly care a lot more about GDP growth.
Excellent comment. I guess I feel less worried because the vast majority of jobs in the US are in service, and there will be even more such jobs in the future as Boomers age. And one area in manufacturing where lots of immigrants work--construction--will hopefully continue to grow if we ever manage to start constructing more housing.
That's a good point, and things can get tricky there. Let's say immigration does lower the wages of construction workers, but leads to a lower number of houses. You can take the "labor purist" position and say, screw it, wages over everything, even if that means a worse economy for everyone else. Or the "GDP purest" and say, screw it, we're trying to maximize the size of the economy, even if that means one group sees their standard of living decline. Unfortunately, it's really just a tradeoff. I don't think we should pursue GDP at all costs, but having more homes (or more things manufactured) its very valuable. But I also think economic growth is pointless if it doesn't lead to shared prosperity.
This is a thoughtful and thought provoking article about a truly worrisome issue - that sits at the heart of what it is. to be American. At the outset, it meant to be from somewhere else. (Just ask the native Americans!)
One general rule-of-thumb I've heard, regarding immigrations' impact on wages is that there's a difference between manufacturing and service jobs. Immigrants increase both the supply of labor (because they work) and the demand for labor (because they increase the total size of the economy and buy stuff themselves). In the service sector, the demand effect overwhelms the supply impact, and vice-versa for manufacturing.
Imagine a 100K Canadians suddenly migrate into Reno. If you own a coffee shop, you suddenly have 100K new potential customers. You can sell more coffee, charge more, open another branch, and even specialize products that appeal to the new Canadian cohort. This tends to increase wages.
What's going to happen at Tesla, though? Probably a drop in wages. The immigrants will increase the size of economy, but Tesla won't suddenly ramp up their production or double the size of their factory. They might do that in the a year or so, but the size of factory is fixed in the short run, so wages will fall.
That said, I can't help but think that the economic arguments are smokescreens for cultural preferences. It's the one debate where conservatives are suddenly a lot more skeptical of markets and liberals suddenly care a lot more about GDP growth.
Excellent comment. I guess I feel less worried because the vast majority of jobs in the US are in service, and there will be even more such jobs in the future as Boomers age. And one area in manufacturing where lots of immigrants work--construction--will hopefully continue to grow if we ever manage to start constructing more housing.
That's a good point, and things can get tricky there. Let's say immigration does lower the wages of construction workers, but leads to a lower number of houses. You can take the "labor purist" position and say, screw it, wages over everything, even if that means a worse economy for everyone else. Or the "GDP purest" and say, screw it, we're trying to maximize the size of the economy, even if that means one group sees their standard of living decline. Unfortunately, it's really just a tradeoff. I don't think we should pursue GDP at all costs, but having more homes (or more things manufactured) its very valuable. But I also think economic growth is pointless if it doesn't lead to shared prosperity.
This essay should go to whomever in US government that thinks rationally.
(o wait)
Sigh. All we can do is keep trying!
This is a thoughtful and thought provoking article about a truly worrisome issue - that sits at the heart of what it is. to be American. At the outset, it meant to be from somewhere else. (Just ask the native Americans!)
Well said! Nearly all of us are immigrants or the descendants of immigrants, after all.
Yesssss I love this use of the collage!! ❤️
Thank you so much for letting me use it! I thought it was the perfect way to commemorate our getting permanent residency!