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by JackYoustra 422 days ago
Your "more supply equals lower wages" argument is demolished by top economic research. A recent NBER study calculated that "immigration, thanks to native-immigrant complementarity and college skill content of immigrants, had a positive and significant effect between +1.7 to +2.6% on wages of less educated native workers" between 2000-2019.

The economy isn't zero-sum. As Milton Friedman noted, "most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another." Immigrants create demand for housing, food, education, entertainment, and specialized services that natives often provide.

Historical evidence consistently disproves the fallacy: When women entered the workforce, it didn't cause massive job losses among men. When segregation was abolished, Black workers didn't cause mass unemployment among whites. The vast majority of Americans descend from immigrants who contributed to economic growth.

Research on H-1B visas shows that firms that get immigrant labor end up "hiring more tech workers and paying them more, because they become more efficient and sometimes scale up." In fact, studies show each H-1B worker creates approximately 1.83 jobs for native-born Americans.

The UK's Migration Advisory Committee, after reviewing studies from 2003-2018, concluded that "immigration had little or no impact on average employment or unemployment of existing workers" and "little impact on average wages."

The overwhelming consensus among economists is that immigration grows the economic pie rather than merely redistributing slices. That's why America's most immigrant-rich cities consistently have the highest wages, not the lowest.

PLEASE, I am begging you. Spend 15 minutes reading actual economic research before posting confidently incorrect Econ 101 oversimplifications. The "immigrants take our jobs" fallacy has been debunked by virtually every reputable economic study for the past 30 years. This isn't some fringe academic view. It's the overwhelming consensus of actual economists who study this for a living. Your intuition about "more workers = lower wages" seems logical but falls apart when tested against actual economic data. The real world is more complex than a supply-and-demand graph from an introductory textbook.

2 comments

Nowhere in the economic research does it explain what you are so confidently stating, that wages are, somehow, the only thing in all of economics where positive supply shocks do not matter. The arguments that tend to be made are that, on a long enough time horizon, mean wages increase because overall economic output goes up, and mean economic output goes up because there is a higher supply of available labor.
You're fundamentally misunderstanding both the economic research and my argument. No one is claiming wages are "the only thing in economics where positive supply shocks don't matter."

The research shows that labor markets aren't simple supply-demand curves because of complementary productivity effects and gains from specialization, selection effects, and, of course, demand generated by the immigrants. If you have general labor size increase, in general equilibrium with a responsive central bank interest rates will lower to keep employment tight.

This isn't about "long enough time horizons" - studies find positive or neutral effects in the short and medium term too. The fundamental issue is that your model assumes a fixed economic pie that immigrants simply divide into smaller slices, when in reality immigrants help grow the pie overall.

Okay. Which other things don't see effects from positive supply shocks? You're just restating my premise about time horizons. The pie grows, with time, if a bunch of other things happen in the right order. Wages haven't grown in two decades in the UK, your original example. So, how are you defining short and medium term? Three decades?
man idk, maybe it was the long conservative rule after the crash? Maybe it was the long austerity? Maybe it was the huge mass of natives that voted to crash out of an agreement with a bloc that handles over 80% of their trade?

More seriously...

- for US: The newest NBER IV estimates put the wage effect of all 2000-19 US immigration at +2 % for non-college natives. Show me a UK study of similar vintage that finds anything near –2 %.

- for UK: UK real wages tracked productivity one-for-one after 2008; BoE and NIESR pin that on capital deepening, Brexit and austerity. Not on immigration, which the MAC finds moved wages by _at most_ –1% (aggregate, not yearly!) and the final report was ~0.1%, basically a null finding.

- We've already been through lump of labor, so I don't know why you've been banging on equilibrium.

And to finally address your time horizons: Short-run? Mariel-style shocks still show null effects. Medium-run? 2009-20 UK data flips positive. Long-run? Productivity wins. Pick your horizon. Immigration is at worst a rounding error next to TFP, which is positively associated with migration.

Happy to dive deeper, but at this point the burden of proof is on anyone claiming large negative wage effects. The best evidence, across multiple methods and countries, just isn’t there.

Got a link to that NBER study? It's not that I don't believe you or think you're making it up, but I would like to understand what instrumental variable they were using to make the claim that an increase of low skilled immigration makes wages for non-college educated natives go up.
Strawman. You're talking about wages and jobs in aggregate which wasn't my argument at all. Nothing you said addresses how my salary is affected in the industry the person is joining.

Sure, in total, other jobs may be created and growth is increased -- it's essentially a tautology.

I don't know why you think you're entitled to any particular job due to government policy, that seems like a really poor and inefficient way to run an economy.

Feels like "DOGE for thee, but not for me"