No impact on wages or jobs.

Sabri Ben-Achour: When it comes to the economics of immigration, there is the big one: immigration and its effect on wages and jobs. So let’s start there. Does immigration reduce wages?

Zeke Hernandez: The short answer is no. I understand that that’s a big question, but we have enough evidence to know that the answer is no. Immigration doesn’t cause job losses, either, for native workers.

Ben-Achour: I have a feeling many people are asking, “Why not?” How does it not?

Hernandez: Yeah, and that’s exactly the right question. Because it seems surprising. Let’s start with the big picture: What goes into job creation? Or you could even think economic growth more broadly, right? And that’s going to be a function of, yes, the number of workers in the economy, but also a lot of other things, like the amount of investment in the economy, the number and the quality of new ideas that people have, the number of new businesses that people start because of the ideas, the new technologies that are introduced into the economy, the amount of demand, the variety of goods and services that are demanded. So all of those are the ingredients that go into creating jobs and growing an economy. And the short of it is that the evidence tells us that immigrants contribute positively to all of those ingredients. That is, immigrants, when they settle in a community, that community receives a lot more investment. When immigrants arrive, there are not just more workers that are competing with native workers, but there are more people who demand housing, entertainment, food, education. And so you need to hire more people to satisfy that bigger demand. Immigrants disproportionately start businesses and those businesses create jobs.

The remaining question for someone who’s listening to me might be, “But wait a minute: If there are more immigrants in my neighborhood, or my state, or my country, doesn’t that mean more immigrants competing for the same jobs, which will either take my jobs or lower my wages?” And surprisingly, the evidence shows us that that’s not the case. And we have evidence from lots of different studies on that. And some of them show what happens when there’s these big, unexpected influxes of, say, refugees, or a lot of workers that show up in a place. And some of them look at more regular migration. And they all agree that immigration, that doesn’t take away jobs from natives. And it tends not to lower wages. There are sometimes some exceptional drops in wages for a little bit, but those recover very fast. So why would that be the case? One is, like I said, when you have these newcomers, they’re also growing the economy. So it’s not just the supply of workers that increases, but the demand for other things also increases, which means the economic pie is bigger, which is why there’s not zero-sum competition.

The other reason is that someone who’s worried about immigrants taking jobs or lowering wages is often assuming that an immigrant worker is identical to a native worker. But they’re not. For example, we know that immigrants take and want different jobs — for example, in farms, in factories and construction that natives simply won’t do. The other thing is that even for cases where an immigrant and a native might be working in the same sector, say like construction, immigrants bring different skills and natives have different skills. And so the immigrant might allocate into, say, the manual part of the construction job that doesn’t require language skills, because maybe the immigrant doesn’t speak English well. And that means that the native will kind of allocate into, say, becoming the foreman, where he can use his language skills. And so then you don’t get that direct competition for those two reasons.

Ben-Achour: Some people will say, “It’s not that natives won’t do jobs. It’s just that, you know, we have to pay them more to get them to do those jobs. So we don’t actually need immigrants to do them.”

Hernandez: Yeah, I understand. Again, we have no evidence to support that. And in many sectors, we do have very clear evidence that natives simply will not do the jobs. I’ll give you an a pretty extreme example that makes the point. So Michael Clemens has a study looking at North Carolina farm jobs in 2011. In that year, because of the aftermath of the financial crisis that North Carolina was still suffering, there were half a million unemployed North Carolinians. And there were 6,000 job openings in North Carolina farms. Out of those 6,000 jobs, there were 268 applications from native workers. Of those, all were hired, 163 of them showed up to work and only seven finished the harvest. So that’s pretty stark, right? I mean, that’s not a matter of, like, you know, payment or competition. That’s just a matter of, like, there’s a job that nobody wants.

I’ve also spent a lot of time talking with factory managers in the Midwest, in Milwaukee and in other states around there. And consistently, the story they tell me is they actually would prefer to hire native workers who speak English, they tell me it’s much easier. But they can’t. They just can’t get them to work. If they work, they can’t get them to stay in the job. And so they end up resorting to the immigrant labor market. And so, part of the assumption is that, again, a worker is the same whether they’re a native or not, but even employers would prefer native workers because it’s less hassle, but they just can’t find them.