The law of supply and demand suggests that an increase in immigrant labor will lower wages. That’s what opponents of increased immigration (including opponents of Rubio-style “comprehensive” reform) say. For decades, the major bit of discordant data has been Prof. David Card’s study of the Mariel boatlift — a “natural experiment” in which 125,000 Cubans landed in Miami in 1980. Did they suppress local wages? Card found that they didn’t — a counterintuitive finding often cited in surveys of the academic debate on immigration, such as this New York Times Magazine article
Card documented that blacks, and also other workers, in Miami actually did better than in the control cities. …
Not so fast! Prof. George Borjas, whose work tends to uphold the conventional supply-demand view, has just gone back and reexamined the Mariel data, looking specificially at what happened to less-skilled workers (high school dropouts). It turns out they took a beating!
The absolute wage of high school dropouts in Miami dropped dramatically, as did the wage of high school dropouts relative to that of either high school graduates or college graduates. The drop in the relative wage of the least educated Miamians was substantial (10 to 30 percent). … [E.A.]
Card may have missed this because he lumped high school dropouts in with high school graduates, whose wage was unaffected. (At least 60% of the Marielitos were in the lowest skilled, high-school dropout group.)
Borjas also compares Miami’s experience with cities that had similar growth patterns before the Mariel labor “supply shock” (as opposed to Card’s “control” cities, which were chosen partly because they had similar growth patterns after the shock). Borjas finds “the relative decline in the wage of low-educated workers in Miami is much larger when we compare Miami to cities that had comparable employment growth.” It makes sense that if wages in Miami went down, but you compare Miami only with cities where wages also went down, you’ might miss some of the relative Miami decline.
In both academic and political terms, this is a BFD. It looks like the law of supply and demand works. More immigrant workers translates into lower wages. The most conspicuous, unassailable finding to the contrary has apparently just been demolished. A major prop in the arguments for greater low-skilled immigration (including arguments for amnesty) –‘What about Mariel?’ — would seem to have disappeared, though the other side has yet to be heard from. (And they will be heard from.) Borjas’ study only just went public.