Eagle Forum Legislative Alerts

Tuesday, November 27, 2012

Immigration causes unemployment

Mark Krikorian caught leftist economist and NY Times columnist Paul Krugman making a correct economic argument:
Kudos to Adam Davidson for some much-needed mythbusting about the supposed skills shortage holding the US economy back. Whenever you see some business person quoted complaining about how he or she can’t find workers with the necessary skills, ask what wage they’re offering. Almost always, it turns out that what said business person really wants is highly (and expensively) educated workers at a manual-labor wage. No wonder they come up short.

And this dovetails perfectly with one of the key arguments against the claim that much of our unemployment is “structural”, due to a mismatch between skills and labor demand. If that were true, you should see soaring wages for those workers who do have the right skills; in fact, with rare exceptions you don’t.
That's right. It is simple supply and demand. When there is a labor shortage, wages soar.

A lot of immigration is justified by businesses claiming that we have a labor shortage in particular skills. If that were true, then we would see wages soar in specific labor markets, but we do not.

We have unemployment, not a labor shortage, and immigration is keeping the unemployment rates high.

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