Who Are You Rooting For, Mr. President?


Joe Young

- High-skilled workers settle in places where skills are most valued. A country attracts highly-skilled workers when it gives a high rate of return to skills in comparison to other countries. A country that subsidizes low-skilled labor will attract low-skill workers. This is what the U.S. is doing nowadays, opening its doors to unskilled labor.
- We are witnessing today a slowdown in the economic assimilation of immigrants. The larger the immigrant group, the slower the assimilation. Large-scale immigration today leads to the formation of “ethnic enclaves.” What immigrants needed to do in the past to improve their economic status (like learning English, moving to a different town, changing occupations) is no longer necessary. Current immigrants believe they are doing well WITHIN these enclaves.What we learn from this is that immigrant groups that are largest in size in the U.S. assimilate at a slower rate. This applies to Mexican immigrants, the largest immigrant group in the U.S. today.
- Today’s immigration generates losers and winners. The losers are the American workers. The winners are both the immigrants and the employers of immigrants. It is a simple equation: when immigrants come in, the wage of competing workers goes down. Look at it from a supply and demand perspective says Borjas: immigration’s supply of workers leads to the price of labor going down. Conversely, for a particular group of labor that does not include immigrants, the price of labor goes up. So, American workers are the big losers today. American employers of immigrants share the winning stand with the immigrants.
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