Diana Furchtgott-Roth vs. George Borjas

Diana Furchtgott Roth - "a senior fellow at the Hudson Institute, where she directs the Center for Employment Policy. From 2003 to 2005 she was chief economist of the U.S. Department of Labor" who appears to be a cheap labor pimp along the lines of Tamar Jacoby - offers an attempted takedown of George Borjas' black unemployment study in "The Borjas Blame Game".

She discusses several issues that I'm going to defer to economists who've studied these issues. I note, however, that she bases some of her article on studies by David Card (University of California, Berkeley) and Giovanni Peri (University of California, Davis).

Instead, let's concentrate on the parts where I know (rather than just suspect) that she's wrong:

To take a simple example, if a construction firm cannot find plasterers or stucco masons, an occupation overwhelmingly performed by foreign-born workers, it can do fewer jobs than a firm that had these immigrants on the payroll. With fewer jobs, employment of both immigrants and native-born Americans declines. Of course, some might say that the construction firm just needs to offer more money to plasterers and stucco masons, and then more native-born Americans would take the jobs. But since the price would be higher, fewer projects would be completed. So employment for native-born Americans could decline.

Given a fixed amount of money spent on house building, there will be a fixed amount of demand for stuccoing. With fewer stuccoers, that firm will need to raise wages. If those raised wages ripple upwards to the cost of houses, demand for house building might fall. It probably won't have enough of an effect, and those workers will have more disposable income. If it does have too much of an effect, that firm will need to come up with an alternative, such as an alternative to stuccoing or someone will invent a stuccoing machine. Having access to a large pool of "foreign-born workers" reduces the possibility that such a machine will be invented, retarding innovation.

Just as Italians and Germans assimilated and produced generations of tax-paying Americans and many Nobel prizewinners, so the same will undoubtedly happen with immigrants from other parts of the world.

Of course, there are huge differences between today's immigration and past immigration. That includes such glossed-over matters as Italy never having owned any part of our country, Germany being thousands of miles away instead of right next door, "multiculturalism", and on and on. Since there's no way to hold Furchtgott-Roth or her descendents responsible if she's wrong, perhaps we should do a cost-benefit analysis and determine whether the rewards from what she promotes is worth the possible costs if she's wrong.

Blaming immigrants for the incarceration rates of African-Americans is a sign of desperation.Will they next be held responsible for Iraq and Hurricane Katrina?

That would be a cute statement if it weren't for the fact that after Katrina the former residents were moved out and illegal aliens were moved in to take jobs that they should have been doing. The American public not only paid to warehouse Americans in Atlanta and Houston, they paid inflated multi-level contracts to connected contractors. And, we continued to offer welfare to NO's underclass rather than trying to get them working in, for instance, construction trades. And, those illegal aliens worked with lesser regard to safety regulations, perhaps resulting in future health problems.

In the universe of people like Furchtgott-Roth, that's considered a "market".

Comments

John S.Bolton is dead on the money.

I suppose that we could all lament the fact that the citizen cannot afford castles because of the cost of labor to build one, but by what God given right are we entitled to live in one anyway? If a castle is beyond my means, then I'll live in brick ranch, and if that's beyond my means then I'll live in a wood frame with aluminum siding, etc.

She's equivocating between less jobs connected to some particular foreign-dominated menial specialty, and jobs in general.
The use of plasterers and stucco laborers is a matter of taste and availability of various trades at relatively cheap wages.
It could be that some things don't get built because of their not being limitless supply of ever-cheaper construction labor, but that is no loss. It is no loss on net balance when low income laborers are a dead loss to import.
Her suppressed major premise is that all workers are workers only, and never net consumers; but for each step down in wages through escalation of immigrant labor supply, the worse the net public subsidy of such immigration cohorts will grow. There is nothing about snowballing immigration of menials that would decrease the net public subsidy of such immigration cohorts as they grow, and everything politically that tends toward maintaining or increasing that aggression on the net taxpayer.