Illegal Immigration Depresses Wages, Just as Slavery Did
The parallels between the wage effects of slavery and illegal immigration.
In previous essays, I explored how slavery not only stole the liberty of the slave, but also impoverished other Southern whites by depressing their wages to below the payment demanded by slaveowners to rent out their slaves to do the same work. In this essay, I’ll explore how, just as competition from slaves drove down the wages of other free whites, today’s competition from illegal immigrants (who must often accept very low wages) drive down the wages of American citizens.
A 2020 Congressional Budget Office report concludes that “Among people with less education, a large percentage are foreign born. Consequently, immigration has exerted downward pressure on the wages of relatively low-skilled workers who are already in the country, regardless of their birthplace.”
Just as abolishing slavery boosted the wages of white Southerners, so too reducing low-skilled illegal immigration boosts the wages of Americans who would otherwise do the same jobs. As Peter Beinart wrote in 2017:
According to a comprehensive new report by the National Academies of Sciences, Engineering, and Medicine, “Groups comparable to … immigrants in terms of their skill may experience a wage reduction as a result of immigration-induced increases in labor supply.” … By some estimates, immigrants, who are poorer on average than native-born Americans and have larger families, receive more in government services than they pay in taxes. According to the National Academies report, immigrant-headed families with children are 15 percentage points more likely to rely on food assistance, and 12 points more likely to rely on Medicaid, than other families with children.
But after the Trump Administration’s more restrictive immigration policies went into effect, the Economist reported:
In both 2018 and 2019 nominal wages rose by more than 3%, the fastest growth since before the recession a decade ago. Americans at the bottom of the labour market are doing especially well. In the past year the wages of those without a high-school diploma have risen by nearly 10%. Intriguingly, this has come as America has turned considerably less friendly to immigrants, who are assumed by many to steal jobs from natives and lower the wages of less-educated folk. The two phenomena may be connected … For the first time in half a century America’s immigrant population appears to be in sustained decline, both in absolute terms and as a share of the total. Net migration to America (ie, the difference between people arriving and people leaving the country) fell to 595,000 in 2019, the lowest in over a decade. This is a profound shift in a country which has often prided itself on its openness to outsiders. The number of highly qualified immigrants continues to rise. San Francisco airport remains just as crammed with Allbirds-and-gilet-wearing tech investors from all over the world. It appears instead that the overall decline in the foreign-born population is a result of falling numbers of low-skilled migrants. Those numbers slumped a decade ago because of the recession that began in 2007, changing demographics in Mexico and tougher border policing. More recently the number of low-skilled migrants appears to be in decline again. That is probably a consequence of policies implemented by President Donald Trump … Gordon Hanson of Harvard University suggests that if the impact of reduced low-skill migration is showing up anywhere, it will be in three particular occupations: housekeepers, building-and-grounds maintenance workers, and drywall installers. These occupations rely heavily on immigrant labour and the services they provide cannot be traded internationally. Average wages in those occupations are rising considerably faster than wages in other low-paid jobs, according to calculations by The Economist. Intriguing evidence also shows up geographically. According to research by William Frey of the Brookings Institution, a think-tank, five big metro areas saw absolute declines in their foreign-born populations in 2010-18. Wages in those areas are now rising by 5% a year, according to our calculations. Cleveland, which is in one such area, has pockets of severe poverty but seems to be doing better than before.
The negative effects of illegal immigration on the wages of lower-income Americans were recognized by celebrated Hispanic labor leader Cesar Chavez, who in the 1970’s made enforcement of border controls to prevent illegal immigration a central focus of his campaign to increase the wages of union members — because illegal immigrants were often hired when legal workers went on strike. This recalls Bernard Mandel’s description of how the movement to limit working hours to ten hours a day prior to the Civil War was inhibited by competition with slave labor. In his book Labor: Free and Slave, Mandel writes of those times in the South:
The ten-hour movement never achieved the dimensions that it did in the North, and had little possibility of success in those circumstances. When the journeymen bricklayers of Louisville were struggling for the ten-hour system, they met an insuperable obstacle in the fact that they were replaceable by slaves, so they had to work as many hours as the slaves or abandon their trade. The stonecutters were able to win the ten-hour day because no slaves were employed in that occupation. But when the carpenters and painters called a strike for shorter hours, it was broken by the employment of slaves on their jobs … Thus “slavery triumphed over freemen.” … As the London Times expressed it, “The real foundation of slavery in the Southern states lies in the power of obtaining labor at will at a rate which cannot be controlled by any combination of labourers.”
So slavery, besides significantly lowering the wages of whites, thwarted organized labor in the South as well, just as illegal immigration did the same when Cesar Chavez opposed it a century later.