Illegal Immigration: What's in it for us?

Fourth installment of no1's bitter rant
Could you show SOME evidence that the vast majority of illegal immigrants have no English language skills? Could you produce SOME evidence that proficiency in English is considered by employers of unskilled or semi-skilled labor as more desirable than a willingness to work at substantially under the normal wage rates in their industries? Thank you.

It is taking some time to come up with precise numbers for your first question. I will point out though that you are trying to twist my words. I never said "no English skills." It is not a requirement for my argument, specifically that native workers will have an advantage in finding jobs in which English-speaking is valued, that the immigrants have "no" English-skills. Only that they have worse English-skills. Now you can send me on a long search for data showing that illegal immigrants tend to have worse English skills than natives, but I don't think it is necessary. Maybe you should first find some data showing that they have nearly equivalent English skills?

As for your second question, I've already done it.

Originally posted by no1marauder
1 out of 3 students drop out of high school before graduating so I imagine it's a fairly large number. Of course, the rate is higher in urban areas like the ones used in the report you cited. http://blogs.payscale.com/salary_report_kris_cowan/2008/04/high-school-dro.html

Everybody who has "some" college is now a "skilled worker"??? Don't make me laugh.

That's the way "skilled workers" are measured. Generally, as either "some college" or "college graduation." You can take your issue with the nomenclature up with some one else.

EDIT: By the way, my own quick calculation from the BLS has less that 10% of the US labor force in 2007 composed of high school dropouts.
Compare that to nearly 61% with more than a high school diploma.
data here: http://www.bls.gov/web/cpseea5.pdf


Here's an idea. How about producing some data of your own? You've argued that US markets are so monopolistic that wage effects on prices are very small. How about backing that up? Where are you measures of market power? Where is your data on prices in immigrant-labor rich production sectors?

Until your willing to offer more than your usual piss and bile, I'm not going to waste my time. Read the paper I offered. It's well researched and tackles most of your questions.

Originally posted by telerion
That's the way "skilled workers" are measured. Generally, as either "some college" or "college graduation." You can take your issue with the nomenclature up with some one else.

Here's an idea. How about producing some data of your own? You've argued that US markets are so monopolistic that wage effects on prices are very small. How about backing tha ...[text shortened]... Read the paper I offered. It's well researched and tackles most of your questions.

Look up the relevant CPI figures for the last half century and tell me in how many years there was a price deflation. I believe the answer is "0". Is that an indication of a country with a lot of competitive markets or one dominated by oligopolies and other monopolistic features? Use your "skill" to figure that ONE out.

Originally posted by telerion
It is taking some time to come up with precise numbers for your first question. I will point out though that you are trying to twist my words. I never said "no English skills." It is not a requirement for my argument, specifically that native workers will have an advantage in finding jobs in which English-speaking is valued, that the immigrants have "no" ...[text shortened]... nearly equivalent English skills?

As for your second question, I've already done it.

I'll concede that some illegal immigrants lack equivalent English speaking skills to a native high school dropout. I doubt that it is anything near a majority or even a substantial minority though. But for the sake of argument, I'll concede that it is.

Now where did you address the second question? The study you cited seems to clearly indicate that native high school dropouts were displaced by (presumably) lesser English skilled illegal immigrants. That supports your argument how again?

Originally posted by no1marauder
Look up the relevant CPI figures for the last half century and tell me in how many years there was a price deflation. I believe the answer is "0". Is that an indication of a country with a lot of competitive markets or one dominated by oligopolies and other monopolistic features? Use your "skill" to figure that ONE out.

Wow . . . that's the best you can come up with? Look at the aggregated CPI? Did you control for money policy? No. Did you control for growth? No. Did you control for prices in sectors that are not immigrant rich in production? No.

Furthermore, the change in the aggregate CPI has little to do with the relative degree of market power held by firms in individual sectors. Basically, you've got nothing. I'd expect that even with your undergraduate background in economics you'd know better than to pull this out.

No, no1, until you can come up with something a lot better, I think I can safely rest my case. Maybe you should take a moment and actually read that paper. You might learn a thing or two.

Originally posted by no1marauder
I'll concede that some illegal immigrants lack equivalent English speaking skills to a native high school dropout. I doubt that it is anything near a majority or even a substantial minority though. But for the sake of argument, I'll concede that it is.

Now where did you address the second question? The study you cited seems to clearly indi ...[text shortened]... (presumably) lesser English skilled illegal immigrants. That supports your argument how again?

I quoted it. Here's the full paragraph again.

"My structural estimates suggest an alternative explanation: low-skilled natives and lowskilled
immigrants are far from being perfect substitutes (I estimate an elasticity of substitution
of 1.32); therefore, a low-skilled immigration shock should affect mostly the wages of other lowskilled
immigrants and have little effect on the wages of low-skilled natives. Because the literature
on the own-wage effects of low-skilled immigrants is scant5, I provide several consistency checks
on my estimates. In particular, I show that low-skilled immigration has a much larger negative
effect on the wages of native Hispanics with low English proficiency than on the wages of other
low-skilled native groups."

Basically, native low-skilled and immigrant low-skilled are not equivalent inputs to production because natives have better English. Therefore they can compete for low-skill jobs that immigrants cannot compete for. This mitigates the negative effect on wages from increased low-skilled immigration. I made the same argument a few pages ago.

Originally posted by telerion
Wow . . . that's the best you can come up with? Look at the aggregated CPI? Did you control for money policy? No. Did you control for growth? No. Did you control for prices in sectors that are not immigrant rich in production? No.

Furthermore, the change in the aggregate CPI has little to do with the relative degree of market power held by firms aybe you should take a moment and actually read that paper. You might learn a thing or two.

Your attempt at elitist snobbery is pretty pathetic. Even someone doused in the ivory tower world of mainstream economic theory should be able to recognize that prices being resistant to falling is an indication of lack of overall competitiveness in the economy. In case you missed it, you claimed that the structure of the US economy is basically competitive.

EDIT: telerion: the degree of monopoly power is not so great in most US markets to drastically dampen the fall in prices.

It ain't?

Originally posted by no1marauder
Your attempt at elitist snobbery is pretty pathetic. Even someone doused in the ivory tower world of mainstream economic theory should be able to recognize that prices being resistant to falling is an indication of lack of overall competitiveness in the economy. In case you missed it, you claimed that the structure of the US economy is basically competitive.

And some one with even two courses in college economics would know that rising prices do not imply that a market is not mostly competitive.

Again what about all the other factors that I listed that are known to effect price. Take monetary policy. Have you looked at the price data since the establishment of the Federal Reserve? You'll find basically no price deflations since. Why? Because our money growth outpaces is demand. It doesn't matter whether markets are competitive or not. If the value of the dollar relative to goods declines you'll have price increases.

Originally posted by no1marauder
Your attempt at elitist snobbery is pretty pathetic. Even someone doused in the ivory tower world of mainstream economic theory should be able to recognize that prices being resistant to falling is an indication of lack of overall competitiveness in the economy. In case you missed it, you claimed that the structure of the US economy is basically competit ...[text shortened]... so great in most US markets to drastically dampen the fall in prices.

It ain't?

Your edit:

My statement was made within the context of the wage effect on market prices. My argument is that monopoly power is not strong enough to dampen that. Other factors that affect aggregate price levels obviously can dominate and I've said as much several times now.

Again, if you look at the paper that I cited for you, it is obvious that market power cannot be a dominant factor, at least not in the low-skill immigrant rich markets (the ones that actually matter for this discussion).

Originally posted by telerion
Your edit:

My statement was made within the context of the wage effect on market prices. My argument is that monopoly power is not strong enough to dampen that. Other factors that affect aggregate price levels obviously can dominate and I've said as much several times now.

Again, if you look at the paper that I cited for you, it is obvious that ma ...[text shortened]... ot in the low-skill immigrant rich markets (the ones that actually matter for this discussion).

Since the study assumes that ALL markets are competitive (p. 12), market power obviously can't be a "dominant factor" in its analysis. A typically unrealistic assumption in a economics paper.

The study also looks only at the prices of non-traded goods and services (p.27) and only those in 25 urban areas. Using a study so limited to make sweeping assertions as to the effect on illegal immigration in the national economy seems unwarranted to say the least. On p. 22, it says an earlier study by Borjas looking at the national economy came to far different conclusions.

Originally posted by Bosse de Nage
They wrecked his car, man.

the immigrants?

Originally posted by telerion
And some one with even two courses in college economics would know that rising prices do not imply that a market is not mostly competitive.

Again what about all the other factors that I listed that are known to effect price. Take monetary policy. Have you looked at the price data since the establishment of the Federal Reserve? You'll find basically ...[text shortened]... e or not. If the value of the dollar relative to goods declines you'll have price increases.

Say hello to Milton Friedman for me.

However, actual CPI data shows that prices declined or were stagnant 14 of the first 27 years of the Fed's existence, 1920-24, 1927-33 and 1938-39. http://inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx?rsCPI_currentPage=7

The idea that market structure has no effect on prices is a pretty strange one. Surely, you didn't actually mean "It doesn't matter whether markets are competitive or not" in what prices will be?

Originally posted by no1marauder
Say hello to Milton Friedman for me.

However, actual CPI data shows that prices declined or were stagnant 14 of the first 27 years of the Fed's existence, 1920-24, 1927-33 and 1938-39. http://inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx?rsCPI_currentPage=7

The idea that market structure has no lly mean "It doesn't matter whether markets are competitive or not" in what prices will be?

No, again I'm saying that markets are not so monopolistic that decreased wage costs do not have a negative effect on prices. Whether that effect dominates all other effects (which is all your general CPI index could tell you) is a totally different matter.

Your argument is like saying that gravity has no affect on space shuttle launches because shuttles rise in the air. Gravity is always acting to reduce the shuttles altitude but other forces are dominating it.


I'm no Friedman lover. He made many important contributions to economic theory, and he also made plenty of mistakes. I'm becoming less and less surprised though that you're taking your data from weak sources. Inflationdata.com? Give me a break. Let's go right to the source shall we?

ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

I only count eleven years with negative or stagnant prices from 1913-1940. In general prices have been rising (the last deflation was 53 years ago!). My point is simply that trying to make statements about the average degree of market power in the US economy based solely on the CPI index is laughable. It's like trying to estimate the demand for Hershey's chocolate bars with only data on households' spending on total groceries!

Originally posted by telerion
No, again I'm saying that markets are not so monopolistic that decreased wage costs do not have a negative effect on prices. Whether that effect dominates all other effects (which is all your general CPI index could tell you) is a totally different matter.

Your argument is like saying that gravity has no affect on space shuttle launches because shuttles for Hershey's chocolate bars with only data on households' spending on total groceries!

It's hard to keep up with what your claim is. First, it was that monetary policy was the only thing that affected overall prices; you seem to have wisely retreated from that stance. Related to that was the claim that market structure has no effect on prices; you seem to have fled from that comment too.

The idea that market structure has very little impact on overall price inflexibility is a strange one according to any economic theory I am aware of. Since your whole original argument was that firms being able to pay illegal immigrants would lead necessarily to lower prices, it's a bit hard to see why you think that the level of competition the firm is facing in making pricing decisions in is not important. At least the study you cited straightforwardly avoided that issue by ridiculously assuming that "all markets are competitive".

By the government's figures, prices were stagnant for the period 1918-41; also, I suggest you check the money supply figures for that period and see if it is also stagnant. Despite your ivory tower scorn, an economy with a high degree of competitiveness in its economy is a lot more likely to see price (esp. downward) flexibility than one dominated by industries which are monopolistic - maybe you need to reread the ECO 101 texts.

Originally posted by telerion
I thought Glenn Beck had a good piece on this subject today.

http://www.cnn.com/2008/US/05/28/beck.immigrantworkers/index.html

Disclaimer: I usually disagree with Beck, but for a talking head he has a refreshingly strong grasp of economics.

I agree with this particular piece of Beck's also, and it's pretty much what I was saying, albeit with a bit more detail added. So why did you fling those ad hominem attacks at my earlier post?

Without illegal immigrants, some employers will indeed go out of business, and the prices for some commodities will increase somewhat. But that's as it should be. (On the other hand, the prices for Nike shoes would not be affected much if their factory conditions were regulated so they had to pay their employees decent wages. They'd just lose some of their profit margin; their prices are currently regulated mostly by demand rather than supply.)