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'Planet Money': Do immigrants really take jobs and lower wages?

A MARTÍNEZ, HOST:

Former President Donald Trump campaigns a lot on immigration. He says immigrants make wages go down, and he says they take jobs from Americans. Amanda Aronczyk looks into these claims for NPR's Planet Money.

AMANDA ARONCZYK, BYLINE: Economists have actually been trying to answer this question for decades - do immigrants take jobs and lower wages? In fact, it's the subject of one of the most famous papers in the field of economics. The story begins in April 1980. It was a big deal in the news.

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DIANA GONZALEZ: Cuba, the bay of Mariel, 25 miles west of Havana. This morning, nearly 200 Cubans were being loaded onto four boats bound for Florida.

ARONCZYK: It's known as the Mariel boatlift. Over the course of just a few months, 125,000 Cuban immigrants show up on the shores of southern Florida. Most people end up in Miami looking for work. It's what economists call an immigration shock.

DAVID CARD: It's big. It's very quick. It's all over in a couple months, and it was completely unexpected.

ARONCZYK: This is the Nobel Prize-winning economist David Card. Card realized back in the '80s that he could compare Miami to similar cities before and then after the boatlift, see what changed. Now, at the time, there was a prevailing assumption about how immigrants affect the labor market.

CARD: There's 100 jobs in the labor market. You bring in 10 immigrants, so 10 natives are going to lose the job. So we call that the skating rink model.

ARONCZYK: Skating as in hockey. Card's originally from Canada, so am I, so we are required to make this reference. In hockey, you can swap out players, but you can't have more than six on the ice. That was the assumption with immigration, each new immigrant would knock a native off the ice. But Card wasn't convinced that's what would happen. When he digs into the data, he finds something surprising. A few years after the Cubans arrive, there is basically no impact on employment or wages, nothing. Card, being humble and precise, says nothing isn't quite right.

CARD: Well, of course, that's not what you would really say if you were writing a scientific paper. What you would say was, there's no detectable effect.

ARONCZYK: How would you explain that all of these people show up and that there's no detectable effect?

CARD: Well, it seems like what goes on is the labor market has absorptive capacity.

ARONCZYK: Absorptive capacity, meaning that the Cubans were absorbed into the labor market. It's like the hockey team got bigger - more people could skate at the same time. This was a huge finding. Now, Card is not one to brag about his work, so I called up someone who would. Michael Clemens, professor of economics at George Mason University, did a recent reanalysis of the data.

Do you remember when you first read David Card's Mariel boatlift paper?

MICHAEL CLEMENS: Wow, that paper is iconic.

ARONCZYK: Clemens says that before this paper about the Mariel boatlift, people assumed that the laws of supply and demand applied to immigrants, but Clemens says it doesn't always work that way. He asks me to think of bananas.

CLEMENS: If there's a marketplace and bananas are $3 a bunch and you flood that market with bananas, it would be kind of strange if the price of bananas didn't get bid down. But bananas just sit there and be a banana. They don't do anything else.

ARONCZYK: (Laughter) Right.

CLEMENS: But immigrants are not like that. Immigrants buy stuff.

ARONCZYK: Right. Bananas aren't buying anything.

CLEMENS: They're just bananas. They just hang out and be bananas.

ARONCZYK: Immigrants are not bananas. They buy stuff. They start businesses. They do all kinds of things that help shape the economy. Now, this Mariel boatlift paper was written about one place at one time, but since David Card wrote it, variations on this experiment have been done repeatedly. And over and over again, economists have found the same thing - in the long run, immigrants do not really make unemployment go up or wages go down. More often than not, there is no detectable effect.

Amanda Aronczyk, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Amanda Aronczyk
Amanda Aronczyk (she/her) is a co-host and reporter for Planet Money, NPR's award-winning podcast that finds creative, entertaining ways to make sense of the big, complicated forces that move our economy. She joined the team in October 2019.