The Wage Impact of the Marielitos: A Reappraisal

See below for my comments on the misleading report on NPR this morning (10/12015) about this, as well comments on why this result should not be surprising.

http://economistsview.typepad.com/economistsview/2015/09/the-wage-impact-of-the-marielitos-a-reappraisal.html#comment-6a00d83451b33869e201b7c7d71e9f970b

http://www.nber.org/papers/w21588#fromrss

George J. Borjas
NBER Working Paper No. 21588
Issued in September 2015
National Bureau of Economic Research

This paper brings a new perspective to the analysis of the Mariel supply shock, revisiting the question and the data armed with the accumulated insights from the vast literature on the economic impact of immigration. A crucial lesson from this literature is that any credible attempt to measure the wage impact of immigration must carefully match the skills of the immigrants with those of the pre-existing workforce. The Marielitos were disproportionately low-skill; at least 60 percent were high school dropouts. A reappraisal of the Mariel evidence, specifically examining the evolution of wages in the low-skill group most likely to be affected, quickly overturns the finding that Mariel did not affect Miami’s wage structure. The absolute wage of high school dropouts in Miami dropped dramatically, as did the wage of high school dropouts relative to that of either high school graduates or college graduates. The drop in the relative wage of the least educated Miamians was substantial (10 to 30 percent), implying an elasticity of wages with respect to the number of workers between -0.5 and -1.5. In fact, comparing the magnitude of the steep post-Mariel drop in the low-skill wage in Miami with that observed in all other metropolitan areas over an equivalent time span between 1977 and 2001 reveals that the change in the Miami wage structure was a very unusual event.

•••••
============================================================
My comments:

The power elite that makes corporate donations to NPR obviously don't want people to know about this, because NPR had a report this morning saying the Marielitos had no effect on the economy, because they bought stuff, and created more jobs. They did finally say that "some" people said there "might" have been temporary decreases in wages for low-income people. Of course, wage decreases are more harmful to poor workers, who are living on the edge already.

The power elite, as well as the middle class, are helped when wages for the poor are kept down. And it gives them a bigger customer base.

What I notice is that for decades, we have had both an increasing proportion of immigrants, and decreasing wages for the low-income wage earners.

There is currently an oversupply of lawyers, resulting in lower salaries and difficulty finding a joy in there field.

Thru the decades, I have seen that the cycle of the supply of engineers. When there are too few, salaries go up, leading to more people getting engineering decrees, leading to an over supply, leading to decreased salaries and more people not able to get jobs in their field, leading to fewer people getting engineering degrees, leading to an under supply, etc.

If you don't think that an increased supply of workers would have the same effect just because they come from another country, please tell me how you think that works.

It's easy for the privileged people here to pontificate that more poor immigrants would not hurt the poor who are already here. You're not the ones getting hurt. You are benefiting from lower wages for the people you depend on.

If farmers can't get people to do the work, it means they aren't paying enough, and they are treating them badly. Why would it me moral to do the same to people who are immigrants?