NYTimes: Import More Workers to Expand the Economy

The supply of extra workers does not have much effect on wages, so the government should import more workers to grow the economy, says a February 27 New York Times article titled “Why a Top Trump Aide Said ‘We Are Desperate’ for More Immigrants.”

“Proponents of restraining immigration, particularly among low-skill workers, often argue that newcomers can supplant American workers or depress their wages, even if they help the economy as a whole … But the evidence supporting that argument is limited,” said the article.

The newspaper’s claim that the law of supply and demand does not impact Americans’ wages is undermined by the reality of rising blue-collar wages amid President Donald Trump’s lower-immigration policies. A February 4 report in the New York Times said:

Unemployment sank to 3.5 percent in December, down from 4.7 percent when Mr. Trump took office. Workers’ wages are growing, particularly for those in the jobs that pay the least, like retail clerks and restaurant workers.

The Times‘ February 27 article by Jeanna Smialek and Zolan Kanno-Youngs downplays the rising wages and showcases the demands for more immigration by business groups:

Economists at Moody’s Analytics have estimated that if immigration consistently dropped to 500,000 a year and stayed there — down from previously normal levels of around one million a year — the nation’s total gross domestic product would be about $700 billion smaller by 2030.

Moody’s predicted the economy would grow to $24.7 trillion in 2030, so a $700 billion cut would amount to a claimed loss of 2.8 percent for the economy. But less immigration means a smaller population, likely ensuring that employees would get a larger share of the slightly-smaller pie.

Immigration does accelerate economic growth by providing more consumers, house buyers, renters, and cheaper workers. The extra population pushes up real estate prices, creates new companies, boosts sales, grows profits, and supercharges growth on Wall Street for investors, shareholders, and company owners — especially if family wages stall or fall amid the artificial supply of immigrant labor.

The investors’ repeated demands for inflated population growth helps to explain why Mick Mulvaney, Trump’s chief of staff, recently called for more immigration. “We are desperate, desperate for more people,” Mulvaney told the elite audience at Britain’s Oxford University on February 19. “We are running out of people to fuel the economic growth that we’ve had in our nation over the last four years. We need more immigrants.”

But there is an alternative method for boosting economic growth that would help investors, employers, and employees — the greater use of labor-saving, productivity-boosting machines.

The Times tried to shoot down the productivity alternative, saying:

Productivity improvement has been weak in America over the past decade. While some economists hope that will change as companies embrace nascent technologies in robotics and machine learning, others believe that most economy-altering innovations may be behind us — think cars, washing machines and refrigerators. Future gains could be consistently mediocre.

If that’s the case, the United States’ economic fate will hinge on population growth.

But the article then cited mushroom farmers as an example where more people — not machines — are needed to grow the economy, saying:

In Chester County, Pa., which produces more than 60 percent of the country’s mushrooms, immigration is top of mind. Harvesting is difficult work: It requires laboring from early in the day in growing houses, bending and stretching to twist the produce from its trays. In recent years, there have been too few people to complete the task even at higher pay rates, so companies have planted less and have even allowed crops to go unpicked.

“As an industry, they are not able to produce at the levels they would like, and at the demand that’s being requested,” said Guy Ciarrocchi, the head of the Chester County Chamber of Business and Industry. The local unemployment rate comes in under 3 percent, so other opportunities are plentiful.

A 2018 video by Rep. Eric Roe reported that 9,500 people were employed in Pennsylvania’s mushroom business, mostly in family farms.

In Europe and Japan, however, mushroom farmers are pressured to invest in large-scale machines instead of relying on cheap migrant labor.

The resulting productivity gains allow them to grow, harvest, and sort more mushrooms while paying higher wages.

“Farms will invest in machines if it is cheaper than [getting immigrant labor by] investing in legislators,” said Mark Krikorian, the director of the Center for Immigration Studies. He continued:

If they are convinced that lobbying isn’t going to get them what they need, they will spend the money on research and development and acquisition of harvesting machinery. But that stuff does not come cheap, and they may have to change their operations around to be compatible with the machinery

The first wave of mushroom farmers were Italian immigrants, and their businesses have employed waves of migrants from Puerto Rico and Mexico, he said.

“If they want to stay in business and keep growing mushrooms, they will need to modernize their operations,” he said, continuing:

They’re going to have to evolve once again, and it is not a question of importing some other immigrants- – for example, Ecuadorians, Congolese or Burmese — but they will have to move towards modernizing their operations.  Those who do not want to modernize may shut their doors or go into other businesses. That’s s OK too. But it is not Congress’ job to make sure the economy freezes and stays unchanged. Congress’s job is to set the parameters … and let the market work.

Foreign companies are also trying to develop better robots for the mushroom companies.

“The basic problem in the [immigration] discussion is [that the media mixes up any] growth in the overall economy with improvement in any individual families’ economic situation,” said Krikorian. “The economy will get bigger if you import more people — we’d have a bigger economy if everyone from Bangladesh moved here – but it would not be better for any family here.”