Wednesday, April 19, 2006

Immigration & Wages

Drezner approvingly links to a sloppy NYT's piece on immigration. The article contends that "there is scant evidence that illegal immigrants have caused any significant damage to the wages of American workers." Citing as evidence for this proposition, which flies in the face of basic economic principles, Eduardo Porter compares changes in Ohio and California wages over the last 25 years, noting that the fall of Ohio's average wage for high school dropouts was 14 percent higher in Ohio than in California(decline of 31% versus 17%).

As Steve Sailer points out, the selection of Ohio is a cherry-picked data point (Ohio was largely unionized in the past whereas California was not; thus, with the decline of unions, Ohio's unskilled workers were hurt more than California's). The misuse of this data is even more apparent once Sailer notes that while the nominal wage is about the same for high school dropouts in each state, the real wage (adjusted for inflation) is 150% higher in Ohio. Which means that high school dropouts are a lot worse off in California than Ohio. But that wouldn't be any indication that illegals lower wages for the unskilled, would it?

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