TheEconomistFebruary 15th 2020 19
1
I
n both 2018 and 2019 nominal wages
rose by more than 3%, the fastest growth
since before the recession a decade ago.
Americans at the bottom of the labour mar-
ket are doing especially well. In the past
year the wages of those without a high-
school diploma have risen by nearly 10%.
Intriguingly, this has come as America has
turned considerably less friendly to immi-
grants, who are assumed by many to steal
jobs from natives and lower the wages of
less-educated folk. The two phenomena
may be connected—but only for a while.
For the first time in half a century Amer-
ica’s immigrant population appears to be
in sustained decline, both in absolute
terms and as a share of the total. Net migra-
tion to America (ie, the difference between
people arriving and people leaving the
country) fell to 595,000 in 2019, the lowest
in over a decade. This is a profound shift in
a country which has often prided itself on
its openness to outsiders.
The number of highly qualified immi-
grants continues to rise. San Francisco air-
port remains just as crammed with All-
birds-and-gilet-wearing tech investors
from all over the world. It appears instead
that the overall decline in the foreign-born
population is a result of falling numbers of
low-skilled migrants. Those numbers
slumped a decade ago because of the reces-
sion that began in 2007, changing demo-
graphics in Mexico and tougher border pol-
icing. More recently the number of
low-skilled migrants appears to be in de-
cline again. That is probably a consequence
of policies implemented by President Do-
nald Trump, as well as the off-putting ef-
fects of his rhetoric on foreigners.
Many factors lie behind America’s
growing wages. Labour demand is excep-
tionally high, with unemployment at 3.6%,
giving some workers more bargaining
power. Ambitious increases in state-level
minimum wages in recent years have
boosted the wages of the lowest earners.
Nominal wages are rising not just in Amer-
ica but across rich countries—even though
the foreign-born population in many of
them continues to grow rapidly.
There are nonetheless scraps of evi-
dence that some workers are benefiting
from America’s growing antipathy to im-
migrants. Gordon Hanson of Harvard Uni-
versity suggests that if the impact of re-
duced low-skill migration is showing up
anywhere, it will be in three particular oc-
cupations: housekeepers, building-and-
grounds maintenance workers, and dry-
wall installers. These occupations rely
heavily on immigrant labour and the ser-
vices they provide cannot be traded inter-
nationally. Average wages in those occupa-
tions are rising considerably faster than
wages in other low-paid jobs, according to
calculations by The Economist.
Intriguing evidence also shows up geo-
The economics of migration
Delayed reaction
CLEVELAND AND SAN FRANCISCO
Immigration is down. Wages are up. Are the two related?
United States
20 Politicalrevenge
22 MayorPete’sprogress
24 Ethicallandmines
25 Tariffsonwine
26 Lexington: Bloomberg in Tennessee
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