San Francisco Bay Area perspective on immigration
I talked with a guy in his 50s who does creative work for a company in the San Francisco Bay Area. His employer recently went public advocating against Donald Trump’s positions regarding immigration and travel from certain countries. He described his employer’s stance as “principled.” I said “Wouldn’t Econ 101 suggest that the executives are doing it to keep costs low and thereby help themselves to larger bonuses? Classical supply-demand economics predicts that the only principle an employer needs to support immigration is self-interest.” He responded that this might be right for other kinds of companies but his employer was bringing in immigrants because they wanted extra creativity that could only come from having grown up in an exotic foreign land. He argued that his employer’s ability to hire immigrants would not depress wages for himself or other American-born employees in the same area.
What has actually happened to inflation-adjusted salaries in his industry over the past 30 years? “People get paid about half as much as they used to.” How is he doing personally? “I am not making as much as 20 years ago.” His workplace has gone from basically “no immigrants” to somewhere around one quarter immigrants (but maybe closer to one third).
[On the same day I talked to a hotel manager here in Hawaii. His previous job was managing a hotel in Singapore. He said that it was a tough challenge. How could that be? Weren’t people there educated and efficient? “You never had to tell anyone twice to do anything,” he responded. “And the level of education, skill, and dedication to doing things right is amazing.” What was the problem then? “The government required that 50 percent of our workers be citizens and it was very tough to hire locals to clean rooms or work in the restaurant.” Why not pay more? “Then we would have had to raise our rates to uncompetitive levels.”]
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