On Tuesday, members of the Scranton community, university students and faculty members gathered for the much-anticipated 31st annual Henry George Lecture. This semester’s lecture, sponsored by the school’s department of finance and economics, was given by the renowned David Card Ph.D., class of 1950 ,professor of economics at the University of California, Berkeley.
Before Card began his lecture on “The Economics of Immigration,” he was introduced and his many accolades, including the prestigious American Economic Association’s John Bates Clark Prize, were announced. It quickly became clear why Card was selected to speak at this highly acclaimed lecture, with a long line of successful speakers from schools such as Harvard and Yale, many of whom went on to become Nobel Laureates in the field of economics.
Card has devoted many of his last 20 years to the economics of the controversial topic of immigration. He became interested in the topic after realizing the relatively slow progress of the wage growth since the 1960s. This extended period of stagnant growth caused many people to wonder: what went wrong? Some thought it might be international trade, technology or immigration. Immigration is what Card decided to focus his studies on.
In 1926, there was a major reform in immigration law where mobility patterns around the world slowed and overall immigration decreased. This period of low immigration lasted well into the ‘60s when only around five percent of the population was made up of first-generation immigrants. Since this time there has been vast increase in immigration to the point now almost half of all students in school are either first-or second-generation immigrants. In Card’s opinion, “You could easily make a simple case that it (the change in demographic) is correlated with immigration and we know in many circles, correlation equals causality.” This statement drives Card’s discussion and inspired much of his research.
Card explained that the nature of immigration has changed, including the types of people who are coming here and their motives. The now almost 42 million immigrants living in the U.S. come from countries such as Mexico, India and China. The immigrant population looks different from the population 40 years ago in that now they do not look like “typical members of Congress” and no longer pour in from predominantly white countries such as Britain and Italy.
Card presented statistics that describe the education levels of native citizens and immigrants and their corresponding professions. Many U.S. immigrants are very highly educated and come here with advanced degrees including master’s degrees. Many of these people come from Southeast Asia and are here pursuing jobs in Science, Technology, Engineering, and Mathematics (STEM) fields such as engineering, healthcare and software engineering. On the other end of the spectrum, unskilled labor professions such as food production and agriculture are also filled predominantly by uneducated immigrants as they are in high demand and have little competition from natives. Many immigrants come here knowing that they can potentially earn more money in the U.S. states than in their home countries.
Card believes that there is such high demand for highly skilled jobs due to a failing American education system. More high school graduates are finishing without a basic understanding of STEM than ever before. The nation is being forced to fill these jobs with immigrants.
Card debunked the common misconception that more workers necessarily lead to lower wages, when in reality more workers promote investment, which stimulates the economy. He looked closely a model-based analysis developed by fellow economist George Borjas to simulate a number of circumstances to determine the effect on wages. The results indicate that post-grads and unskilled workers struggled slightly, but largely, natives actually benefit from immigrants.
Card found that while immigrants have very little impact on the economy, what we should be focusing more on is the biased views that people have on immigration and the effect this can have. This is known as the “compositional effect” which is what happens as natives look around and see an increasing number of neighbors, co-workers and their children’s classmates who do not look exactly like them, Card said.
Card concluded that the economics of immigration give very little insight as to why people are for or against immigration, but instead it is the compositional issues that have a greater impact on people’s stance on immigration.