Conventional wisdom says immigration drives down wages and takes jobs from American workers. But what if that story is fueled by bad economics? Journalist Rogé Karma joins Nick and Goldy to challenge the Econ 101 logic that supercharges anti-immigrant rhetoric—and to explain what the data actually shows. Drawing on research from the U.S., Denmark, and beyond, Karma makes the case that immigrants don’t steal jobs—they grow the economy. In a moment when political leaders are pushing mass deportations in the name of “economic populism,” this conversation reveals what’s really at stake.
Rogé Karma is a staff writer at The Atlantic. He was previously the senior editor of The Ezra Klein Show at The New York Times. At The Atlantic, he covers economics and economic policy.
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The Truth About Immigration & The American Worker
The Most Dramatic Shift in U.S. Public Opinion
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Nick Hanauer: The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
David Golstein: The last five decades of trickle-down economics haven’t worked, but what’s the alternative?
Nick Hanauer: Middle-out economics is the answer.
David Golstein: Because the middle class is the source of growth, not its consequence.
Nick Hanauer: That’s right.
Speaker 3: This is Pitchfork Economics with Nick Hanauer. A podcast about how to build the economy from the middle out. Welcome to the show.
David Golstein: We’re recording this podcast, Nick, on June 18th, which is just a few days after the big No Kings rallies nationwide, and I don’t know what it was like in other cities, but here in Seattle it was very much themed in opposition to the deportations and the fascist use of ICE in rounding up people. The rally was very successful. We had about 70,000, one of the largest political rallies in Seattle’s history. And we are known to have had a few, much bigger actually than WTO, for which we’re infamous, but it was organized a lot by OneAmerica, which was Pramila, the organization, the immigrant rights organization that Pramila Jayapal founded. Pramila gave a great speech at the start, and throughout it you could see it was very much a reaction to the deportations of the Trump regime, which certainly in the months leading up to last year’s election and certainly since, has been partially billed as an economic issue that somehow deporting workers is good for workers?
Nick Hanauer: Yeah. I mean, I think for decades we’ve been told this pretty simple story about immigration, that more of it hurts workers by driving down wages and taking jobs.
David Golstein: Right. Supply and demand.
Nick Hanauer: It feels intuitively true, and there is, of course, a case in which it is true, but as our guest-
David Golstein: Can be true.
Nick Hanauer: Can be true.
David Golstein: Given certain simplifying assumptions.
Nick Hanauer: That’s right. But as our guest, Roge Karma, will tell us today, it’s usually not true because the circumstances are so much more complex than that. Because we have to remember that immigrants aren’t just workers, they’re also customers, they’re also entrepreneurs, they’re also volunteers in the community, and everything else. Just ripping them out of the economy naturally and unsurprisingly will have a negative effect on the economy. I think our guest today, again, is a journalist named Roge Karma who writes, he’s a staff writer at The Atlantic. He was previously the senior editor at the Ezra Klein Show. But he has written a lot about the economics of immigration, and I think it’s a really important thing to think about and understand in these days.
Roge Karma: I am Roge Karma, I’m a staff writer at the Atlantic covering economics and economic policy, and nothing in particular to plug except check out my [inaudible 00:03:49] page for my writing.
Nick Hanauer: That’s great. That’s great. Because I read The Atlantic, I know that immigration is somewhat in the news today, somewhat of an issue going on. And you’ve made a very thoughtful argument that the conventional wisdom around the economics of immigration is either right or wrong depending on how you look at it, but that certainly subscribe to the view it’s more complicated than people think. So why don’t you just start by laying out your basic argument about where you think we should be on immigration?
Roge Karma: I will say, I think there is a sort of common-sense, man-on-the-street view that immigrants take jobs from American workers and lower the wages of native-born American workers. I think we tend to think about, or at least people outside the econ wonk sphere tend to think about a fixed pool of labor, a fixed pool of workers. And so anytime you add immigrants to that, they’re by definition going to take away jobs from those who have them. And then there’s this really basic Econ 101 logic, which says anytime that the supply of a good goes up, the price of that good falls. So the supply of labor goes up, wages are going to fall.
And so I think there is this really sort of intuitive view that immigrants come in, they take jobs from native-born workers, and they lower native-born wages. And so for the piece I really wanted to dig into, does that story actually hold up in reality? And there is a whole empirical literature here. My favorite study, which I hope you let me start off by getting a little wonky here. The canonical sort of study on this was known as the Mariel boatlift. And so in 1980, Fidel Castro lifted Cuba’s ban on immigration. And that caused about 125,000 Cubans to migrate from Mariel Harbor in Cuba to Miami, Florida.
About half of them settled here, which represents an 8% increase in the Miami workforce. And for contexts, that’s 25 times the amount that the workforce expands every year due to immigration in the US. So this is a huge change, and it created what the economist David Card later realizes is this perfect sort of natural experiment. You have this one-time influx of random shock into Miami. So you can compare what happened to the wages of native-born workers in Miami to the trajectory of native-born wages in other comparable cities, Atlanta, Los Angeles, et cetera. And I think the view at the time was, because this was really, I think the conventional wisdom at the time was, of course, immigrants hurt wages. And if there’s any place we’re going to see that most prominently, it’s going to be Miami in the 1980s.
And that’s why the paper ends up being so surprising, because Card finds that the boatlift had virtually no effect on the wages of native-born workers, including those without a college degree. If you look at a chart of the wages of workers in Miami in the 1980s, next to basically every comparable city, there’s almost no difference; you can’t even tell the boatlift happened. And I think the big overarching thing that the common sense wisdom gets wrong is that immigrants aren’t just workers, immigrants are also consumers.
Nick Hanauer: Correct.
Roge Karma: They buy lots of things like healthcare, groceries, and housing. And so at the same time, they’re competing-
Nick Hanauer: And they’re also entrepreneurs, they’re also entrepreneurs.
Roge Karma: These studies don’t even account for that fact, really. So at the same time that they’re competing with Americans for jobs, they’re also creating more demand for jobs, they’re creating more employment opportunities, and so they’re pushing wages up even as they’re pushing them down. And in the end, it seems like those things cancel out. When you include things like their effect through entrepreneurship, et cetera, actually, it looks very positive. And in sense, this sort of one study, which was the big canonical one, there have been a host of them across many countries in Israel, France, Denmark, et cetera. And almost all of them have come to very similar conclusions about how immigration affects native-born workers.
Nick Hanauer: Yeah. So just a couple of thoughts, can’t resist. So the first is to just acknowledge that David Card is famous for another reason, which is he and Alan Krueger did the first natural experiment on the minimum wage, found the same thing, right? Basically, they pioneered this natural experiment-
Roge Karma: Which also really went against the common-sense wisdom at the time
Nick Hanauer: Absolutely.
David Golstein: It’s weird. So, from these two, are you suggesting Nick, maybe that labor markets don’t follow that strict demand curve model in the Econ 101 textbooks, that when the supply goes up, the cost goes down, the price goes down?
Nick Hanauer: The thing is, Roge, it’s this circuit, what we’re talking about, immigration, like the minimum wage, at some point, if you bring immigrants into the workforce, that will, of course, if you bring an infinite number of low wage workers into the economy, it has to be true, it just has to be true.
David Golstein: You’re talking about the canonical $50 minimum wage?
Nick Hanauer: Yeah. In the same-
David Golstein: If $15 why not $50.
Nick Hanauer: $50 or $100. There is some level at which this stops creating social or economic utility. But what I think the research shows is that in even the most extreme examples that we have ever measured, it still wasn’t bad. There may be some level at which you would bring so many people in from outside that that would create the kind of competition that would negatively affect native born workers. But we have never witnessed that.
Roge Karma: Exactly. And that’s why I emphasize this was 25 times the amount; it was this one random shock. I think the two exceptions, immigration does not have zero costs. I think that what’s one thing you see in the literature is that, for example, there’s been a lot of follow-up studies that ask, “Well, what about the specific slice of workers that are high school dropouts? The workers that are the most likely to compete directly with immigrants?” And for that worker group, actually, there’s been a lot of work done. Actually, it doesn’t hurt that group of workers either. But, and this comes from one of my favorite studies here was a similar to the Mariel boatlift study, but it was Puerto Rican immigrants to Orlando after Hurricane Maria, a very similar study. And that one found that actually the wages of construction workers in that sector did get depressed, but the wages for workers in leisure and hospitality restaurants, et cetera, actually went up so much that it more than offset.
And so if you look at that education band as a whole, you don’t actually see negative effects. But there could be sort of profession-specific effects. And also, there’s a series of studies here that show that there can be temporary effects. Sometimes initially in the first two or three years, you could see wages being depressed as an economy takes time to adjust, as the businesses open to accommodate them. So I think both there can be sector-specific effects, there can be short-term shock effects, there could be a rise in equality potentially, although it’s pretty marginal. So it’s not that there’s no cost, but you’re right, even in the cases where we’ve seen the biggest, most unprecedented shocks, the places where we would think we’d find the worst effects, we really don’t see them.
Nick Hanauer: That’s right. And again, analogizing to the minimum wage, when we say we should raise the minimum wage from $7.25 to $15 or $20 an hour, which is where it is in Washington state. Now, effectively, we’re not saying there will be zero people who will lose their jobs as a consequence of that change, or zero businesses that will not be able to accommodate this new regime. There will certainly be some businesses who are predicated on exploitive have a business strategy that requires paying people poverty wages that will not survive. But what we can also count on is that we will not run out of hamburgers. Some people will not be able to make hamburgers paying $15 or $20 an hour, but lots of other people will figure out how to do it. So, just in terms of the politics, it’s not right and probably not helpful to say to people about these policies, “Don’t worry, nothing bad can ever happen.” Because there will be negative impacts on individuals, on sectors, and on different things.
Roge Karma: Totally.
Nick Hanauer: But in aggregate, it is not necessarily a bad thing, and it’s certainly not a bad thing for a lot of the people who are most convinced that it will be a bad for them.
David Golstein: Are you saying, Nick, that in a nation that was built on immigration, that immigration isn’t a bad thing economically?
Roge Karma: Yeah, maybe not.
David Golstein: Huh. Wow.
Roge Karma: Maybe not. I love you playing-
Nick Hanauer: It’s not a bad thing.
Roge Karma: … the Nick translator, Goldie.
Nick Hanauer: That’s right. At least, I think President Trump thinks it’s a good thing if all the immigrants come from Norway.
David Golstein: Right?
Roge Karma: Yeah. I would say what’s interesting also about both the minimum wage and immigration examples is, we can get to the politics in a minute, but it’s what this empirical literature actually tells us about how the economy works. So in the minimum wage example, because I’ve dug into this issue as well, something that economists only later discovered was that actually a big reason you don’t see huge employment losses from minimum wage increases is because having a constant churn of workers because you’re paying them poverty wages isn’t actually that good for business.
Nick Hanauer: That’s right.
Roge Karma: That imposes significant costs. And on immigration, what you have is another explanation besides just the simple demand supply explanation, what I’ve started to think of as specialization plus scale, which is take the restaurant industry. Let’s say immigrants come in and they take jobs as fry cooks. Well, that means if you are a native born fry cook, you might end up seeing your wages lowered. But what happens when you have a bunch of immigrants come in is they both lower some of the labor costs for employers and they increase demand for restaurants.
And so you see a bunch new restaurants open, and when those restaurants open, they don’t just need fry cooks, they need waiters and waitresses and hosts and houses and chefs and marketing experts and architects to build the buildings. And because of that, and native born workers are much more suited because of their English skills, because of their tacit cultural knowledge. Even if they don’t have a college degree, they’re much suited, better suited for those professions. And so you see an expansion of the economy that then brings up sort of native-born workers with it. And that obviously happens in reverse with deportations, which we can get to. But I think that is a sort of core explanation of how our economy works, that sort of simple Econ 101 models wouldn’t have accounted for.
Nick Hanauer: Yeah.
David Golstein: And you point that out, you mentioned Denmark, that there was a study there that showed as the immigrant workforce came in, it pushed these lower-skill, lower-wage native-born Danish workers into more knowledge-intensive and higher-paid jobs.
Roge Karma: Exactly. The Denmark study is really interesting because in the United States, we’re forced to rely on these natural experiments because we don’t have really good national data. We care about our privacy a little more than the Danes do. But they track every single worker in the country, and then they turned it over to these researchers to study. And so they could literally track, okay, when immigrants come in, we can literally look at the trajectory of every single worker and see what happens. And what they found, to your point, is that actually the wages on the whole increased, but actually wages for the least skilled workers, workers without a high school degree increased in part because some of them went and got more education or specialized training, a lot of them moved to higher opportunity places, and a lot of them just got jobs they wouldn’t have gotten otherwise because the economy expanded in a way that helped them.
Nick Hanauer: The thing about the piece that you wrote that I thought was most important is just recognizing how complicated the economy is, and how many ways adding somebody affects it. They’re not just a worker, they’re also a customer, they’re also a potential entrepreneur. And we are absolutely convinced that the most fundamental rule of successful social organization is inclusion, because the more you include people in a variety of ways, the bigger the economy gets and the faster it grows. This is very simple arithmetic.
Roge Karma: And to your point, Nick, because you mentioned entrepreneurship a few times, another great study on this came from Ben Jones at Northwestern and some of his colleagues. Which looked at between 2005 and 2010. They looked at basically every business that was started in the United States and who started it. And it turns out that immigrants found businesses at an 80% higher rate-
Nick Hanauer: Almost twice as high.
Roge Karma: … than native-Americans. And interestingly, when you dig in, because some people say, “Well, that’s just the high-skilled immigrants, that’s the Elon Musk, that’s the Sergey Brins.” It’s not, it actually turns out that there is no difference between the rate of entrepreneurship for immigrants in OECD countries and non-OECD countries. So that is just absolutely not true. And to your point, I think also one thing we’re seeing here in addition to broad inclusion being beneficial, is just think about the kind of people who end up coming to this country as immigrants. If you cross the Darien Gap to get here, you are probably going to be a pretty resilient person.
Nick Hanauer: You’re kind of a badass.
David Golstein: You’re a risk-taker.
Nick Hanauer: That’s for sure.
Roge Karma: So it makes intuitive sense that immigrants broadly, and not even just high-skill immigrants, are founding businesses at much higher rates and producing a lot of economic benefits in the process.
David Golstein: Yeah, there’s selection bias there in terms of who is coming. So let’s talk about the opposite of immigration, which is really the big story right now, which is deportation. What do the economics of that look like?
Roge Karma: I’m glad you asked, because this is obviously very potent right now. And there is this view from JD Vance, Stephen Miller, and others that the best way to boost wages for American workers is to deport huge numbers of immigrants, which will create more jobs for natives, it’ll force employers to pay higher wages. And again, it sort of makes sense in theory. Miller and Trump have explicitly cited this as a justification for the deportation effort they’re undergoing now. And then you actually look at what happens when immigrants are deported. And it looks very different. The best study on this looked at the Secure Communities program, which was a DHS program that deported about half a million immigrants between 2008 and 2014, so during the Obama administration. And because this program was rolled out semi-randomly across different communities at different times, it created another one of these natural experiments where you could see what happened to the communities that had experienced deportations and the ones that hadn’t.
And the result is the exact opposite of the Miller-Vance theory. The study found that for every hundred immigrant workers who were deported, there were actually nine fewer jobs for natives, nine permanently fewer jobs. So native-born employment actually fell in the wake of these deportations, and wages slightly fell as well. And the same basic finding is replicated in a bunch of other studies throughout American history, whether it’s the 1960s decision to end the Bracero Program for farm workers, the Great Depression era immigration restrictions, all of them come to a very similar set of results. And the reason is that immigrants are deeply interwoven into their local economies. It’s sort of the exact opposite of the story I told earlier with the restaurant industry, instead of expanding and more restaurants opening, which then creates jobs for natives, imagine a bunch of those businesses just have to close or shrink because they lost their customers or the lost part of their workforce. And when that happens, native-born workers get caught in the crossfire.
There are less need for native-born waiters and waitresses, architects, and marketing, and et cetera when these businesses close. And so that I really think is the lesson from this. Immigrants are so fundamentally interwoven into their communities and local economies that you can’t rip them out without native-born workers getting caught in the crossfire. And we could also talk about specific sectors and how that might affect prices, but I think that’s the broad sort of [inaudible 00:21:02]-
Nick Hanauer: Well, but you don’t even have to consider these, to think about it clearly, you don’t have to think about these people as immigrants. You could just go into any community and imagine what would happen if you pulled 5% of the workforce out on one day, right? Just ripped them out. What would happen? It’s certainly not great for business.
David Golstein: It’s clear that Trump, Vance, and Miller don’t actually care about… I mean, they don’t believe it. They say it because they think it’s a compelling argument. I mean, the same people who are making this argument that, oh, it’s good for native-born workers, if we deport millions of people, are the ones who are doing the pearl clutching over declining fertility rates, as if having more white babies wouldn’t create competition for those jobs. So they think it’s important to grow the population, just not with brown people.
Roge Karma: I’m so happy you use that example. The example I sometimes use is, you don’t see Republicans showing up to high school and college graduations and trying to yell or deport the graduates because they’re about to come enter the workforce and take American jobs. Because it’s sort of intuitive in that context that people don’t take jobs. So it very much gets this point of like, well, is it really then about the economics, to your point?
David Golstein: No.
Roge Karma: I think it’s funny. You actually also see a similar flip-flop on housing. I talked earlier about how republicans often pretend that immigrants are only workers but not consumers. Well, on housing, it’s the opposite, immigrants are only consumers who buy up and bid up the price of your housing, but they’re not workers who also help build the housing. And for the record, there was another study on that same Secure Communities program that looked at what was the effect on housing costs during these deportations.
And because immigrants make up about, just undocumented immigrants make up about a quarter of the construction workforce. What you found during the Obama era is that in places where there were higher levels of deportation, you saw the average home price increase by about $50,000 or 16% relative to baseline because there just weren’t as many workers around to produce them. And so it’s this weird political game where we only focus on immigrants generally as opposed to native born graduates. And also where we focus on one side of what immigrants do and who people are, as opposed to another.
David Golstein: Right. You walk through my Seattle neighborhood and you look at somebody getting a new roof put on, and I will tell you that not a single one of those guys up on the roof who don’t have a rope attached to secure them hammering on shingles, not a single one of them speaks English as their first language. It is an entirely immigrant workforce taking the dangerous shitty jobs on a hot day unsecured on a steep roof.
Nick Hanauer: Yeah, absolutely.
David Golstein: Until they fall off, and then they replace them with another immigrant.
Roge Karma: Exactly. And to your point, I think both of you have rightly brought up the actual politics of this. And I will just say in terms of the public opinion research, you don’t even just have to look at the messaging from the Republican president right now. Messaging around poisoning the blood of our country on the campaign trail, et cetera. It’s clear this appeal is never fundamentally about economics.
Nick Hanauer: No, it’s just racism.
Roge Karma: And then when you dig into the public opinion data, it’s also not true that it’s primarily about economics. Actually, one of the highest polling messages or one of the highest polling policies is bringing in more immigrants to fill labor shortages. When Pew did a big study on this in the fall, it turns out where anti-immigrant sentiment is the highest is actually among older individuals living in mostly rural states. Many of them who are retired. And where it’s the highest is people in young workers in big cities, where immigrants are the most common. And so you just look at that demographic fact and it’s like, wait a minute, if it was the people who are directly competing with immigrants for jobs, those aren’t the people who are mostly opposed to immigration, it’s actually a lot of times the people who are least exposed to that kind of job competition.
Nick Hanauer: Yeah. They’re just racists and disconnected from the diversity that is typical of big cities.
Roge Karma: I think it’s tricky because I definitely think there’s racism and xenophobia that’s a part of it. The more I dug into the literature, there also is a lot in there about what’s called chaos theory or locus of control theory, that a lot of people’s intuitions on immigration come out of a worry about control, about chaos, about order. And you saw in 2024, one of the biggest public opinion shifts in American history, where Gallup asks a question every year, “Do you think immigration should be increased, kept the same, or decreased?” And in 2020, only 28% of Americans said it should be decreased. More Americans said it should be increased.
And then just in 2024, just four years later, the percentage of those who want it decreased had nearly doubled to 55%, the first time that there was a majority who wanted immigration decreased since the early 2000s. And just to put that shift into context, that’s a much bigger and faster shift than even the turnaround on gay marriage. So it was this huge shift, and it wasn’t that Americans all of a sudden got more xenophobic, I think there’s definitely a segment of them that we’re always that way. But I think a lot of it has to do with the perception that the southern border was out of control, that if you’re living in New York or Chicago, you’re looking around and there’s immigrants sleeping on the streets, and it feels like the city does not have a handle on this.
And so I think actually a lot of anti-immigrant sentiment, like public sentiment comes out of this desire for control, which is why actually a lot of times countries like Canada can bring in much higher levels of immigrants that we do, but because they do it through a legal system that doesn’t have nearly the same level of backlash as when we do it in this very chaotic way, and ironically, the chaos itself has been caused by the dysfunction of our immigration system, which goes a lot back to Republican policy decisions to not fix our broken immigration system. So Republicans often benefit from this chaos because it turns people against immigrants, and they also sow the chaos by basically torching every possible immigration reform that would fix it and make it more seamless.
David Golstein: It’s weird that a party that benefits from making things worse would support an agenda that makes things worse.
Roge Karma: Wild thought.
Nick Hanauer: Exactly.
David Golstein: It’s almost as if, Nick, that it’s a sociopathic party intent on seizing authoritarian control by any means possible, no matter who they hurt. But this is a show about economics, not politics. Let’s
Nick Hanauer: So what should we do? What should we do?
David Golstein: Yeah, that was the next question.
Nick Hanauer: What would you do if you were in charge?
David Golstein: Even though you don’t really address it in that piece in The Atlantic, but sure. Yeah, legal immigration?
Roge Karma: I think it is going to be really hard to fully change the way we talk about immigration. And there have been lots of efforts to solve this problem that have failed. When I think of the two things that really breed anti-immigration sentiment, one is chaos, like I was talking about before, and the second was scarcity. And on the chaos point, I think the point somewhat counterintuitively right, is you need a more robust, orderly immigration system. I think a much simpler way to get people to be more supportive of immigration is to just make it a more orderly process that people don’t feel like is constantly spinning out of control. And so ironically, more immigrants legally is actually a way to increase support for immigration because what people don’t like is chaos. But the second thing that breeds anti-immigration sentiment-
Nick Hanauer: It’s not just chaos, they hate it when people don’t follow the rules, right?
Roge Karma: Yes. That’s why so much of this is about crime.
Nick Hanauer: Yeah. Or just, “You came here and now you get benefits and blah, blah, blah, blah.” But if people come through legally and it’s all organized, and there they have to pay taxes and the rest of it, it’s much less. So go on.
Roge Karma: I think that is one very important step, is just a more orderly process of the border and a more robust legal process for immigration. But that is going to be difficult. The other thing, though, that I think really breeds anti-immigration sentiment is scarcity. When people feel like there isn’t enough to go around, they’re much more likely to turn on immigrants. You saw this in the campaign with housing. Vance and Trump were able to weaponize that issue exactly because there was a housing shortage. They were able to say, look, your housing prices have gone up, you can’t find a home, it’s because all these immigrants are coming in. But if you can get rid of that precondition, if you can eliminate some of that scarcity, it takes a lot of bite out of the anti-immigration argument. And so I think there is a case for both a politics of more sort of abundance and building, as has been all the talk of late, that would actually help with some of this in an indirect way, in addition to building a more robust legal system.
David Golstein: But why would I want to build more housing when we can just kick out those migrants, and I can have one of those migrant worker shacks on in the middle of a hot farm field? I mean, that’s where we can all sleep, bunk share, and sleep 12 to a shack. That’s what we want for-
Roge Karma: The American dream.
David Golstein: … native-born workers.
Nick Hanauer: But just to be clear, if we had not spent the last 50 years impoverishing the majority, while enriching a tiny minority at the top, I wouldn’t have to pay money to have this podcast either. Just to be clear.
David Golstein: Oh, poor Nick.
Nick Hanauer: It wouldn’t just be immigrants that would be better treated, like, obviously, a lot of the social pathologies that characterize our present economic and political arrangements would disappear, right?
David Golstein: Yeah. Well, if we want to get rid of pathologies, there are some deportations we need to do and-
Nick Hanauer: Yeah, exactly.
David Golstein: …. maybe we start with Elon Musk, Peter Thiel, and Mark Andreessen.
Roge Karma: Actually, the only immigrants we want are white South Africans, so I’m going to have to go there.
Nick Hanauer: Exactly.
David Golstein: Apparently. Final question, Nick?
Nick Hanauer: Why do you do this work?
Roge Karma: Well, the first answer is because I love it. But the second one is because I think the way that our economy works is important. It impacts every single one of our lives, and yet so much economics journalism is written for insiders. It’s written in technocratic, jargony language. It’s written as if the most important thing is what happens at the stock market. And I really view my job as trying to peer behind the veil and make this mysterious, often opaque, but deeply important machine we call the economy more legible and accessible to the people who it impacts.
David Golstein: Great. Well, thank you.
Nick Hanauer: That’s great. Well, thank you so much for being with us. A fascinating discussion.
Roge Karma: Thank so much for having me.
Nick Hanauer: And nice work.
Roge Karma: I really appreciate it.
Nick Hanauer: Write more fun things.
Roge Karma: I’ll do my best and keep making such great podcasts y’all. Big fan.
Nick Hanauer: Goldie, I just love the connection, both actual and implied, between this discussion about immigration and the discussion of the minimum wage.
David Golstein: Right.
Nick Hanauer: I think it’s so cool that Andrew Card was at the center
David Golstein: Of David Card, right?
Nick Hanauer: I’m sorry. David Card was at the center of both of these natural experiments, one on minimum wage, one on immigration. And effectively found the same thing in both, that the reality on the ground, even in extreme cases, implied that the orthodoxy was just wrong.
David Golstein: Right. That it’s very simple if you open up your Econ 101 textbook, you’ll see it on the minimum wage. They use that as the canonical example of supply and demand, the demand curve, that in that case, if you raise the price of something, people will purchase less of it. And the inverse is, if you have a larger supply of something, then the price of it will go down. So if you bring all of these immigrant workers into the workforce, and largely though not exclusively, obviously, Trump has made a point of trying to deport PhD students and people doing important scientific research as well. But let’s be clear, it’s largely focused on low wage, lower skilled workers that somehow if we deport all of them, you’ll have fewer workers, and that means things will be better for lower skilled native-born American workers because they’ll have less competition for those jobs, and therefore, somehow employers are going to pay them more, which of course, if that was true, we wouldn’t need a minimum wage.
Nick Hanauer: That’s right.
David Golstein: I mean, if you look at what… It’s very clear from the minimum wage that, in fact, there was no equilibrium price as the book tells you, wages were suppressed, and the reason why employers didn’t want to pay more it’s power.
Nick Hanauer: Power.
David Golstein: So much of it is about power. So this gets to, I think, the solution that Roge brings up, which is if you don’t want so much illegal immigration, if you don’t want so many undocumented workers, let’s have more legal immigration. Obviously, they’re coming here for a reason. There’s jobs for them. If there weren’t jobs for them, they wouldn’t be coming. They’re coming here for the jobs. And the great thing about legal immigration, and this is the way it used to work before we cracked down on the border, is that they don’t come here and necessarily stay. A lot of people are coming here, setting some of their money back. They plan to retire back home. They go back and forth across the border. They may be here some years and not here other years. They’re filling the jobs when they’re open.
But also, as we talked about, there’s so much less chaos when there is a legal and organized way of bringing people into this country, a country, by the way, which is, it’s funny to use the word native, everybody, but Native Americans are children of immigrants, children, grandchildren, great-grandchildren, whatever it is, all the white people, which is who they-
Nick Hanauer: Are immigrants.
David Golstein: No white person here is not descended from, is not an immigrant or descended from immigrants, Mr Drumpf included, or whatever that family name was. I hate the topic because it’s so horrible, but I love the topic because, again, it shows the risks of what I’ve started to call equilibrium brain. The language of economics, even if you didn’t take that Econ 101 textbook, we all know about supply and demand.
Supply and demand, we all have this idea. Even if you don’t in your mind, visualize that downward sloping, well, it’s a straight line in the book somehow, not a curve. But we all have this idea, and it’s just not true in the real world, particularly in things like the labor market. The market for labor is not the same as the market for apples. The market for apple pickers it’s not the same as the market for apples, because there is so much power involved, there’s so much friction involved, and apples don’t consume things, people do. I mean, it’s really, you said complicated, the word is complex.
Nick Hanauer: Yeah. Right. Oh, for sure.
David Golstein: There’s a difference between something being complicated and something being complex, and it’s a very, market economies are very complex, and again, you know it’s not true and they don’t believe it because they’re all worried about declining fertility rates, that they know that somehow if we went in and we removed 10% of the white population, just like “We’re going to get rid of 10% of the white people, but don’t worry-
David Golstein: We’re only going to get… We’re going to get every white person without a high school diploma. We’re going to send El Salvador.”
Nick Hanauer: Deport.
David Golstein: Right. “We’re going to round them up and deport them.” People would be outraged, and they’d make the “Oh, that’s terrible for the economy. Who’s going to do those jobs?” But if it’s brown people, that’s different. It just shows you the hypocrisy. They don’t even believe it deep down, not even deep down on the surface. Anyway, if you want to read more on this from Roge, we will provide a link in the show notes to his piece in The Atlantic, The Truth About Immigration and the American Worker.
Speaker 5: Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate, and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram, and Threads @ @pitchforkeconomics. Nick’s on Twitter and Facebook as well, @NickHanauer. For more content from us, you can subscribe to our weekly newsletter, The Pitch, over on Substack. And for links to everything we just mentioned, plus transcripts and more, visit our website, pitchforkeconomics.com. As always, from our team at Civic Ventures, thanks for listening. See you next week.