Imagine I tell you I’ve been looking for a research assistant, but my pursuit has come up empty. I simply cannot find any applicants who have the requisite skills. I contend there must be a “shortage” of research assistants. Imagine the many research ideas that may never be put down on paper because I don’t have the help I need.
It’s about time the government does something about it!
“How much does the job pay?” you ask.
“Minimum wage,” I reply.
If you are like most people, you would have an amused reaction: “Of course you can’t find anyone – you’re not paying enough!”
As obvious as it may seem, this point seems to be lost on those who believe the US has a “labor shortage” that can be solved only through more immigration.
In unveiling its budget proposal this week, Gov. Hochul’s office echoed the “shortage” rhetoric. New York has a shocking 470,100 “undocumented” workers — that is, illegal — and if the state loses any of them, it’ll suffer, she claims.
“The potential deportation of undocumented immigrants could further exacerbate the state’s population loss and labor shortages,” the proposal notes. “Stricter immigration rules . . . will create worker shortages and put upward pressure on wages in affected sectors.”
If President Trump’s mass deportation plan comes to fruition, would it really leave New York without the workers its economy needs? No. In reality, shortages should not exist in a market system where the price is allowed to rise.
Just as the price of consumer products such as gasoline will rise as demand increases or supply diminishes, so too should the price of labor.
When employers instead complain of a shortage, what they really mean is that they cannot find anyone to work at the low wages they are offering.
They want more immigrants to increase the supply of labor and keep the market wage from rising. At that, they have often been successful.
Even in the supposedly high-demand STEM field, real (inflation-adjusted) compensation has been rising by an average of just 0.15% per year.
The governor’s report warns that 70% of the state’s construction workers are foreign-born, raising the prospect that Americans will not do certain jobs.
Again, however, Americans will do jobs when the employers are willing to pay based on what supply and demand dictate.
According to a 2018 report from the Center for Immigration Studies, workers in only six of the 474 civilian occupations identified by the Census Bureau are majority-immigrant, and none are majority illegal.
Nationwide, about two in three construction laborers are native-born. Even 51% of maids and housekeepers are native-born.
The labor market in New York would need some time to adjust to a sudden decrease in immigrants, but adjust it would.
That adjustment would ultimately be beneficial. For one thing, it would induce employers in the state to recruit from historically marginalized groups.
It would also compel policymakers to address the socially and economically damaging phenomenon of American men dropping out of the labor force entirely.
In 2024, 26% of working-age, native-born men in New York were neither working nor looking for work, up from 21% in 2000 and 16% in 1970.
Whether the solution involves a higher minimum wage or less generous welfare spending, tackling the problem would become a top priority once employers do not have illegal immigrant labor to fall back on.
Speaking of welfare, the cheap labor that immigrants offer to employers is not so cheap for taxpayers. Based on data from the Survey of Income and Program Participation, 54% of immigrant-headed households in 2022 received some type of means-tested anti-poverty benefit — cash, food, housing, or medical care — compared to 39% of native-headed households.
Whether the immigrant head was legal or illegal made little difference in the analysis, largely because immigrants of any legal status can receive benefits through their US-born children.
Cutting down on illegal immigration would save New York taxpayers some of the money they must contribute toward federal programs such as Medicaid, as well as toward the various state welfare benefits.
It once would have been hard to imagine a governor from the Democratic party — the erstwhile party of the working class — putting out a report warning against a policy that causes “upward pressure on wages in affected sectors.”
As recently as 2000, the New York Times editorialized against illegal immigration on the grounds that it hurts low-skill workers. How times have changed!
Progressives evolved from opposing immigration because it depresses wages to supporting immigration because it depresses wages. They had it right the first time.
Jason Richwine is a resident scholar at the Center for Immigration Studies.
