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Immigration and Wages

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In the ongoing debate regarding immigration, one argument put forward for limiting immigration is that reductions in the supply of foreign labor will lead to higher wages among native-born Americans. New research indicates that this equation for improved labor market outcomes isn’t quite so simple. As reported by The Wall Street Journal, a team of economists has analyzed the mid-century Bracero program, which allowed nearly half a million seasonal farm workers per year into the U.S. from Mexico.

The Johnson administration terminated the program in 1964, effectively creating a large-scale experiment in the process. Rather than hiring more native born Americans at higher wages, farmers took the opportunity to automate, change crops or simply reduce production. According to the study’s authors, the Bracero exclusion failed to raise wages or substantially raise employment for domestic workers.

Wages in states with the heaviest concentration of Braceros, Arizona, California, Nebraska, South Dakota and Texas, rose more slowly after the program ended than wages in states that had no such guest workers.  

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.