Immigration and Wages
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.