Lisa Venus's picture

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  by  Lisa Venus

Inequality is at the root of many of our nation's economic, political, and social injustices. We are witnessing its devastating impact starkly as we battle a pandemic that has led to historic job losses and the threat of a deep recession. Many of our essential workers - consisting of large numbers of Blacks, Hispanics, and women who were economically vulnerable before the pandemic - have been potentially risking their lives to remain employed amidst outbreaks. For the unemployed, there is grim uncertainty.

Undoing policies that contribute to inequality is paramount to establishing a more just society.

A New York Times column from this past Spring illiustrates how immigration policy can be a contributing factor to inequality, most notably when the immigrants are in lower-income positions. As part of The America We Need series on how we can emerge from the coronavirus crisis more equitable, New York Times Senior Editor Kevin J. Delaney includes in a New York Times op-ed the Sal Khan video entitled "Looking at Trends in Inflation Adjusted Income Since 1980." In the video Khan says:
"Another potential lever to think about is immigration policy which, from a wage point of view, could have a similar effect as technology or globalization. If you have an increase in supply of lower skilled labor, economics will tell us that the price for that labor would be suppressed."

Khan elaborates on immigration and inequality, and the politics behind the issues, in the comments section for the column, writing:

@Jeff
Thanks Jeff. I do think that too often this gets painted as a right vs. left issue. The left is stereotypically more sensitive/empathetic towards the issue of inequality and immigration, but the reality is that these can be in tension with each other. If you increase supply of labor, basic economics tells us that it will depress the price of labor (i.e., wages). Globalization has also been generally supported by both parties and it has a lot of positives, but it too does create wage pressure in industries that can be offshored. I try to be careful not to project my personal views into the analysis, but it is important for folks to understand these levers.

His comment was in response to this reader:

Great explanation, especially the first graph. It shows an honest look at the data and likely levers. Too often data is used to advocate and is selectively chosen. Specifically, many other charts show pre-tax income and no government benefits on the x-axis. This exaggerates disparity. Quite literally, increasing taxes on the rich (i.e. a more progressive tax system) would have zero impact on such a pre-tax graph. Also, this accurately shows that immigration depressed low-income wages. Too often, this economic fact/lever is forbidden to be mentioned in this discussion. Honest discussion like this will really allow us to tackle this real issue in our society.

Below are more readers' comments discussing inequality and immigration.

Kurt Pickard writes:

Globalization, education and immigration are the three main culprits of income inequality in the United States. NAFTA started the drain of blue collar jobs in the United States and cumulated[sic] with our dependance[sic] on China for most of the goods we consume today. The industrial backbone we had during the post war[sic] era is no longer. Education used to be the key to a better financial future but we weren't smart about what education we received. Liberal arts easily outstripped the sciences when it came to getting a higher education in America. Immigrants helped to further competition in non manufacturing and service sector jobs in a nation that was already hemorrhaging middle class jobs do in great part to poor trade policies of our government. The way out is to increase the demand for American labor, bring back industries vital to our economy and focus education on that which is relevant to growing and supporting our economy
Eric writes:
@Jeff
Immigration impacts inequality in two ways - depressing wages of the working class (see Krugman), and, via population growth, increasing the cost of homes and rent, driving increases in the price of everything else (see Vigdor, and also Turchin.)
In a related tutorial, Khan connects policies that increase immigration to lowered wages:

LISA VENUS is the Volunteer Coordinator for the Media Standards Program for NumbersUSA

Updated: Fri, Jul 24th 2020 @ 3:21pm EDT

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