In his book We Wanted Workers, Harvard economist George Borjas says the main question in immigration policy is “Who are you rooting for?” (It should be “whom,” of course, but I think we’ve lost that fight.) Every government policy results in winners and losers, those who benefit from it and those who be hurt. Our preferences will be based, at least in part, on who the winners and losers are likely to be.
One of those choices is whether we should favor a tighter or a looser labor market. In a looser labor market, workers have to hustle to find jobs; by contrast, in a tighter labor market, it’s employers who have to hustle to recruit and retain workers. Different people benefit depending on which approach policy takes, but any and all decisions will tip the balance one way or the other.
Those favoring realism and restraint in immigration policy — lower levels of legal immigration and more vigorous enforcement against the illegal kind — are rooting for ordinary workers, especially those without college degrees, and so seek to tighten the labor market to increase their bargaining power. You might call this a Preferential Option for Less-Skilled Workers (to adapt the Roman Church’s terminology).
This week we saw a refreshingly frank display of the opposite perspective, a Preferential Option for the Employer. Tim Gurner, CEO of the Gurner Group, an Australian firm that builds luxury apartments, said the quiet part out loud Tuesday at a conference in Sydney. When asked whether immigration was worsening Australia’s housing crisis (it is), he prefaced his response this way: “We absolutely have to have immigration. Australia doesn’t work without immigration, and if we’re not growing, we’re dead.”
Continuing that thought, he said that “tradies” (Aussie for tradesmen, like carpenters, electricians, et al.) have too much labor-market power as a result of the economic dislocations stemming from Covid and needed to be put in their place. I am not making this up: . . .