Immigration Lessons from Texas

In his August 14 column, “The Texas Unmiracle,” Nobel-Prize-winning economist and New York Times columnist Paul Krugman arrives at similar conclusions about immigration and employment as NumbersUSA. First, Krugman acknowledges that immigration, in part, drove Texas job growth (more people = bigger economy) during the recession. Second, Krugman notes that job growth hasn’t kept up with population growth in Texas (more jobs, but high unemployment). Finally, Krugman warns that the influx of workers has put downward pressure on wages (supply and demand).

Excerpt:

But what does population growth have to do with job growth? Well, the high rate of population growth translates into above-average job growth through a couple of channels. Many of the people moving to Texas — retirees in search of warm winters, middle-class Mexicans in search of a safer life — bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low — almost 10 percent of Texan workers earn the minimum wage or less, well above the national average — and these low wages give corporations an incentive to move production to the Lone Star State.

So Texas tends, in good years and bad, to have higher job growth than the rest of America. But it needs lots of new jobs just to keep up with its rising population — and as those unemployment comparisons show, recent employment growth has fallen well short of what’s needed. -emphasis added

Krugman concludes that lowering wages at the national level would ultimately result in fewer jobs because Americans would be less able to cope with the challenges of this economy with less income. Krugman warns against the U.S. adopting Texas’ strategy. He neglects, however, to point out that the federal government is already importing workers at a faster rate than the economy creates jobs. This floods the labor market, puts downward pressure on wages, and results in too many workers chasing too few jobs.

Politicians who claim immigration is a solution to our unemployment crisis should take note.

JEREMY BECK is the Director of the Media Standards Project for NumbersUSA