Maybe Cuban refugees did hurt unskilled Miamians after all

How do refugees affect the wages of natives in the places they settle? I’ve written on the (few) studies of this effect that I’ve seen, but a new paper contradicts one of them.

David Card’s 1990 study of the Mariel Boatlift, where 125,000 Cubans fled the Castro regime to settle mostly in Miami, found that there was no negative effect for unskilled natives. Card’s results suggested that the city’s existing garment and agricultural industries absorbed the extra workers and the influx did not cause downward pressure on the wages of unskilled workers already in Miami.

But a new working paper by Harvard’s George Borjas seems to undermine Card’s conclusions. Borjas looks at a particular sub-section of Miami’s unskilled workforce, high school dropouts, and compares Miami to a different set of cities to Card which, says Borjas, were more like Miami in terms of employment growth before the Boatlift took place.

When you do that, the Boatlift seems to have affected high school dropouts’ earnings very badly: they fell by between 10 and 30 percent, relative to the wages of high school graduates and college graduates. The gap between white and black workers’ wages grew substantially too – black workers’ wages fell by 20 percentage points.

The chart below shows the percentage difference in high school dropouts’ wages relative to college graduates’ wages during this period – the different ‘placebos’ show how dropouts’ wages performed in other samples of cities over the same period.

Screen Shot 2015-09-18 at 13.36.19

Borjas concludes that the Boatlift put significant downward pressure on the wages of natives with skills similar to those of the migrants, which may also be the case with other similar influxes of immigrants.

It’s an important paper for anybody interested in the immigration debate. But there are also some important things that should make us cautious about extrapolating too much from this.

Most notably, the relative wages of high school dropouts recover entirely by 1990 – the effect Borjas has found only holds in the short-run. And Borjas’s study shows that the impact was negative for people at the bottom, but Card’s conclusions about the impact on native workers more generally still seem reasonably solid.

The Mariel immigrants were ‘exogenous’ to Miami’s economy – they did not come primarily to get jobs, but to escape Cuba. So the effect might not apply at all to economic migrants from other EU countries who are coming to the UK to work. But for refugees fleeing war, Borjas’s findings might well be repeated.

David Card may reply with some objections that throw doubt on some of Borjas’s choices, and as some people have pointed out a very influential paper by Borjas from 2003 was later undermined itself by replication and slight changes to assumptions. This doesn’t mean we should be skeptical of Borjas in particular, but it is a reminder to avoid drawing firm conclusions from just a couple of studies. Whatever their findings, more research like this can only be a good thing.

It’s free speech that will defeat Islamist preachers in universities

I suspect most readers of this blog will agree with Barack Obama’s basic point in the video above, which is that by banning racist books and right-wing speakers to ‘coddle’ oversensitive types, universities are failing students.

This is a problem we have in the UK as well – Brendan O’Neill and Tim Stanley were barred from speaking at a debate about abortion they’d been invited to take part in at Oxford last November, and certain parts of the social justice movement have been waging a quiet war against ‘trans-exclusionary’ radical feminists (and vice-versa, perhaps) by having them barred from university conferences and events, heckling them when they speak, and so on. People like James Watson have been made untouchable for suggesting that there may be genetic differences in IQ between different races.

This is not entirely a left-wing phenomenon. Today David Cameron has ‘named and shamed‘ universities ‘that regularly give platforms to hate preachers who are determined to undermine British values’. It’s not clear to me what ‘British values’ are, or what’s so bad about wanting to undermine them. Is belief in the NHS a British value, making free marketeers dangerous too? Is belief in democracy, excluding Jacobite restorationists from campuses and the like?

The obvious response to this is that these people will not just ‘undermine British values’ but actively encourage students to kill other people. Of course we already have laws against incitement to violence (excessively strict ones, some would say) but perhaps these don’t work here. A roundabout suggestion that the, ahem, Zionists are controlling the media and, you know, maybe these ISIS fellas aren’t so bad after all is not – and should not be – illegal, but might plant a seed in enough people’s minds to lead them to kill.

No doubt there is something rotten in British universities, but I wonder if part of the problem is that opponents of these speakers are heavily restricted by the sort of people Obama attacked yesterday.

How easy is it to oppose Islamism on university campuses? Being anti-abortion is unpopular, but Islamophobia is so forbidden that Ed Miliband proposed to make it a hate crime. Last year Plymouth University’s Islamic Society tried to have a speaker from the anti-Islamist Quilliam banned from speaking there. The year before that, a mob of students blocked Israel’s deputy Ambassador to Britain from giving a lecture at the University of Essex. There is no shortage of other examples either.

So perhaps institutionalised political correctness is allowing Islamists to get a free pass at universities without being challenged, as it has arguably contributed to child abuse in Rotherham and elsewhere. If feminist comedian Kate Smurthwaite is too edgy to be allowed to perform to Goldsmith University students, what hope do harsh critics of Islamism like Maajid Nawaz or Douglas Murray have?

Banning hate preachers would mean we must also accept the principle of banning Maajid Nawaz for pushing back against them, Tim Stanley for opposing abortion, and Germaine Greer for showing insufficient respect to Caitlin Jenner. It concedes too much.

Open debate is too valuable to give up in places where it is supposed to thrive. It shouldn’t be harder for Islamists to speak at universities – it should be easier for their enemies to contradict them. The problem is not what is being said, but what is not being said.

Six points about the Trade Union Bill

  1. Making striking more difficult might be a good thing. The most controversial part of the bill is the part requiring at least 50% turnout in strikes overall (so 25% of members must vote in favour), and for public sector strikes the backing of at least 40% of those eligible to vote. This certainly does make striking less easy, but it hardly makes it impossible. If workers really feel that they need to strike, they can still do so, provided they get 25% or 40% of total members (for private and public sector workers respectively) to agree with them. This does make it harder for people like Len McCluskey and Mark Serwotka to call strikes that most union members don’t want, though.
  2. Most workers aren’t in a union. Only 14% of private sector workers and 54% of public sector workers – 25% overall – are in a union. That means that strikes, even if they are good for union workers, only benefit a small number of workers. And everyone else is inconvenienced by them: strikes can be costly and time-consuming for people who use the services that the striking workers provide.
  3. People who are in a union are generally middle-income workers. According to the ONS, “Middle-income earners were more likely to be trade union members than either high or low paid employees. About 38 per cent of employees who earned between £500 and £999 were members of a trade union, compared with 21 per cent of employees earning £1,000 or more. The proportion of employees earning less than £250 who were trade union members was 15 per cent.” Also, “Employees in professional occupations are more likely to be trade union members” (this includes jobs like nurses).
  4. Why shouldn’t firms be allowed to hire agency workers to fill in for striking workers? Workers who take part in official strikes (as defined here) are protected from being fired, except after 12 weeks of striking if the employer has tried to settle the dispute. This privilege is popular but if the only reason to stop firms from hiring replacement workers is that it makes strikes less powerful it’s not clear why this is a bad thing.
  5. Some parts of the bill do seem draconian. Making strikers wear armbands may be justifiable if there is a problem with identifying workers who are actually working and who are taking part in the strike – I don’t know if this is the case. Requiring picketers to give their names to the police seems entirely overboard, though, and David Davis is probably right that it’s unnecessary.
  6. Strikes do cost money, though some might have a surprising upside too. Between 2011 and 2014 (inclusive) about 3 million days worth of labour were lost directly because of strikes. That’s costly and does not include the time lost from people working from home, leaving work early, coming in late, etc. (Giles Wilkes points out that over the same period 520 million days were lost to illness. With that context, 3 million doesn’t sound very high.) But there may be surprising upside too – a Cambridge paper released today says that the February 2014 tube strike was a net positives in efficiency terms, because 1 in 20 people who found a new route to work stuck with it after that, and the long-term savings to them from that outweigh the daily losses to the other 19 in 20 workers. I’m not sure if that scales to other strikes, but it’s quite a nifty finding either way. (NB: I haven’t read the full paper yet, so I can’t vouch for it.)

What have the Syrians ever done for us?

Anton Howes, an economic historian who studies the causes of the Industrial Revolution, writes on refugee inventors:

Another was Johann Jacob Schweppe (1740-1821), whose company lives on of course as a manufacturer of tonic water. Schweppe’s major contribution was to apply Joseph Priestley’s experiments on carbonating water to develop a machine that could mass-produce it, and then to develop it into a marketable product. Schweppe was the son of a peasant from Hesse. Lacking the strength for agricultural labour, he was apprenticed to a travelling tinker, who recommended him to a silversmith. He eventually ended up settling in Geneva.

Soon after taking his business to London in 1792, where he set up an aerated water factory on Drury Lane, the turmoil in France intervened. Fortunately, his daughter managed to join him before France declared war on Britain in 1793. Fearing the government’s reaction, Schweppe successfully appealed for the right to stay. He eventually returned to Geneva in 1802. France having annexed it in 1798, he returned to find himself a French citizen. (By the way, contrary to what it says on Wikipedia, his business did not fail – it was actually extremely successful and he simply sold his majority stake).

But Anton’s list is of Europeans. What about Syrians? I was quite surprised to find out that Steve Jobs is half-Syrian, but the list goes on:

First up, there’s Ayman Abdel Nour, a one-time university friend of Assad’s at the University of Damascus, where he studied engineering. He became increasingly disillusioned with the regime, fleeing to the UAE in 2007, and then the US, where he is editor-in-chief of an online paper focusing on Syria. However, he has since developed and patented a sub-surface irrigation system, dubbed the Hydramiser. I don’t know much about irrigation, but it seems like a pretty helpful innovation for arid countries attempting to overcome their inherent agricultural disadvantages.

Read Anton’s whole piece for more. I don’t know of any inventors who are both Syrian and refugees, but perhaps one day that’ll change.

And yes, I am aware that there are cultural differences between Syrians and Britons. Lots of people said this to me after my own piece that argued that accepting refugees might not be so bad in the long-run, economically speaking. Indeed Sweden, which in Europe takes by far the greatest number of immigrants from the Muslim world per capita, seems to have quite a serious crime problem.

But on the other hand London has done rather well out of immigration. The Asians who fled Uganda have been a success story in Britain, and the Arab migrants to the United States have integrated very well too. We should bear the potential problems with immigration in mind, but the fact that there are costs does not mean we should ignore the benefits too.

Let them in

In City AM today I have a piece on the refugee crisis, arguing that the costs that many are (understandably) worried about may not actually be a problem:

A recent study looked at the impact of Yugoslav refugees on Danish workers in the 1990s and 2000s. Because Denmark’s resettlement policy distributed these refugees across the country without respect to local labour market conditions, this is a case study in how “exogenous” immigration affects natives. . .

Instead of starting a race to the bottom, as some feared, this influx of workers allowed the Danish economy to become more complex. Adam Smith’s “division of labour” increased, as jobs became more specialised and hence more productive. . .

Crime is on people’s minds too. And it’s true that asylum seekers do seem to increase property crime rates in the places in Britain they go to, though interestingly they seem to reduce violent crime rates.

But this seems to be a consequence of the tight restrictions that effectively prohibit asylum seekers from working for at least the first 12 months that they spend in Britain. If we liberalised those rules, we could solve that problem.

It’s important to get the numbers right. The UK has accepted around 5,000 asylum applications from Syrians, not 216 as many people are claiming – that 216 is the number of Syrians we’ve actually evacuated from Syria directly. But I think there’s a strong case for letting in many more than that.