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Jobs: Wanted and Unwanted

Chris Hayes complains:

There are few things that irk me more than when conservatives advocate for increased immigration for low wage workers by saying that immigrants do jobs that Americans don’t want. I don’t want to buy a slice of pizza for $45. It doesn’t mean I don’t like pizza! I’m not particularly interested in writing a book for the total payment of $9. It doesn’t mean I don’t want to write a book!Raise. The. Wages. You’ll find plenty of workers. I promise.

There are, however, two sides to this. You oftentimes find immigrants working in low margin businesses where the business itself would be non-viable if the wages were substantially higher. All the people who serve pizza in my neighborhood are immigrants. That’s not because no native-born people are “willing” to work serving slices of pizza. As Chris says, pay them enough and people will apply for the jobs. But on the other hand, if you’re going to have to compensate your work force generously, it doesn’t really make sense to have them selling something as cheap as a slice of pizza. You could raise prices but, as Chris says, nobody wants to pay a ton for a pizza. More likely, you’re going to want to get into a higher margin business.

In a very intuitive sense, if you raise wages by restricting the labor supply, you’re going to wind up reducing the total amount of work that gets done in the economy. It’s not that each and every low-skill job that currently exists will become better-compensated. Rather, a number of those jobs proportional to the number of people who’ve been removed from the labor force — most likely the ones where labor costs are the largest proportion of the total cost of the product — will disappear. The remaining ones will then pay higher wages than they used to, and consumers will consume fewer labor-intensive goods

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