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Need for Unskilled Immigrants

An article in Foreign Affairs says that automation will not eliminate the need for low skilled workers. It contributes to the debate about immigration, and how it affects the economy, discussed in previous blogs (such as this one). The article says:

Undoubtedly, truly revolutionary changes have occurred in how people communicate, seek information, organize and process data, and entertain themselves. But the notion that the rapid technological change in some sectors of the economy in recent decades has accelerated the transformation of the entire economy is wildly off the mark. In fact, the growth of economic productivity in industrial countries by the standard measure of growth of “total factor productivity” (which assesses productivity by dividing total production, or output, by its costs, or inputs) has been considerably slower in recent decades than it was between the early twentieth century and 1970. Nearly every developed country has experienced a substantial deceleration in productivity growth since 1980.    

Meanwhile, the supply of workers for manual, nonroutine tasks has markedly decreased in rich industrialized countries, thanks to dramatically lowered fertility and rising levels of education. The number of open jobs is increasingly out of sync with the number of domestic candidates available to fill those jobs. The U.S. Bureau of Labor Statistics Occupational Outlook Handbook forecasts that, between 2021 and 2031, the occupational categories that require less than a college degree and for which existing median earnings are less than $40,000 will see a net rise of more than five million new jobs, with home health and personal care aides adding around 924,000 jobs and cooks adding 419,000. But according to UN demographic projections, the number of people between the ages of 20 and 40 in the United States (not factoring in any migration) will fall by more than three million in the same period. The medium-term demographic future of the native born in the rich industrial world is already clear: by the 2040s, there will be millions too few native-born people in developed countries available to perform all the essential, nonroutine, manual tasks in the economy.

After arguing that rich countries should focus on bringing in immigrants to do routine jobs, rather than automating those jobs, the article concludes:

It may seem paradoxical, but the pitfalls of labor mobility in the present are reasons to facilitate even more movement, only through legal and well-devised channels. The benefits of allowing people to move where their labor is needed are huge for all concerned. Rich and democratic societies need to stop blindly pursuing technological advances that economize on precisely what is abundant around the world. Wealthy countries have created strong incentives for their firms and innovators to choose machines over people. It is time to make the bet on a future built by and for people.

If this is true, I remain confused about why we have such a shortage of unskilled labor while hundreds of thousands of immigrants are crossing our southern border annually.

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