A great many Republicans, especially U.S. Rep. Rod Blum, believe an influx of migrants has placed a considerable amount of strain on household finances of native workers. The reasoning is that native workers are forced to compete with foreign workers in what will be a more crowded labor market.
In a partial equilibrium model, where all other factors are constant, this is technically true, but these kinds of models don’t explain the theoretical and empirical reality, which is far more complicated.
With a general equilibrium model, you would see dynamic responses and adjustments that either mitigate or compensate for wage losses that would be seen in the simple partial equilibrium model.
First, with increased availability of workers, firms are more likely to expand their productive capacity, if there is an educational and skill alignment with new entrants.
Second, because immigrants have a greater propensity to be more geographically mobile, they have helped to stabilize business cycles in local and national economies by addressing the mismatch with supply and demand of labor.
Third, productivity per worker has increased at a constant rate since 1960, and peaked in 2007 when the immigrant population was at its highest. So there wasn’t a crowding-out effect that disincentivized capital expenditures.
Fourth, although native workers with a high school education or less are more vulnerable to competitive pressures, the differentiation in skills and specialization of both groups has limited conflicts.
Therefore, Mr. Blum’s position on immigration lacks merit, which is unsurprising.