Carrier And Comprehensive Immigration Reform

There’s been a lot of criticism from free-market types since President-elect Trump announced the Carrier deal, which will keep around 1,000 jobs in Ohio Indiana (see the Larry Summers take here). Some of that criticism is warranted–in an ideal world, it would indeed be ideal to let the market decide who the winners and losers are. But there is also a lot of hypocrisy in many of the over-the-top reactions.

As an obvious example, I don’t recall much hand-wringing about the excessive labor market manipulation built into the comprehensive immigration reform legislation that President Obama and Senators Schumer, Rubio, et al, tried to ram through Congress a few years ago. So I thought it’d be fun to illustrate just how visible the invisible hand became in that context.

This screenshot is from bill S.744, describing job categories to be covered by a proposed “agricultural worker program.”

s444-jobs

And this screenshot is the section of the bill stating what the salary must be for such jobs–down to the penny and year by year.

s444-wage-rates

It seems to me that if the objective is simply to criticize government intervention in the labor market, the comprehensive immigration reform legislation would have provided ample opportunities. Do we really need Stalinist five-year plans stating precisely what the wage rate must be in particular occupations?

Which brings me to a related question: Who paid whom to get those hourly wage rates written into law?

Author: George Borjas

I am a Professor of Economics and Social Policy at the Harvard Kennedy School.