Professor of Economics at the University of California, Berkeley David Card gave a public talk on the economics of immigration and minimum wage laws on March 27. Students, faculty and other Emory community members filled White Hall 208 to capacity to hear Card speak contributions to the field of labor economics.
Card received the 2021 Nobel Memorial Prize in Economic Sciences for his method of utilizing natural experiments to analyze the labor market effects of immigration, minimum wages and education. His award-winning research — much of which was published over 30 years ago — challenged conventional wisdom among economists who relied on models, rather than empirical data to analyze markets.
“Certainly, the textbook that I was taught in by a fairly famous British economist who moved to Canada and was certainly a very liberal-minded person was pretty strongly skeptical of minimum wages, but was fairly positive about immigration,” Card told the crowd. “We think about what’s been going on in economics over the last four years, what we could say is that, importantly, the views that economists had about those topics were largely based not necessarily on empirical evidence, but on a set of … surprisingly simple models.”
Those traditional models, based on Malthusian theory, suggest that increased immigration depresses the wages of all workers in a country, making “everyone worse off,” Card explained. One of Card’s undergraduate students gave Card the idea to study the 1980 Muriel Boatlift, which saw 120,000 Cuban migrants flood Miami within a matter of months, to analyze these effects in the real world.
By comparing the pattern of wages in Miami following the Boatlift to those in other similar cities, Card and his researchers isolated the effects of the “shock” of migrants to the city. They found that, contrary to traditional economists’ expectations, immigration did not have much of an effect on wages.
Despite these results, immigration policy has not yet caught up with the data, Card noted.
“People probably care not just about the labor market effects of immigration but about another aspect of immigration that’s sometimes a little embarrassing to talk about,” Card said. “If you think about when you buy a house, or you move to a neighborhood, or you send your kids to school, what you’re really thinking about is, ‘Who are the other people there?’ And a lot of people are quite concerned about the fact that immigrants don’t exactly look like them.”
Card utilized a similar method to study the effects of a 1992 minimum wage increase in New Jersey by comparing it to Pennsylvania, where the minimum wage remained unchanged. Based on traditional economic models, the New Jersey policy would increase unemployment, since employers would lay off workers to compensate for the additional costs for each employee. After surveying fast-food restaurants on their workforce capacity before and after the wage increase, he found that the wage increase had no measurable impact on the number of jobs available.
Yet, as with immigration, resistance to minimum wage laws abounds, Card noted. He blamed political lobbyists for contributing to the stagnation.
“Minimum wage is one of these super polarizing issues, and with more polarization, it’s become a super symbolic issue,” Card said in an interview with the Wheel. “Republicans can’t vote for it no matter why because the Koch brothers will go after their ass and Democrats have to support it no matter what because the EPI [Economic Policy Institute] will go after their ass.”
Laurens Van Doeveren, the deputy counsel general for the Netherlands, was one of the event attendees in the crowd on Monday. He said that Card clearly demonstrated the economic benefits of international migration and cooperation.
“It’s my job to build new partnerships between the U.S. Southeast and the Netherlands, and I think his research will help us to understand further what the economic benefits are on having more national cooperation trade, including the exchange of people through the labor markets,” Van Doeveren said.
Noah MacDonald (25L), a third-year Ph.D student studying economics, said he was a “big fan” of Card.
“I've read a lot of his papers and stuff, but hearing that an undergrad came up with his idea for the Muriel Boatlift, that was probably one of the coolest parts,” MacDonald noted. “He just kind of gave context to stuff that we hear a lot about in labor, but never really see the full picture of.”
Card also met with undergraduate economics majors, faculty, graduate students and alumni during his visit. He gave another talk later in the evening during the annual Economics Banquet in the Hotel Grand Ballroom at the Emory Conference Center about affirmative action.
Card is the expert witness for Harvard College (Mass.) in the Students for Fair Admissions v. President and Fellows of Harvard College U.S. Supreme Court case, which threatens to eliminate the consideration of race in admissions policies. Though Students for Fair Admissions, a non-profit which advocates against affirmative action, argues that Harvard has discriminated against Asian American prospective students, Card analyzed Harvard’s admissions data and reported no evidence of such discrimination.
Card seemed confident, however, that the Court will strike down affirmative action. He said in his Emory talk that selective colleges who want to enroll diverse classes following the ruling will have to do so indirectly without explicitly examining race.
“They’re gonna be targeting something that’s correlated with the preferred group status,” Card said. “For instance, they’re maybe targeting neighborhood or location or urban role, status or family income.”
In an interview with the Wheel, Card said that he came from a low-income family in rural Ontario, Canada and, in his entire economics career, he has never met someone from a similar socioeconomic status.
“I think what we often find in economics is that … if you’re a really good kid at a really s*****high school in Central Valley (Calif.), you’re probably actually really brilliant,” Card said. “But, no one’s ever helped you very much. Those kids are way underperforming because of their context, and then if you put them in a better environment, they do great.”
