In “Debunking the Myth of the Job-Stealing Immigrant” in the new NYT Magazine, we see another tribute to the golden oldie study by economist David Card that because wages in Miami didn’t fall relative to four other cities from 1980 to 1984 despite the Mariel Boatlift of May 1980 increasing Miami’s supply of labor, ergo that proves that the law of supply and demand doesn’t apply to immigration.
But, was ceteris truly paribus in Miami in 1980-84 relative to Card’s control group of other American cities? Or was there anything else boosting the economy of Miami from 1980 to 1984 that wasn’t happening on the same scale elsewhere?
To research this apparently extremely obscure topic in economic history, I spent a half hour on Youtube. I’ve interleaved some video evidence regarding the unique source of Miami’s early 1980s prosperity above and below.
Debunking the Myth of the Job-Stealing Immigrant MARCH 24, 2015
By ADAM DAVIDSON
… The single greatest bit of evidence disproving the Lump of Labor idea comes from research about the Mariel boatlift, a mass migration in 1980 that brought more than 125,000 Cubans to the United States.
According to David Card, an economist at the University of California, Berkeley, roughly 45,000 of them were of working age and moved to Miami; in four months, the city’s labor supply increased by 7 percent.
Card found that for people already working in Miami, this sudden influx had no measurable impact on wages or employment.
His paper was the most important of a series of revolutionary studies that transformed how economists think about immigration. Before, standard economic models held that immigrants cause long-term benefits, but at the cost of short-term pain in the form of lower wages and greater unemployment for natives. But most economists now believe that Card’s findings were correct: Immigrants bring long-term benefits at no measurable short-term cost. (Borjas, that lone dissenting voice, agrees about the long-term benefits, but he argues that other economists fail to see painful short-term costs, especially for the poor.)
… Using the 7 percent figure from the Mariel boatlift research, it’s possible that we could absorb as many as 11 million immigrants annually.
Here’s Time’s 1981 cover story on Miami:
Lowenstein is enormously impressed by Card’s first immigration study, which appeared to showed that wages in Miami did not fall after the Mariel boatlift of Cubans of April 1980, which increased the Miami labor supply by seven percent:
“Card’s Mariel study hit the cloistered world of labor economists like a thunderbolt. All of 13 pages, it was an aesthetic as well as an academic masterpiece…”But, of course, the Law of Supply and Demand applies ceteris paribus (all else being equal).
So was all else equal between Miami in the early 1980s and the four control cities that Card used for comparison? Could there possibly have been anything else going on in Miami a quarter of a century ago that was driving up wages by injecting uncounted billions into the local economy?
There’s a famous book about economists by Robert Heilbroner called The Worldly Philosophers. But I’ve noticed that economists are strikingly oblivious to the obvious. …
Now, I’m not the world’s worldliest man, but I did spend a week in South Florida during that summer of 1980. And even I noticed that in every bar I visited, the locals greeted rapturously a certain annoying Eric Clapton recording:
If you wanna hang out
You’ve got to take her out
If you wanna get down
Down on the ground
She don’t lie
She don’t lie
She don't lie
Eventually, it dawned on me that Miami was the ultimate cocaine-importing boomtown.
And this fact is not an obscure bit of local economic history—it had a vast impact on popular culture. You might think that economists and economic journalists like Lowenstein would remember the highly memorable 1983 movie Scarface, with Al Pacino playing Tony “Say hello to my little friend” Montana, a Mariel boatlift refugee who becomes the kingpin of the Miami cocaine rackets. Scarface has since become the favorite film of gangsta rappers.
Or, if economists don’t get out to the movies much, perhaps they saw an episode or two of the enormously influential 1984-1989 television series Miami Vice, which fetishized the ludicrous amounts of drug money flowing through Miami in the aftermath of the Mariel boatlift.
But perhaps this clip best sums up why wages were high in Miami in 1980-1984:
Or maybe the chainsaw clip explains in economic terms of return v. risk why wages were high in Miami after the Mariel Boatlift:
Or maybe the helicopter hanging scene explains why Miami workers were demanding ample pay: