Mr. Bruce Hall quotes from Avila in a FRB Cleveland note:
People working part-time who would prefer to be working full-time comprise a large group in the United States. These people may be referred to as working “part time for economic reasons,” “involuntarily part-time,” or “underemployed.”1 Since 1994, there has been an average of 5.4 million underemployed workers in the United States, rising to more than 9 million during the 2008–2009 Great Recession and to more than 10 million in the 2020 recession caused by the SARS-CoV-2 (COVID-19) pandemic.
The question is what is the substitutability vs. complementarity of undocumented workers and native born workers. Consider where undocumented (as opposed to foreign born) workers are:
Source: Torsten Slok/Apollo.
So what’s the data say about complementarities? For immigrants (not just undocumented), Calumi and Peri (2024) note:
In this article we revive, extend and improve the approach used in a series of influential papers written in the 2000s to estimate how changes in the supply of immigrant workers affected natives’ wages in the US. We begin by extending the analysis to include the more recent years 2000-2022. Additionally, we introduce three important improvements. First, we introduce an IV that uses a new skill-based shift-share for immigrants and the demographic evolution for natives, which we show passes validity tests and has reasonably strong power. Second, we provide estimates of the impact of immigration on the employment-population ratio of natives to test for crowding out at the national level. Third, we analyze occupational upgrading of natives in response to immigrants. Using these estimates, we calculate that immigration, thanks to native-immigrant complementarity and college skill content of immigrants, had a positive and significant effect between+ 1.7 to+ 2.6% on wages of less educated native workers, over the period 2000-2019 and no significant wage effect on college educated natives. We also calculate a positive employment rate effect for most native workers. Even simulations for the most recent 2019-2022 period suggest small positive effects on wages of non-college natives and no significant crowding out effects on employment.
What about undocumented? Hotchkiss et al. (2015):
Using administrative, individual level, longitudinal data from the state of Georgia, this article finds that rising shares of undocumented workers results in higher earnings for documented workers, but by a small amount. A one percentage point increase in the share of undocumented workers in a documented worker’s county/industry results in an average wage boost of 0.44%. Within the firm, a one percentage point increase in the percent of undocumented workers employed by the firm boosts wages by 0.09% (0.11, 0.12, and 0.04 in low, medium, and high skill firms, respectively). Potential explanations for a positive wage impact are discussed.
This paper studies the labor market effects of both documented and undocumented immigration in a search model featuring nonrandom hiring. As immigrants accept lower wages, they are preferably chosen by firms and therefore have higher job finding rates than natives, consistent with evidence found in US data. Immigration leads to the creation of additional jobs but also raises competition for natives. The dominant effect depends on the fall in wage costs, which is larger for undocumented immigration than it is for legal immigration. The model predicts a dominating job creation effect for the former, reducing natives’ unemployment rate, but not for the latter.
For some graphs depicting costs when last immigration was restricted, see this here.
It’s no surprise that Brucie was utterly wrong about the effect of illegal immigrants on wages. It is axiomatic: Brucie is wrong about economics.
In this case, as in most, Brucie is also repeating right-wing talking points. He gobbles down whatever faux news feeds him like a little fatherless birdie in a nest.
Right-wing talking points typically get economics wrong. The whole point of right-wing talking points is to overwhelm facts that don’t serve the political agenda of the right.
What was notable in this case is that Brucie’s argument was a non-sequitor. Weis said illegal immigrants fill a necessary role in the economy. Brucie tossed out the Avila link about part-time workers AS IF immigrants caused non-immigrants to be stuck in part-time jobs, but Avila didn’t say that. Brucie just pretended there’s a connection.
It’s pretty clear Brucie thinks he’s smart enough to trick readers. It’s pretty clear he isn’t.
Off topic – U.S. CDS rates:
https://www.investing.com/rates-bonds/united-states-cds-5-years-usd
As of the turn of the year, 5-year CDS rates are the highest they’ve been since 2011. Apparently, there is concern that the felon-in-chief and his pet Congress won’t be able to deal with the debt ceiling before bad things happen.
Typically, default risk isn’t priced into particular maturities of bills until Treasury tells us when default is likely, and I haven’t heard anything yet about default dates. I’m interested to see how Bessent would handle this, in particular whether he’ll be allowed to be transparent with the public about default timing.
OK, one more and then I’ll try to stop. Off topic – climate change and the end of prosperity:
https://actuaries.org.uk/news-and-media-releases/news-articles/2025/jan/16-jan-25-planetary-solvency-finding-our-balance-with-nature/
Among other findings:
The potential for a 50% drop in GDP in the 2070-2090 period.
Closer at hand, “At 3C or more of heating by 2050, there could be more than 4 billion deaths, significant sociopolitical fragmentation worldwide, failure of states (with resulting rapid, enduring, and significant loss of capital), and extinction events.”
This is the work of actuaries, not climate scientists or economists. Actuaries are relying on climate scientists for input. So far, climate scientists have mostly underestimated the pace of climate change.