 Hi, Professor Gerald Friedman, Department of Economics, University of Massachusetts Amherst. We're here to talk about labor supply and immigration. Because American businesses have faced this problem. It comes from two sides. First, businesses make profits. They want to reinvest their profits. That requires hiring more labor. Where are you going to get those workers? After a while, you run out of everybody at home. And you have to start looking for workers further afield. And that is a source of the demand for immigrants. The second is as we've gotten wealthier, as we've become a wealthier, more successful society and economy, people want to take more leisure time. They take it in various ways. They take it by staying in school longer. Instead of starting work at 12 or 14, we start work at 24 or 30, whatever. We retire earlier than we used to. We take more leisure after working. The hours worked or less. In the 1880s, the average workday was about 11 hours. Now, it's about 8 hours. It's gone up a tiny bit in the last 30 years in the United States, which is a noticeable, important change. But that's a change from a long-term trend of diminishing work hours. So, if companies, capitalists are facing this issue of they want more workers and there are even fewer and fewer around, what do they do? And what they do is what they've always done since the founding of the country, they go looking for immigrants. It's not too much to say that the Americans were settled by the Europeans as a place where they could take Africans and put them to work growing sugar. 10 million Africans were brought to the New World. Only half a million of those, one in 20, was taken to what became the United States. But 10 million were taken to the New World, mostly to work growing sugar. Some of them came to the United States. Sugar in Louisiana, rice in South Carolina, tobacco in Virginia, and cotton in South Carolina and later through the whole Southern cotton belt. Immigrants built the United States. They built it as slaves. They built it when the Irish came and built the Erie Canal and the Pennsylvania Railroad and other infrastructure. The Chinese built the transcontinental railroad from California to Omaha. Getting over the Sierra Nevadas in wintertime cost hundreds, maybe thousands of lives, but they were Chinese, so nobody much cared. Italians built New York skyscrapers. You walk around downtown New York, you see all these stone carvings. They came from villages in southern Italy. They brought the skills of stone carvers with them. They also took them to their graves because working without masks, they died of lung diseases at young ages, and those skills had just gone. Jewish immigrants, of course, made the clothing industry and Hollywood. East Europeans, Slavs, Hungarians built the steel industry in Pennsylvania and Chicago. Internal migrants from the Black South and from Appalachia built the cause, creating Motown. That was the way we did it until after World War I, when we had a brief period when we were so worried as a country, worried about all those communists and worried about the Catholics and the Jews and the East Europeans that we restricted immigration. Here's the pattern of immigration. It's a share of immigrants coming to the United States. The black line are those, the percentage, coming from Great Britain, Ireland and Germany and other northern European places. Most of our immigrants through the 1870s came from these places. Then we got this green line of the immigrants coming from southern and eastern Europe, Greece, Russia, Italy, Poland. Shut up until the 1920s when that line was brought down by immigration restrictions because people in the South and the Midwest were scared of all these Jews and Papas and Greek Orthodox, pure racism. Then we had something funny happen. After World War II, Hitler kind of did us a favor as a people by discrediting racism. After Hitler, it was pretty bad to go around saying that Jews, blacks, Italians are bad because of who they are. No, so we changed and we started relaxing. We started letting in more refugees and then in 1965, we abolished the national origin system. So we let all immigrants come in on an equal basis, which meant suddenly people could come here from India. They could come here from China. We had banned immigration from China and Japan, they could come here from eastern Europe. And immigration started up. What's more remarkable is suddenly, there was just China and eastern Europe where we started getting immigrants from Mexico in a big way. They'd always been coming over the board and of course we moved to the border south by conquering a big part of Mexico in 1845. We call it California and we brought in a lot of Mexicans with us with that. But the numbers jumped and from the 1980s on immigrants began to comprise not only a growing share of the population again moving back to the levels of before the 1921 Immigration Act but also immigrants began to comprise a growing share of the growth in the labor force. 80% of the labor force growth over the last 20 years has been because of immigration. Without immigration, our labor force would be almost stagnant. Now, this leads to all sorts of issues. One of them is the widespread opinion that oh, the immigrants, they just take the unskilled jobs and nobody else wants, they're low wage, they bring down the economy because they don't earn enough. That is not true even of the Mexicans and southern Americans, the Latin Americans. They do generally come with less education than people born in the United States and they take low wage jobs. They do the things that Americans born here wash dishes, mow lawns, etc. But that's not true of immigrants coming from other places. Those coming from the rest of the world are more educated, that is non-Latin American, they are more educated than people born in the United States. Go to a hospital emergency room in a major urban area and you will get nurses from Jamaica and the Philippines and doctors from India, Pakistan and the Arab world. They are taking the difficult jobs that Americans don't want. Now, does immigration lower wages? You'll get a lot of people of a particular political persuasion, which I won't mention, are saying oh, immigrants are the horrible, the lowering wages and they've got a simple model for that. And here it is. Wages, labor force, demand for labor, immigrants shift out the labor supply curve. Wages go down. We could argue well, still good for the economy, there's all the stuff being produced, that wasn't being produced otherwise, but wages go down. That, however, is only half the story. It's a part of the story that leads out, people like Larry Page, Sergei Brin from Google, Ariana Huffington of The Huffington Post, now at AOL, Vinod Koshla, one of the founders of Sun Microsystems, Shay Agassi, Electric Cars, Andy Grove at Intel. These are all immigrants. Steven Chen, YouTube's founder. Where would we be without these people? Where would we be without YouTube? We're watching this on YouTube. These people are immigrants who create jobs and shift out the demand for labor with immigrants. So is immigration good or bad for labor? Immigration of skilled, talented, energetic people, including those who are educated, including many who aren't educated, but who come here to establish broadening businesses in California and construction businesses in Houston. These are people who are building America, creating jobs for all these lazy, native-born Americans, none of whom are watching this, of course. But next time you hear somebody complaining about immigration, ask them, where do you think we'd be without immigrants? I think the answer would be, the proper answer should be, our grass would be long, our dishes would be dirty, and we wouldn't have the internet. Thank you, and have a nice day.