Is Automation Reducing Demand for Immigration?

• In Event: Current Issues in Labor & Work: Precarity, Automation, and Inclusion

Abstract

In her seminal work Trading Barriers: Immigration and the Remaking of Globalization, Margaret Peters proposes that broad changes in the last four decades—from trade liberalization to deregulation, along with the development of automation (the introduction of labor-displacing machinery)—have altered firms’ policy preferences on matters of immigration. While firms in industrialized economies may have once been supportive of policies that opened borders to low-skilled labor, more recently firms have opted to support trade and capital liberalization over migration. These changes in firms’ preferences help explain how despite the rise of a globalized world economy there have been growing barriers against transnational human migration. If Peters’ account of firms as significant actors behind liberalization policy is correct, what explains the apparent reversal in migration policies? I focus on changes in technology. Peters assumes advances in technology, namely automation, have a displacing effect on labor. However, building on the logic of Acemoglu and Restrepo (2018) and others I argue that while automation can have a displacing effect in some situations, it can also complement or even increase demand for labor in other instances. Having a more nuanced understanding of automation may help us to clarify how in some situations firms’ demand for immigration may contract but in others it may actually increase. Having a more nuanced understanding of automation can help further elucidate firms’ shifting policy preferences.

Author

• Eric Stein, University of California, Santa Barbara