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Notes -
Ah, so I realize now that the comment I was replying to was talking about the rising cost of low-end labor more generally; when I had written my reply, I was for some reason just focusing on the change in hotel cleaning strategies.
I do not know fully what the nature of it is. There's probably a JMP somewhere that does a good job. Here are a couple fed papers talking about it.
I did, however, notice that there was an NYT article this morning claiming that the price for crops is apparently low enough that some farmers are considering letting it rot in the field. Not even unharvested; it's talking about possibly dumping them back onto the field. Also last week Brian Potter took a longer view, observing that crop prices have trended significantly down. These things would be a bit strange for a view that is sort of one-dimensional (labor shortage from immigration restrictions/COVID/magic/etc -> higher wages -> higher prices). These things are obviously multifactored. That second fed paper definitely talked about higher wages on the low end being a thing. Perhaps the price of crops would have been even lower if we could have counterfactually, magically tweaked just the one variable of agricultural workers/wages.
The multifactored nature of an incredible interdependent thing like an economy makes it pretty dangerous to overly focus on any one component. That's why I find it useful to scope back out to more broad reasoning to at least level set. Tightening immigration restrictions moves the supply curve to the left, which raises prices and reduces output. How much? It depends. Probably not infinity. It will likely also have effects that spread beyond the narrow markets that employ the most illegals. Is this a good thing or a bad thing? More information is required about the value function in question.
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