George J. Borjas discussed his new study on Covid-19 in New York neighborhoods, the automation trend, future immigration policy, and more with Charles F. McElwee, assistant editor of City Journal. Borjas is the Robert W. Scrivner Professor of Economics and Social Policy at the Harvard Kennedy School. He was awarded the IZA Prize in Labor Economics in 2011. Borjas is a research associate at the National Bureau of Economic Research and a research fellow at IZA. He is the author of several books, including We Wanted Workers: Unraveling the Immigration Narrative and the widely used textbook Labor Economics, now in its eighth edition. In 2016, Politico listed him among the 50 “thinkers, doers and visionaries transforming American politics . . . For telling it like it really is on immigration.”
Your new study on Covid-19 found that people in New York City’s minority neighborhoods have been more likely to test positive for the virus. What might explain this finding?
As with much else in the pandemic, the data are hard to interpret. We still don’t even know if Covid-19 is much more deadly than the seasonal flu. The “denominator” that we need to answer that question—the total number of actual Covid-19 infections—isn’t available.
It’s just as hard to ascertain why minorities in New York are more likely to test positive. Testing in the crucial month of March wasn’t random across neighborhoods. Amazing as it may seem to us now, the first positive test in the city wasn’t confirmed until February 23. The testing that followed was more widespread in some places than in others: people living in wealthier neighborhoods, for instance, were far more likely to be tested.
Non-random testing contaminates the interpretation of the data. Is the observed correlation between testing outcomes and race a result of the fact that only a select number of people were tested, or does it reflect a real linkage? We need more widespread testing before we can solve the puzzle.
What are some possible causes of this rate of infection in New York neighborhoods?
Had testing been random, it would be easy to see why the frequency of positive tests might differ across neighborhoods. Population density will obviously play a role in determining the rate of infection. Living in a neighborhood where larger (and more multigenerational) households cluster in small spaces makes it more likely for the virus to be transmitted to many more people. Minority neighborhoods, particularly black and Hispanic neighborhoods, may be particularly representative of such living conditions.
But it’s worth reemphasizing that the available data are incomplete and that any correlations we see at this point may be driven by the non-randomness of testing.
Could the crisis accelerate the automation trend?
China effectively became the manufacturing powerhouse of the world in the past two decades. The pandemic suggests that it may have been unwise to move so much of our manufacturing infrastructure to a country with a political leadership that doesn’t share Western democratic values. The gains from international trade depend on much more than adding up the savings from buying a cheaper iPhone or bottle of aspirin.
Japan has proposed to bear the cost that its firms would incur if they repatriated their manufacturing plants from China. To the extent that labor costs are far higher in the U.S. than in China, it may seem sensible for repatriated American firms to rely on automation to keep labor costs low. In that sense, the crisis could accelerate the rate of automation in these industries.
How could the crisis affect future immigration policy?
It reminds us that borders matter. Even leaders in the E.U. who buy into open borders now realize that their main responsibilities are to their own citizens. Border barriers quickly went up to limit virus transmission.
The main lesson for the U.S. may be to remind us that immigration policy should be designed to benefit the American people. We’ve had health checks on legal immigration for decades, for example, but no such checks on illegal immigration. The Covid-19 pandemic helps dramatize the potential burden imposed by unregulated immigration.
But I don’t want to leave the impression that our immigration policy will change in important ways. We have short memories, and some industries have a huge financial stake in the continued entry of large numbers of immigrants. Just think of the long-term impact of 9/11. Our policy didn’t really change—despite the obvious link between immigration and national security, the huge economic cost, and the tens of thousands of lives lost in the terrorist attack and in the subsequent wars.
What is an overlooked sector that could be transformed by this crisis?
The pandemic and the restrictions on how we interact have sparked a revolution: we’re now continually trying out new ways to conduct social exchanges. Schools have gone online—and this type of learning may or may not be effective in specific grades or subjects. Many of us have now been in at least one Zoom business or family get-together and know firsthand the pros and cons of long-distance networking. Many of us are now getting a large portion of our goods delivered to our homes, giving us a better grasp of the potential, and the limits, of remote shopping. The pandemic will spur the creation of new companies that take advantage of the lessons we’re learning and transform many industries.