Dear GMATClub - please grade my 7th AWA attempt

The following appeared in the editorial section of a local newspaper:

“The inflow of immigrant workers into our community has put a downward pressure on wages. In fact, the average compensation of unskilled labor in our city has declined by nearly 10% over the past 5 years. Therefore, to protect our local economy, it is essential to impose a moratorium on further immigration.”

Discuss how well reasoned . . . etc.

An article in the editorial section of a newspaper calls for a moratorium on immigration to protect the economy, citing specifically the impact of immigration on the labour market. The argument is flawed because it relies on a single aspect of a local economy to make a wider point about the economy as a whole, it uses ambiguous data and the author fails to establish a causal link between immigration and lower wages.

First, the author suggests that ‘downward pressure’ on local wages has been driven by immigration. Immigration is assumed to take place at the national level, yet the author is citing a local phenomenon (lower wages) as an outcome. The two are not necessarily linked. For example, it is possible that immigration levels have declined or remained steady during the period under consideration. It is also possible that lower local wages are a result of a rise in local unemployment.

Second, the article refers to a 10% decline in unskilled compensation over 5 years as justifiction for an anti-immigration stance. Compensation is not necessarily equated with wages. For example, compensation could include other fringe benefits, not merely cash. To focus on one aspect of overall employee compensation could be unrepresentative. Moreover, a 10% decline in wages may or may not constitute a significant real drop in wages once inflation or deflation is taken into account. As the cited change is over a five year period, the reported wage drop may not be significant. In fairness, it is possible that compensation for skilled or highly skilled workers increased during the period under consideration; to highlight a drop in unskilled wages as indicative of the overall labour market picture could be misleading.

Third, the article does not establish a casual link between immigration and lower wages. It is conceivable that higher immigration levels could drive down wages but no statistical information is offered to support this conclusion. Occurrence of greater immigration and lower wages could be a coincidence. It is possible that some immigrants attracted to the local area under discussion bring with them sought after skills currently in short supply in the local labour market, in which case immigrants may be securing higher paid jobs and as a result not directly impacting the unskilled labour market.

Overall, the argument is flawed for the reasons set out above. The argument could be strengthened by the inclusion of nationwide data on immigration and the labour market. Alternatively, the author could seek to incorporate local immigration data, if available. The author’s reliance on a decline in unskilled wages could be bolstered by the inclusion of wage data for other categories of workers, such as skilled workers. Finally, this article appeared in the editorial section of a newspaper; it is conceivable that the paper or indeed the article’s author are associated with political bias, especially on a contentious issues such as immigration. Disclosure around bias or vested interests could lend credibility to the article.