Vice President JD Vance is hitting the speaking circuit to sell his new book and defend the disastrous US military intervention in Iran at the same time. The latter is certainly more difficult and important for Americans and Vance’s political career, but the former is a personal story of his rediscovery of faith and conversion to Catholicism. At least, that’s what his many interviews tell me. I haven’t read Communion yet, and I doubt I’ll find the time to read the second memoir written by a man younger than I am, at least until he is nominated. Vance does briefly mention my research on how immigration undermines labor unions on page 209:
But these economic questions bleed easily into the migration issue: Too much immigration actually destroys the social cohesion necessary to form labor unions. Alex Nowrasteh, an analyst at the Cato Institute, a free market think tank, has argued that the decline of American labor unions is traceable directly to the relaxation of immigration restrictions in the 1960s. Nowrasteh thinks this is a good thing because he doesn’t like the idea of giving workers bargaining power over massive corporations.
Vance gets the facts right and muddies my values. Vance is responding to several pieces I’ve written over the years, so I’ll start with the oldest when explaining what we found. Wretched Refuse? by Benjamin Powell and me is a book-length response to the argument that liberalized immigration could reduce the quality of economic institutions in destination countries, slow economic growth in places like the United States, and thereby kill the goose that laid the higher-income eggs that attracted immigrants in the first place. It’s the best potential argument against liberalized immigration. Our book’s chapter on the United States shows that several proxy measurements for the size and intrusiveness of the federal government in economic affairs are negatively correlated with immigrant stocks.
In plain language, there’s less growth in the size and scope of government where there are more immigrants. How could that be the case? Labor unions are my favorite theory. Powell and I hypothesize that Friedrich Engels knew (I’ve never written “Friedrich Engels knew” before) that immigration divided American workers into different nationalities and ethnic groups who would never cooperate to start a socialist labor movement, a necessary precondition for a communist revolution. Engels complained in 1892 that immigrant workers were so “divided into different nationalities” that the bourgeoisie could “play off one nationality against the other.”
That’s why labor union organizers like Samuel Gompers, the restrictionist leaders of the American Federation of Labor, and Cesar Chavez were right to treat immigration as a threat to organizing unions. Employers grasped it too, and factory owners deliberately hired across national and ethnic lines to raise the cost of forming a union. Powell and I didn’t make up this theory on our own; we relied on work by Seymour Lipset and Gary Marks, who sought to explain why there was never a successful socialist labor party in the United States and cited immigration-induced diversity as one explanation.
Weak unions meant small constituencies for redistribution, and heterogeneous voters proved less willing to fund welfare for neighbors different from themselves. The era of closed borders bears the pattern out as federal expenditures climbed from 4.5 percent of GDP in 1922 to 18.3 percent by 1967. The very decades when DC built the New Deal, the Great Society, and the Civil Rights Act-era regulation over private hiring and firing were when the border was closed.
The welfare and administrative states grew when immigration stopped, the opposite of the argument you used to hear from conservative immigration restrictionists, who also used to like free markets. It’s no coincidence that labor unions grew during this period.
Labor unions manufacture progressive voters while undermining firm profitability. Workers who join a union become more progressive, more skeptical of markets, and more hostile to trade, and most of that shift reflects a treatment effect of membership rather than self-selection. Unions then convert those opinions into policy through lobbying and voter drives. For those of us who value economic freedom, an organization that turns its members leftward and spends to enlarge government is a problem, and whatever weakens it without coercion is a gain. Immigrant diversity weakens it without coercion. Diversity helps preserve a relatively free American market.
The connection between labor unions and immigration is tight, although not in the way JD Vance understands. Union membership has roughly halved over the past four decades, from more than one in five workers to about one in ten. In a 2022 working paper, Town Oh, Artem Samiahulin, and I found that immigration reduced union density by 5.7 percentage points between 1980 and 2020. In other words, immigration can account for nearly 30 percent of the entire decline in unionization in the United States. The mechanism is drawn from a social-customs model of unionization based on social solidarity, whereby immigrants have a lower taste for unions and raise the workforce’s ethnic, linguistic, and religious diversity, which raises the transaction costs of collective action. We used Borjas’s (2003) skill-cell method to estimate the effect and found that a one-point increase in a cell’s immigrant share lowers union density by 0.479 points (cells are defined by worker experience and education).
The negative effect of immigration on unionization is largest among low-skill men in the private sector and absent in the public sector, where law, not shop-floor solidarity, sets union density. Our finding survives robustness checks. Labor-supply dilution does not explain it, and a fractionalization index carries its own negative coefficient. The relationship is correlational, and the skill-cell design narrows the causal gap rather than closing it.
Vance read our numbers carefully and reported the size of the effect fairly. Our research found that immigrants preserved free markets in the United States by undermining labor unions. That’s quite a bit different from how Vance described our normative take on our research as good for “giving workers bargaining power over massive corporations.” It’s true that labor unions cut into firms’ profits, but our research focuses on how they undermine progressive anti-capitalist policies. None of this is hostile to workers who prosper in an open, free market economy, not in one where a shrinking cartel of insider unionistas lobbies the state that taxes them.
It is odd for a Republican to defend labor unions, but Vance is the most prominent member of the postliberal anti-capitalist camarilla in modern American politics. To be sure, most Republicans don’t agree with Vance about labor unions, but there are undoubtedly more today like Vance who take a fundamentally progressive view on those destructive organizations than there used to be.
Vance is right that immigration gutted private sector American labor unions. He just has the moral of the story backward. Weaker unions meant a freer market, and that is the part worth thanking immigrants for. My thanks to the vice president of the United States for pointing more readers to Cato’s research.