When Cuban Migrants Flooded Miami, What Did It Do To The Local Economy?

Oct 1, 2015
Originally published on October 1, 2015 6:36 am
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RENEE MONTAGNE, HOST:

Immigration usually has a positive effect on a country's economy, though it's rare for massive numbers of immigrants to arrive all at once. That's a problem Europe is facing now with Syrian refugees, and it's something the U.S. faced 35 years ago. Planet Money's Stacey Vanek Smith has the story.

STACEY VANEK SMITH, BYLINE: In 1980, Fidel Castro did something very unexpected. He said people who wanted to leave Cuba could go. Before that, almost no one had been allowed to leave. And over the next few months, thousands of Cubans left in sailboats, fishing boats, little makeshift rafts. Mirta Ojito was one of them. She was 16 at the time.

MIRTA OJITO: I had just sat down to have lunch, egg sandwich with ketchup, which is when the police came to our house, knocked on the door and said there was a boat waiting for you at the port.

SMITH: Ojito and her family crowded onto a little tugboat called the Manana and set sail for the U.S. Ojito fell asleep on the deck of the boat with her mother holding on to her ankle.

OJITO: I woke up in the morning. The sun woke me up. And by then, we could already tell that we were already near the United States because there were lots and lots of boats around. And we docked in Key West around noon.

SMITH: One-hundred-twenty-five thousand Cubans arrived in Florida over the next few months. Most stayed in Miami, which was a perfect opportunity for economist David Card to answer a big economic question. What happens to an economy when there is a large influx of people?

DAVID CARD: The prevailing view was that we would expect at least a short-run effect.

SMITH: So what did you find?

CARD: Well, I didn't find any evidence of that.

SMITH: So 80,000 refugees came to Miami, and there was no effect on the economy?

CARD: You couldn't detect any strong evidence of an effect one way or the other.

SMITH: No effect, not on wages, not on unemployment rates. Card says this is because there is not a fixed number of jobs in an economy. When a bunch of new people come, yes, they get jobs. But they also start buying stuff, getting haircuts, going to the grocery store, which means you need more barbers and more grocers. That creates more jobs.

CARD: So if we have more people, we get more jobs. If we have fewer people, we're going to have fewer jobs.

SMITH: There is some debate about the short-term effect on the wages of low-skilled workers. But overall, economists pretty much agree immigrants don't drive down wages, don't take jobs, even when they arrive by the boatload. Mirta Ojito says getting work was surprisingly easy for her parents.

OJITO: We arrived Monday. By Thursday, my parents were working. And the following Monday, I started summer school.

SMITH: Ojito's father drove a truck, eventually started his own company. Ojito went to college, became a reporter, and eventually went to work for The New York Times, covering immigration. Stacey Vanek Smith, NPR News. Transcript provided by NPR, Copyright NPR.