Samples IB Extended The Impact of the Mariel Boatlift on The Miami Labor Market

The Impact of the Mariel Boatlift on The Miami Labor Market

1646 words 6 page(s)

Abstract
The Mariel Boat Immigration was an illegal and unexpected event in 1980 by Cuban government decision which let their citizen leave the country freely at the Mariel port. United States Department of Commerce stated 125,000 Cuban refugees entered the United Stated as Mariel refugees from April 1980 and June 1981 and around 50% of the refugees settled in Miami. After the Mariel Boatlift, the unemployment rate increased from 5.0% in April 1980 to 7.1% in July in Miami labor market. Most people assumed immigrants had a negative effect on their labor market even the national unemployment rate followed a similar pattern. To find out the impact of the Mariel boatlift on the Miami labor market, this paper used Current Population Survey (CPS) questionnaire data; the characteristic of the economically active population (age 16 – 61) and a log of their wage, the characteristic of immigrants and other Cuban occupation. It was possible to compare the change of characteristic of the labor market because Cubans were separately identified in CPS questionnaire. After the comparison, this paper concludes the change of wages and unemployment rates was not related to the Mariel Boatlift. The low population growth rate in Miami and rapid growth industry for unskilled labor lead Miami to adopt the labor market change.

Report
Immigrants are known to have a negative effect on the labor market because they depress the labor opportunities of the less-skilled natives. Nonetheless, the effects that the immigrants had on the existing wages are minimal. There are two major reasons why immigrants have little effect on the native wages; they have unskilled labor which pays low wages thus econometrics does not pay attention to the effects it may have in the labor market. Additionally, immigrants tend to move to the cities where the demand for labor is relatively high therefore it does not fully offset the existing native labor. Consequently, the aftermath on the Miami labor market due to the Mariel Boatlift was no different.

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The event took place in 1980 from May to September when 125,000 Cuban immigrants arrived in Miami on a flotilla. 50% of these immigrants settled permanently in Miami which led to a 7% increase in Miami’s labor force. Eventually, the number of Cuban workers in the city increased by 20%. Most of the immigrants provided non-skilled labor.
Apart from the Cubans, there were also other immigrants who moved to Miami; they were mostly the Blacks. Thus, Miami’s labor force was filled with people from different backgrounds. The Cubans aged between 16 to 61 years old contributed to about 26.3% Miami’s total population. Out of the 26.3%, about 19.2% participated in the labor market (26.3% × 73% of all Miami’s 16-61-years old who participated in the labor force). The Cubans received higher wage rates compared to the other immigrants (blacks and Hispanics).

The table that summarizes the characteristics of 16-61-Years-Olds in Miami in 1979 (Table 1) uses the Index model. Where is the fraction of workers of group 1 in occupation j, is the fraction of workers of group 2 in occupation j, and is the fraction of all workers in occupation j. This means that a 1% increase in the Cuban labor force would result in an increase of 0.95% in labor supplied to the occupations that primarily were held by the Whites. This led to the replacement of the Whites by the Cubans in a variety of sectors. The overlap of the distribution of the occupations is relatively high.

Among the 125,000 Cuban immigrants were several hundred inmates of mental hospitals and jails. This created controversy about the immigration as criminals were misusing the opportunity to seek freedom in the US. Immigration officials arrested most of these inmates upon their arrival in the US. Over 1,000 of them were held in prison in Atlanta to wait for their deportation back to Cuba. On the other hand, others continued to commit their crimes in the US, and they still await the decisions regarding their immigration status.

The significance of the Mariel Boatlift cannot be ignored. First, the Mariel immigrants increased the labor force in Miami by 7%. The immigrants largely supplied unskilled labor. This labor was required in industries and other occupations. Even though their contribution is not widely recognized, today Miami is developed because of some of the labor contributed by these immigrants, especially infrastructural development-wise. Moreover, the Mariel immigrants did not affect the wage rates of the non-skilled American workers. Additionally, there is no record found that the Cubans increased the rates of unemployment in Miami; rather, the Mariel immigrants were quickly absorbed to the Miami labor force. This had little effect on other races in the city. The Cuban workforce was now in a position to consume products in Miami since they had a source of income. Their consumption played a role in the growth and development of Miami due to increased spending and saving.

A survey carried out on the Mariel immigrants showed that most of them were relatively illiterate, young, and many of them were males compared to the other Cubans who immigrated using other means. Developers and investors could, therefore, take advantage of the large availability of unskilled labor in Miami. Since the Cuban labor force was unskilled, the investors could thus use their services at a relatively fair price which further led to infrastructural development.
The log wages suggest that the Mariel immigrants contributed immensely to the stabilization and improvement of the wages paid to the Miami’s labor force. From 1979 to 1985, the mean log wage in Miami reduced by 0.05 (1.58 – 1.53). Other immigrants who would come to the US after 1985 would find an already existing working relationship between the immigrants and the US. Thus, the long-term effect of the Mariel Boatlift was not to encourage other immigrants to the US but rather to create better living conditions for the immigrants already living in the US.

Evidence of the Cuban workforce being taxed is not available. However, there is a high chance that these people were being taxed by the government since they were earning their incomes within the United States. This led to the increase in the government revenue through taxation. The revenue has since been used by the government in the improvement of various sectors within the nation. Also, an increase in government revenue and spending has played a significant role in improving the country’s GDP.

However, some of these Mariel immigrants may have led to the increase in the crime levels within the city. As stated earlier, some of these immigrants were ex-inmates who continued to exercise their backward behaviors. The government had to spend more searching for and deporting these criminals back to Cuba. Over 1,000 Cuban immigrants were deported.

Inarguably, when it came to the type of jobs the Mariel immigrants were awarded, it is quite evident that they were concentrated in laborer and service occupations. The immigrants were not allowed to hold sales, clerical, and craft jobs which were heavily contributed by their low education backgrounds. This shows that regardless of the level of education or the number of years the immigrants would work as part of Miami’s labor force, the chances of being promoted or awarded better jobs was impossible. A mentality had already been created that the Mariel immigrants could only do handy-jobs. Therefore, most of the immigrants in the 2oth century survived only as casual laborers.

Compared to the other Cuban immigrants, the Mariel immigrants were younger and had lower education levels. This created an unadjusted wage gap of 34% between these two groups of people. A simple regression carried on the hourly earnings in 1984 shows that the Mariel immigrants earned 18% lower wages than other Cubans. Overall, the Mariel immigrants never received the same wages as other Cubans which shows inequality.

Despite the fact that the Mariel immigrants did not cause any change in the wage levels their arrival to Miami caused a strain. The homicide rate in Miami increased by about 50% within a period of one year (1979 – 1980). An example given was the killing of 13 civilians in black neighborhoods in May 1980. One of the major factors that contributed to the unrest within the blacks’ community was the competition the Cuban refugees had added to the Miami’s labor market. Additionally, the pressure in the market was also created by the Mariel influx whereby the unemployment rate in Miami rose by 2.1% within three months (April 1980 – July 1980). During the same period, unemployment rates in the US followed a comparable pattern. This shows that the effect of the Mariel influx was nationwide which proved that the Mariel immigrants were threatening the opportunities available in the labor market for the unskilled laborers. Thus, the Mariel immigrants played a role in the homicides in Miami and the relative increase in the unemployment rate in 1980.

In conclusion, the Mariel immigrants have contributed to the development of Miami and the US at large. First, Miami enjoyed an increase in the availability of unskilled labor. The labor force in the Miami metropolitan area increased by 7%. Moreover, their labor force was filled with young men who were energetic. Developers could thus use them in the construction of infrastructures. Increased labor led to an increase in development which steered Miami towards economic stability. Even though pressure mounted between the blacks and the Cubans after their arrival, the effect was not long-term. There is no evidence provided that shows that homicide increased after 1980 nor was it related to the Cubans. The aftermath was that there was increased cohesion between people of different races because most of them, especially the blacks and the Cubans, provided unskilled labor and they, therefore, had to work together to make ends meet. There is also evident that the Mariel immigrants could have been treated relatively unfairly compared to the other natives and immigrants. However, they did not riot or demonstrate in any way. In fact, the article does not report any complaint from the Mariel immigrants. They were therefore satisfied with their wage levels and were happy with the opportunity they had received that allowed them to live in Miami.

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