Is labor a substitute for capital or a complement? Complementary inputs go together like an artist needs a pencil or a mason needs a trowel. A substitute input might be when a robot replaces the fry cook at McDonalds or the Welder at HNI.
Are immigrants a substitute or a complement for US employers?
The economic advisors to Mexican President Calderon believe that workers are complements. "[Calderon] mentioned complaints by U.S. farmers that the crackdown on migrants meant they did not have enough workers to harvest their crops, and said "capital and labor are like right shoe and left shoe."
Labor economist, George Borjas, disagrees. "Ok. I've heard of capital-skill complementarity. In other words, capital and skilled workers are like right shoe and left shoe. Correct me if I'm wrong, but I thought that capital and low-skill labor were more substitutable. In other words, they are more like right shoe and right shoe. In the absence of the low-skill migrant labor, many U.S. farmers would have invested in labor-saving capital equipment."
I believe that there's a dual-labor market. There's labor market for skilled and unskilled labor. As technology advances the demand for skilled labor increases increasing the wages in that market. The opposite happens for the unskilled labor market. The supply of unskilled labor increases and wages decrease. Eventually wages will equate in both countries in the unskilled market.