Immigration policy threatening U.S. economy, says study
Tuesday, May 4, 2004 10:20:46 PM
afxpress.com
WASHINGTON (AFX) -- Taking a harder line than most elected politicians, Harvard economist George J. Borjas said Tuesday that immigration significantly reduces the wages of "native-born" workers and that the U.S. should deal with "people already here" before offering amnesty to illegal immigrants
"Let's actually control the border, prevent the illegal immigration population from increasing, and then we can say let's worry about what to do with the people already here," Borjas said
Both Republicans and Democrats have introduced legislation calling for the legalization of some illegal immigrants and the continuing issuance of temporary work visas. The parties, however, differ on how such policies should be implemented
Borjas, regarded by some as the nation's leading immigration economist, released a study suggesting that the increase in immigration from 1980 to 2000 has reduced the average American income by four percent, or $1,700
Sponsored by the Center for Immigration Studies, the study also suggested that the impact of immigration on Americans without a high school education, especially on minorities, was even more severe, dropping their wages on average by 7.4 percent. It reported, too, that earnings decrease regardless of whether the immigrants are legal or illegal
"It is low-skilled workers who lose the most," Borjas said
Redistribution of wealth Borjas, however, said that his study shows that low-skilled workers aren't the only ones at risk. Programs that bring in skilled workers from developing countries on temporary visas, he said, also threaten college-educated workers like engineers and software developers. Borjas is the author of "Heaven's Door: Immigration Policy and the American Economy," a look at the impact of the wave of immigration in the late 1990's and its impact on the U.S. economy. Commenting on Borjas's study, Steven Camarota, director of research for CIS, argued that temporary visas, like the H-1B, are also bad for developing countries that are losing skilled workers to the United States
"Half of Ethiopia's doctors now live in America," Camarota said. "And that's a society desperately in need of doctors." But increased immigration, Borjas said, is good for two groups -- employers and consumers. Employers can hire workers at lower pay and, consequently, consumers can buy goods and services at lower prices. In that sense, he said, immigration has a net positive effect on the U.S. economy, increasing GDP by about 0.1 percent
"[Immigration] redistributes wealth from workers to employers, it's as simple as that," Borjas said. "The questions that remains is whether that kind of transformation is desirable or not." Critics point to other factors Critics of Borjas's study argued that it was too simplistic and based on a basic supply-and-demand model that doesn't account for other factors like the minimum wage and fluctuations in demand for low-skilled workers
"The notion is certainly common sensical," said Jared Bernstein, an economist at the Economic Policy Institute, of the Borjas study. But he argued that demand trends are just as important as supply ones and that Borjas had given them short shrift. From 1995 to 2000, Bernstein argued, demand for new workers trumped any adverse immigration effect. What's more, he said, welfare reform increased the number of low-wage workers in the same period, but the economy largely absorbed them as well. The end result, Bernstein said, is that by ignoring demand the Borjas study makes the relationship between wages and immigration look far bleaker than it actually is
"Most of the literature finds smaller effects than George's," Bernstein said
Robert Lerman, a senior fellow at the Urban Institute, concurred, calling Borjas' study "kind of a static analysis." Indeed, even the AFL-CIO, which has traditionally opposed immigration, today takes a more nuanced view of it than the one suggested in Borjas's study
"We know that our workplace rights, our economic security, our future are linked to [that] of immigrant workers," said AFL-CIO President John Sweeney at a political rally Tuesday. While the union remains concerned about temporary visas, Sweeney said, it realizes that if immigrant workers are allowed to be exploited, the rights of native workers will soon be under fire too
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