What Immigration Restrictionists Get Wrong About The Economics Of Reform

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"What Immigration Restrictionists Get Wrong About The Economics Of Reform"

The restrictionist Center for Immigration Studies (CIS) is at it again, with a new paper claiming that immigrants lower the wages of low-skilled native workers. But don’t be fooled: The study is a round-up of old research re-packaged as new, and misses the overall point that immigration reform is a net positive for the economy.

The report, from Harvard Economist and immigration skeptic George Borjas, argues that while immigrant workers add to the U.S. economy, they do so by lowering the wages of native workers, particularly low-wage workers. But this is only one school of thought, and as our colleagues David Madland and Nick Bunker have argued, far more research and researchers (for example Heidi Sheirholz, Gianmarco Ottaviano and Giovanni Peri, Adriana Kugler and Mutlu Yuskel, Giovanni Peri, and David Card,) have actually shown that the opposite is true: Immigrants have a small, but positive affect on the wages of native-workers, and in some cases lead to native workers entering higher-skilled jobs. And even Borjas concludes that the economic benefits to the native born from immigration are “equal to $35 billion a year — or about 0.2 percent of the total GDP in the United States.”

More importantly, Borjas and CIS are attempting a classic misdirection. They are trying to apply an analysis of increases in the labor supply to the current debate, while ignoring the fact that the actual debate on immigration reform is about providing legal status and citizenship for the 11 million undocumented immigrants. These immigrants are already here, and already working alongside their native colleagues in the labor force. Legal status and citizenship will not be a shock to the labor supply, and CIS’s claims of immigration leading to lower wages for native workers simply would not happen. In fact providing legal status and citizenship within 5 years would increase the wages the undocumented, and consequently raise the wages of all Americans by $618 Billion over a decade.

Borjas also does not take into account the fact that the higher wages from immigration reform increases the size of the American economy, creates more demand for goods and services, and leads to more business and job creation, benefits that accrue to all Americans. Providing legal status and citizenship within 5 years would add an estimated $1.1 trillion to the cumulative U.S. GDP over a decade, and an average increase of 159,000 new jobs per year. Immigration reform would also bring in more immigrants in the future, which economist Douglas Holtz-Eakin of the conservative American Action Forum has found would increase per capita GPD, and reduce the federal deficit.

It’s no wonder that conservative groups like Grover Norquist’s Americans for Tax Reform have rejected attempts to downplay the economic effects of immigration reform. Put simply, immigration reform is good for the economy.

Philip E Wolgin is a Senior Policy Analyst on the CAP Immigration Policy team and Patrick Oakford is a Research Assistant on the Economic Policy team.

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