Restricting Immigration Does Not Lead To More Jobs For Americans
The fundamental premise at the heart of the immigration bill that President Trump backed earlier this month has no merit whatsoever.
Earlier this month, President Trump came out in support of a bill sponsored by two Republican Senators that would significantly cut back on legal immigration to the United States, including both immigration by low-skilled workers and by potential immigration considered highly-skilled. At the time he announced his support for the measure, Trump claimed that restricting this type of immigration would result in more jobs available for American citizens. Not surprisingly, there’s no economic evidence to believe this is true, and considerable evidence that restricting immigration could actually end up hurting the economy and the job prospects of Americans at all levels of the economy:
WASHINGTON — When the federal government banned the use of farmworkers from Mexico in 1964, California’s tomato growers did not enlist Americans to harvest the fragile crop. They replaced the lost workers with tomato-picking machines.
The Trump administration on Wednesday embraced a proposal to sharply reduce legal immigration, which it said would preserve jobs and lead to higher wages — the same argument advanced by the Kennedy and Johnson administrations half a century ago.
But economists say the tomato story and a host of related evidence show that there is no clear connection between less immigration and more jobs for Americans. Rather, the prevailing view among economists is that immigration increases economic growth, improving the lives of the immigrants and the lives of the people who are already here.
“The average American worker is more likely to lose than to gain from immigration restrictions,” said Giovanni Peri, an economist at the University of California, Davis.
The Trump administration is proposing sharp reductions in the number of skilled and unskilled workers who are allowed to become permanent residents, halving annual immigration from the current level of roughly one million people a year.
“This legislation demonstrates our compassion for struggling American families who deserve an immigration system that puts their needs first,” President Trump said.
(…)
Economists say that skilled immigrant workers are clearly good for the American economy. The United States could import computers; if it instead imports computer engineers, the money they earn is taxed and spent in the United States. Moreover, some of those engineers invent new products — or even entirely new technologies.
The administration says it still wants high-skilled workers, and it has described the cuts as targeted at low-skilled immigrants. It would still issue roughly 140,000 merit-based green cards each year, while sharply reducing the number of people admitted as family members of current residents.
But about one-third of those family members who received green cards since 2000 had college degrees, Mr. Peri said. “People have an outdated image” of legal immigration, he said. “It’s mostly Asian, Indian, Chinese people who are coming to do mid- and high-level professional jobs.”
George J. Borjas, the Harvard immigration economist whose work is the only evidence that the administration has cited as justifying its proposals, said in an interview on Wednesday that there was no economic justification for reducing skilled immigration.
“That is a political decision,” he said. “That is not an economic decision.”
With regard to unskilled and low-skilled immigration, the debate among economists is a bit more pointed, but the consensus view is that low and unskilled immigration does not unduly restrict the ability of Americans in a similar position to obtain employment:
Mr. Borjas also argues that low-skilled immigration does not produce clear benefits for the economy as a whole. He said that the benefit of low-cost labor was offset, or even slightly outweighed, by the cost of providing government services to immigrants.
The primary beneficiary of immigration is the immigrant, Mr. Borjas said.
“If all you care about is economics, then it’s really clear,” he said. “But do you want to live in a country that only cares about money, or do you want to live in a country that has a legacy of being generous to immigrants? Maybe you want a compromise.”
Other economists, however, have sharply disputed Mr. Borjas’s research. Most studies put the negative impact on low-skilled wages closer to zero, Mr. Peri said.
One key reason is that immigrants often work in jobs that exist only because of the availability of cheap labor. Picking tomatoes is a good example. California farmers in the 1950s and early ’60s relied on Mexican workers even though machines were already available. In 1964, 97 percent of California tomatoes were picked by hand.
The United States let farmers hire Mexican workers on seasonal permits, a program that began as a response to labor shortages during World War II. By the early 1960s, the program was politically untenable. “It is adversely affecting the wages, working conditions, and employment opportunities of our own agricultural workers,” President John F. Kennedy declared in 1962. President Lyndon B. Johnson ended the program in 1964.
By 1966, 90 percent of California tomatoes were being picked by machines.
“The story that ‘when labor supplies go down, wages go up’ is a cartoon,” said Michael A. Clemens, an economist at the Center for Global Development who has studied the end of the Mexican guest-worker program, which was known as the Bracero program.
Similarly, in the present day, some American dairy farmers warn that the nation needs to continue importing farm workers or it will end up importing milk.
Low-skilled immigration can also provide a boost to the rest of the economy.
A 2011 study found that high-skilled women were more likely to work in cities with high levels of immigrants, because families could pay for child care or elder care.
The National Academy of Sciences made an ambitious effort to assess the bottom line in 2016. It concluded that the average immigrant cost state and local governments about $1,600 a year from 2011 to 2013 — but the children and grandchildren of immigrants paid far more in taxes than they consumed in public services.
More broadly, the report concluded that immigration benefited the economy.
When he endorsed the measure introduced by Senators Tom Cotton of Arkansas and David Perdue of George, President Trump made the claim that our current immigration system, which provides preferences to immigration based on family connection to citizens and people who are already here legally results in wages for low-skilled American workers being pushed down due to increased competition. This is, of course, another variation on the old and rather easily disproven idea immigrants take jobs away from American citizens. This argument is deeply flawed for a number of reasons. First of all, as a matter of principle, it’s simply false to claim that anyone is entitled to a job or that American citizens should be more entitled to a job than an immigrant who is willing to do the job for a lower wage. Second, as the links in the quoted text above and other studies have shown, low-skilled immigrants in particular end up in the kind of labor intensive low-wage jobs that most Americans would decline to do regardless of how much they were being paid. This includes positions such as landscape laborers, dishwashers and other workers in restaurants, and positions in construction that require only a minimal level of skill. For example, when states such as Georgia and Alabama passed laws intended to crack down on “illegal immigration” earlier in this decade, farmers quickly found it far more difficult to find people to pick the vegetables and other crops in their fields no matter how much they offered for the job. The result was that crops ended up rotting unpicked in the field and local economies were adversely impacted as a result.
Rather than depressing the labor market, both economic studies and our own history demonstrate that increased immigration actually ends up benefiting the economy as a whole, including job growth that benefits American citizens. The reasons for this are, of course, easy to understand. In addition to working in positions that ordinary Americans loathe to take at any price, both legal and illegal immigrants also contribute to the economy by their sheer interaction with it. Just like anyone else in the country, these people spend the money they earn on goods and services for themselves and the families that stimulates economic growth as a whole, which in turns helps to create the kind of economic activity that helps increase employment across the board. This has been the case throughout American history, and those occasions when we have restricted immigration have shown that the economy as a whole ends up suffering. By restricting immigration, therefore, Trump, Cotton, and Perdue would quite likely end up harming the average American far more than they would be helped by the fact that there was supposedly less competition in the labor market.
“…these people spend the money they earn on goods and services for themselves and the families that stimulates economic growth as a whole, which in turns helps to create the kind of economic activity that helps increase employment across the board.”
Hardly. Statistics suggest that remittances to Mexico from legal and illegal Mexicans working in the United States are about $39 billion annually. Mexico’s oil economy generates about $24 billion annually. Apparently exports of cheap labor by poor people is Mexico’s biggest money maker.
When do we hold Mexican and Central American governments accountable for their own actions? They are failed nation states and I sometimes think that UN intervention in these nations is the only answer..
What people fail to grasp is that we use Mexicans and other immigrants as an untouchable class (in the Indian sense). We give them the untouchables work – cleaning, caring for children, stoop labor, food processing work. And in doing that we define those jobs as untouchable jobs. As jobs unfit for anyone but an immigrant. As a result there are approximately zero native-born Americans willing to do those jobs at any rate of pay.
The unspoken predicate is the belief, especially among lower class whites, that these untouchable jobs are properly done by African-Americans who they assume are lying around collecting welfare checks. (Thanks, Ronnie.) They’ve grown up on the notion of blacks as an inferior race, a race meant to be hewers of wood and drawers of water. They like their untermenschen clearly-defined by skin color. Of course African-Americans understand that these are untouchable jobs and have no more interest in them than white people do.
No one but no one wants to be picking strawberries in the blazing Bakersfield sun or cutting up chickens in some grim factory in Delmarva. Literally the only people willing to do that work are immigrants. So no immigrants = no strawberries and no chicken. Or more accurately no American strawberries or American chicken. We’ll replace those immigrants with imports. Where possible we’ll replace them with machines.
I’m not a snob about work – I’ve cleaned homes and offices for a living. But I may have been the last white man in the toilet cleaning business, and that was 30+ years ago. I’ve done low-status work and physical labor, and even I wouldn’t spend 8 hours in a field picking strawberries for $1000 an hour. Even back in my poverty years I wouldn’t have done it for any practicable wage, because it is awful work. I toured the Foster Farms chicken processing plant and if you want me cutting up your chicken the price of McNuggets is going to be in the hundreds of dollars.
It is a racist, nativist myth to see these people as leeches, quite the contrary, the only reason we still have an agricultural sector is immigrant labor. We’ve grown rich and fat (literally) on the backs of badly-treated immigrant labor. Say hello to immigrant workers or say goodbye to US agriculture and food processing and probably other businesses as well.
I suppose every country needs its untouchables. Immigrants are carrying that ball because no one else wants it.
@John430:
Why are remittances a problem for you?
So, Mexicans work hard, live thriftily, and send money home. Exactly what the Swedes, Italians, Irish, Jews and every other immigrant group does. Why is that a problem?
Robots. And expert systems.
And in less than a generation they’ll be doing 90% of white collar jobs too.
Immigrants have nothing to do with unemployment.
@george:
And once we have machines making us the most prosperous humans this planet has ever seen, we’ll still probably have billionaires claiming they deserve more than everyone else.
@John430:
Even more surprisingly, none of those Mexicans actually eat anything, or pay rent, or wear clothes, or drink beer, or put gasoline in their cars, or do anything else that spends money in the local economy. It’s downright remarkable.
At the highly-skilled level, there is definitely a downwards pressure on wages and working conditions because of immigration.
It is nearly impossible to push for better working conditions or pay (unpaid off-hours support, for instance, is frequently abused by employers, along with hours, unrealistic deadlines designed to push people to 60 hours weeks, etc) when your foreign born coworkers cannot say anything for fear of being labeled a trouble maker, getting pushed out of the company, and then losing their visa to stay and work. And that’s at the “good” companies.
People on the various work visas also don’t make as much, despite claims that they are paid “prevailing wages”
That said, the benefits to America at large outweigh the costs to American born software engineers, and so I am grudgingly in favor. But, just because I have a pretty sweet gig doesn’t mean I’m not aware that it could be sweeter. (I mostly just say no to a lot of the demands for extra work, and will doubtless have to find another job before too long)
@Gustopher:
Get a security clearance. There is a large and growing labor shortage for software engineers and project managers cleared to work on national security systems. Salary premiums are substantial — and much of that is driven by the fact that you have to be a US citizen.
@michael reynolds:
I though McNuggets were extruded, not cut up.
@DrDaveT: But then I am working on national security systems. And there are the drug tests, and the inability to say what you’ve been working on…
I’m an overly chatty, left-wing pot head. I shouldn’t be doing national security.
@Gustopher:
Personally, I think we could use a few more pot-heads in National Security, but for the moment the two do not go together. (I expect that to change within a decade or two, though.)
The “overly chatty” part is more of a problem. Though I will say that there are a lot of jobs that require clearances in which the vast majority of the work is unclassified.
At any rate, you may have more leverage than you think, if you’re good at what you do. Software engineers don’t get a lot of big promotions, in general — their pay goes up in jumps when they move to a new job. People who stay with one company are generally making less than their market values, and if your HR and management people are smart they already know that. If they need more hours, they can hire someone more junior than you to provide them. What they can’t do is replace the hours you do give them at the same rate for the same quality.
I’ve said this before. Around here there are a lot of valedictorians named Nguygen. The National Spelling Bee winners since 2008 have names like the Indian cricket team. The restrictions on immigration are clearly based on fears of competition with the world. Economic concerns are not credible. If you let Iraqis in, you will let in some Steve Jobs relatives.
Returning (as Tom Lehrer said) to the mainstream of this evening’s symposium…
This is all true, and the plutocrat wing of the GOP actually knows it. However, for the base it’s really about not wanting job growth that benefits American citizens if too many of those citizens are going to be brown, or (worse yet) not even Christian. The Party adapts its policies to that reality.
Riddle for me please the economic consequences of removing some 12 million consumers (and taxpayers) from the economy.
This is not rocket science …
This is a terrific article on the economics of the immigrant debate. Sadly, as you and I both know, the immigrant debate has ZERO to do with economics.
@HarvardLaw92: And you’re surprised that fiscal conservatives are short sighted and concentrate on the immediate to the detriment of their future for what reason?
@Gustopher: “At the highly-skilled level, there is definitely a downwards pressure on wages and working conditions because of immigration.”
And every single move by your side is to lower wages and degrade working conditions for 90% of the labor force.
@DrDaveT:
One has to wonder how long the government can subsidize this situation. Rent seekers nearly always eventually lose their monopolies. We need sustainable and scalable industries – not just exceptions for those smart enough to slide in.
@HarvardLaw92: Moreover, many illegals pay into the Social Security system and won’t take any out. Net benefit there.
@JohnMcC: If the crops were being picked by illegal swedish immigrants they’d have been given citizenship a long time ago.
@John430:
Hmmm… Considering the Mussolini wannabe buffoon who resides in the White House and the GOP sycophants and man babies in Congress, that prescription could easily apply to the US too.
“…these people spend the money they earn on goods and services for themselves and the families that stimulates economic growth as a whole, which in turns helps to create the kind of economic activity that helps increase employment across the board.”
… to which … responded
@John430:
The $39B that these people send back to Mexico is money that they have earned through their hard work, and have every right to remit to family member in Mexico as the wish.
You do realize that these people do pay taxes: they rent housing and so, de-facto are paying their landlord’s property taxes; they purchase food and clothing therefore are paying sales and use taxes; they drive cars purchase gasoline and are paying gas taxes, they work most will never realize.
@OzarkHillbilly: What a dildo you are! Mexico, has a long history of oligarchy, corruption and ineffectiveness. That’s why they are exporting their poor. OTOH, the US appears to be exporting manufacturing and technology jobs. Soon, all we’ll have left are unskilled immigrants filling jobs that don’t require skills.
@Gustopher:
You are describing the broader economy, however–and not just ones which have immigrant labor linked to them.
@John430:
Great zinger! It really makes me take your position seriously.
Indeed, like calling an anonymous stranger a “dildo” on the Internet…
@John430:
Yes, they do. Fortunately, many Mexicans are able to escape that to a better life in the US, where they are much more productive and useful than, say, you.
Many are not in favor of high levels of immigration – because the increase in population level decreases their quality of life ($ for rent, housing, tuition; crime, welfare). For them, it’s not about immigrants, but immigration – the numbers (see NumbersUSA.org).
That is why the RAISE Act makes sense.
Those who benefit from increased population (the 1%) will, of course, use their influence [$] with congress (remember what Charles “I certainly hope so” Keating said – look up Keating five) and their control of the media to prevent the RAISE Act from becoming law. See http://www.washingtonexaminer.com/six-bogus-arguments-against-trumps-immigration-reform-bill/article/2631734
The 1% will be supported by the compassionate [aka useful non-thinkers] who are easily led. Those same compassionates will continue to complain about the high cost of rent, price of houses, college tuition, etc., without understanding cause and effect.
Compassion is in no way a sound basis for policy.
https://www.nationalaffairs.com/public_interest/detail/moist-eyesfrom-rousseau-to-clinton
@DrDaveT: Too bad you have difficulty understanding the main theme…I was drawing an offset to the proposition that illegals contribute more than their share. The offset is the $39B thats’ B as in Billions, they send offshore. Kind of balances out in terms of contributions. Had you less of a closed mind, you would have picked up on that.
@John430:
Oh, I understood your claim perfectly. You were simply wrong, that’s all.
Right. Money that they do not need for everyday living, obviously, or else they couldn’t send it offshore. Money not used for immediate consumption. Economists call that “savings”, and it does not matter what you do with it, because it isn’t being used for consumption. Stick it in a mattress; put it in the bank; send it to Mexico. All equivalent.
You are complaining that Mexican immigrants are bad for the economy because they are not profligate like real Americans — they actually save. Utterly pathetic.
@DrDaveT: In fairness, if those dollars were saved in a bank in the US they would have a positive economic force. And the odds are that they would spend a great deal of those dollars if they weren’t sending them home.
Still, the main problem with John430’s position is that he is ignoring the economic benefits to the US economy by the creation of those dollars in the first place. Further, he is ignoring that those remittances help the Mexican economy (to name the most significant recipient), which in turn lowers long-term immigration trends to the US (if life gets better in Mexico, less Mexicans need to come to the US). He also ignores what a major trading partner the US is with Mexico, so a lot of those remittance dollars find there way back to the US economy anyway.
He makes the mistake of seeing only one part of the equation.