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Karen wrote: From what I’ve read, the economic studies are mixed whether
illegals drive wages down for other workers. Arthur wrote: If the illegals didn't drive down wages
or, at least, disallow wages to rise then all of economic theory must be
wrong. I can't see how illegals would have no impact and I believe that
their impact is to affect the lowest paid workers in our society who can't get
increased wages: Asking for more means the employer would turn to the illegal
instead. Some argue that much of those decreases are the result of the loss of
union jobs, not illegal workers per se
and have to be factored into overall changes in the jobs economy. Here are a few items: From Center for American Progress: Alan Krueger, the Bendheim Professor of Economics and Public Policy at
Princeton, argues that the best available economic evidence suggests that
increased immigration has little impact on wages for low-wage domestic
workers. He also argues that if we are serious about helping low-income
workers, we need to act now on measures that can have a much larger impact,
like increasing the minimum wage. Krueger's paper concludes by discussing
the importance of protecting the rights of immigrant workers--to maximize their
contribution to our economy and to prevent exploitation of both these workers
and domestic workers. Read complete memo (PDF) Let's do immigration right How to avoid the mistakes we made when we argued about free trade. By Gene Sperling, for Fortune magazine, April 18, 2006: 7:22 AM EDT NEW YORK - The boiling
debate over the economics of immigration may give you an eerie sense of déjà
vu, and no wonder: Its superheated rhetoric recalls the polarized and
exaggerated arguments over open trade and globalization in the 1990s. Foes of immigration
try to brush off legitimate macroeconomic studies like the 1997 National Research Council report that
shows immigration adds $10
billion a year
to the economy, and the work of academics like Giovanni Peri and
Gianmarco Ottaviano,
who found that immigration raised average wages by as much as 2.5% in the
1990s. Instead, the critics
often point to real problems that immigration aggravates, like bloated state
budgets and reduced opportunities and wages for low-skilled minorities. But
then they pin the blame entirely on the worker influx - not unlike trade
critics who rightly complained of disturbing economic inequality in Mexico, but
wrongly implied that NAFTA was the primary culprit, not simply a policy that
failed to cure it. Meanwhile, supporters
of immigration have been repeating mistakes from the trade debate too. Many of
us who fought for market opening back in the '90s made blanket statements about
its benefits for jobs and the economy while pooh-poohing or ignoring its harsh
impact on particular communities and groups of workers. Supporters also tend
to gloss over the degree to which significant increases in immigration can
depress wages and even cost jobs of low-skilled U.S. workers. Harvard's George Borjas and Larry Katz have found that between 1980 and 2000, predominantly
low-wage immigration from Mexico depressed the wages of U.S. high school
dropouts by 7.7% compared with those of their college-educated peers. While there is no
shortage of cases where increased immigration hurt a specific group of
low-skilled workers, few are as vivid or devastating as what befell
African-American janitors 25 years ago in Los Angeles. After seeing steady
gains through the work of their union, SEIU Local 399, the janitors were making
a solid $12 an hour in 1983 (equivalent to about $24 an hour today). Then nonunionized companies using workforces 94%
made up of illegal immigrants earning less than $4 an hour stole away the best
contracts. The result, according
to a Government Accountability Office report, was that unionized black janitors
saw their ranks collapse from 2,500 in 1977 to 600 in 1985 - with only 100
still making top wages. Yet the woes of such groups may get lost in the wash in
large economic studies. Acknowledging
immigration's impact on low-skilled workers is not a call to close U.S.
borders, deny our heritage as a nation of immigrants, or ignore immigration's
compellingly positive effect on prices and productivity. Rather, it is
recognition that, as with aspects of trade, we need to offset the harm that
tends to concentrate on those who are already most vulnerable to economic
change. For low-income workers
affected by immigration, buffering the costs could mean raising the minimum
wage or expanding effective programs for at-risk minority youths, like the Job
Corps, which takes disadvantaged kids out of their neighborhoods for intensive
training and education. Business advocates as
well as advocacy groups for Hispanics and African Americans might also propose
boosting the earned income tax credit both for individuals and for families
with more than two children. Today this subsidy doesn't provide extra help for
larger families or offer more than a few hundred dollars to the childless
working poor. Enhancing it might keep these folks out of poverty, compensate
for wage losses they may suffer from greater immigration, and provide a
stronger incentive for them to stay in the workforce. Addressing real harms
to vulnerable workers is a far better course than either turning our backs - or
shutting America's doors. Gene
Sperling is a former National Economic Advisor, Senior Fellow at the Center for
American Progress, and author of "The Pro-Growth Progressive" (2005). http://money.cnn.com/2006/04/17/magazines/fortune/immigration_fortune_050106/ Related NYT 041606:
Cost of illegal immigration may be less than meets the eye Even economists
striving hardest to find evidence of immigration's effect on domestic workers
are finding that, at most, the surge of illegal immigrants probably had only a
small impact on wages of the least-educated Americans — an effect that was
likely swamped by all the other things that hit the economy, from the
revolution in technology to the erosion of the minimum wage's buying power. When Mr. Borjas and Mr. Katz assumed that businesses reacted to the extra workers with
a corresponding increase in investment — as has happened in Nebraska — their
estimate of the decline in wages of high school dropouts attributed to illegal
immigrants was shaved to 4.8 %. And they have since downgraded that number,
acknowledging that the original analysis used some statistically flimsy data. Assuming a jump in
capital investment, they found that the surge in illegal immigration reduced
the wages of high school dropouts by just 3.6 %. Across the entire labor force, the
effect of illegal immigrants was zero, because the presence of uneducated
immigrants actually increased the earnings of more educated workers, including
high school graduates. For instance, higher-skilled workers could hire
foreigners at low wages to mow their lawns and care for their children, freeing
time for these workers to earn more. And businesses that exist because of the
availability of cheap labor might also need to employ managers. Mr. Borjas said
that while the numbers were not large, the impact at the bottom end of the
skill range was significant. "It is not a big deal for the whole economy,
but that hides a big distributional impact," he said. Others disagree. "If you're a
native high school dropout in this economy, you've got a slew of problems of
which immigrant competition is but one, and a lesser one at that," said
Jared Bernstein of the Economic
Policy Institute, a liberal research group. Mr. Katz agreed
that the impact was modest, and it might fall further if changes in trade flows
were taken into account — specifically, that without illegal immigrants, some
products now made in the United States would likely be imported. "Illegal
immigration had a little bit of a role reinforcing adverse trends for the least
advantaged," he said, "but there are much stronger forces operating
over the last 25 years." http://www.nytimes.com/2006/04/16/business/yourmoney/16view.html ALSO SEE Q&A: Illegal
workers and the US Economy http://www.npr.org/templates/story/story.php?storyId=5312900 Replacing the
undocumented workforce http://www.americanprogress.org/site/apps/nl/content3.asp?c=biJRJ8OVF&b=1002793&ct=2145825 |
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