New York Times: “Fewer Immigrants Mean More Jobs? Not So, Economists Say”

by Joseph McKeown

The Trump administration last week announced support for a proposed bill aiming to reduce legal immigration in order to “preserve” jobs for Americans and increase wages. In response, leading economists say that such a reduction of legal immigration will not create more American jobs and may even have a negative impact on the economy. Economist Giovanni Peri from the University of California, Davis, for example, believes that the average American worker is likely to lose rather than gain anything from such a reduction in immigration. The administration says it still wants foreign high-skilled workers to come to the US, and the cuts target low-skilled immigrants.

The government would still issue about 140,000 merit-based Green Cards each year, while sharply decreasing the amount of individuals admitted as family members of current residents. One-third of those family members, however, who received Green Cards since 2000 had college degrees, Peri tells the New York Times. “People have an outdated image” of legal immigration, he says. “It’s mostly Asian, Indian, Chinese people who are coming to do mid- and high-level professional jobs.”

In an event at the White House last week, President Trump claimed that this “legislation demonstrates our compassion for struggling American families who deserve an immigration system that puts their needs first and that puts America first.” Critics of the proposed legislation claim that reducing immigration would actually make it more difficult for President Trump to fulfill his promises of stronger economic growth. Ali Noorani, executive director for the advocacy group the National Immigration Forum, says: “Cutting legal immigration for the sake of cutting immigration would cause irreparable harm to the American worker and their family.” The group also notes that the country will already be facing a work force gap of 7.5 million jobs by 2020.

The proposed bill, called the RAISE Act, would among other things establish a points-based system to determine who is admitted to the US and would favor applicants who score higher based on education and language ability rather than relations with family members already in the US. While it may seem like a good idea to prioritize educational level, Michael A. Clemens, an economist at the Center for Global Development, says it may not be advantageous to the economy as a whole, since many employers need workers with fewer skills. Clemens notes that the Commerce Department has projected that the demand for workers without a college education will substantially surpass the growth of the working-age population. “It’s a political myth that the principal need is for high-skilled workers,” Clemens tells the New York Times

George J. Borjas, an immigration economist from Harvard whose work is cited by the Trump administration, claims low-skilled immigration reduces the income of American workers without high school degrees. Borjas also argues that low-skilled immigration does not produce any clear benefit to the US economy because the benefits of low-cost labor are slightly outweighed by the cost of providing government services to immigrants.  Other economists have disputed Borja’s research. Perri cites various studies that actually put the negative impact of low-skilled wages close to zero.

The National Academy of Sciences assessed the “bottom line” in 2016 and found that the average immigrant cost state and local governments approximately $1,600 a year from 2011 to 2013; however, they concluded that the children and grandchildren of immigrants paid far more in taxes than they used in public services. The report concluded that immigration benefited the economy on the whole. Moreover, low-skilled immigration can also provide a boost for certain US skilled workers. For example, high-skilled women who lived in cities with high levels of immigrants were more likely to work because they could afford childcare or elder care, a 2011 study found.

The US has tried to reduce the number of foreign low-skill laborers before. In 1964, the federal government banned the use of farmworkers from Mexico. Even so, California tomato growers, who had heavily relied on Mexican workers, did not hire American workers to harvest tomatoes. Rather, they replaced the lost immigrant workers with machines. “The story that ‘when labor supplies go down, wages go up’ is a cartoon,” says Clemens,  who studied the Mexican guest-worker program, known as the Bracero program. Today, dairy farmers find themselves in a similar position. Some American dairy farmers have warned that the US may end up importing our milk supply if the government does not allow immigrant laborers to work on their farms.

Although two Republican senators sponsored the RAISE act and it’s supported by the Trump administration, it faces strong criticism from Democrats and even fellow Republicans. Senator Lindsey Graham, Republican from South Carolina, says that the bill would negatively affect agriculture and tourism, two of his state’s top industries. “If this proposal were to become law, it would be devastating to our state’s economy, which relies on this immigrant work force,” he says. “Hotels, restaurants, golf courses and farmers will tell you this proposal to cut legal immigration in half would put their business in peril.”