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What Does Immigration Actually Cost Us? What Does Immigration Actually Cost Us?
(about 7 hours later)
Last week, as soon as the National Academy of Sciences issued “The Economic and Fiscal Consequences of Immigration,” its 509-page report, interest groups on the left and right immediately claimed vindication.Last week, as soon as the National Academy of Sciences issued “The Economic and Fiscal Consequences of Immigration,” its 509-page report, interest groups on the left and right immediately claimed vindication.
“National Academy of Sciences Study Confirms Immigrants Benefit America,” America’s Voice, a liberal advocacy group, declared from the pro-immigration side. Frank Sharry, the group’s executive director, issued a statement assessing the study:“National Academy of Sciences Study Confirms Immigrants Benefit America,” America’s Voice, a liberal advocacy group, declared from the pro-immigration side. Frank Sharry, the group’s executive director, issued a statement assessing the study:
Conservatives calling for more restrictions on immigration read the same report but had a very different interpretation. “National Academy of Sciences Study of Immigration: Workers and Taxpayers Lose, Businesses Benefit,” the Center for Immigration Studies wrote. Steven Camarota, director of research at the center, said that the report demonstrated that immigration lowers the wages of American workers, to the benefit of immigrants themselves and of corporations:Conservatives calling for more restrictions on immigration read the same report but had a very different interpretation. “National Academy of Sciences Study of Immigration: Workers and Taxpayers Lose, Businesses Benefit,” the Center for Immigration Studies wrote. Steven Camarota, director of research at the center, said that the report demonstrated that immigration lowers the wages of American workers, to the benefit of immigrants themselves and of corporations:
These opposing views demonstrate the complexity of the core findings in the academy’s report, which is multifaceted enough to allow for competing interpretations. The report suggests that immigration is not a clear-cut issue in which one side is right and the other wrong, but that there are both costs and benefits.These opposing views demonstrate the complexity of the core findings in the academy’s report, which is multifaceted enough to allow for competing interpretations. The report suggests that immigration is not a clear-cut issue in which one side is right and the other wrong, but that there are both costs and benefits.
The crux of the problem is that the plusses and minuses are not distributed equally. The academy found, for example, that the willingness of less-skilled immigrants to work at low pay reduced consumption costs — the costs to consumers of goods and services like health care, child care, food preparation, house cleaning, repair and construction — for millions of Americans. This resulted in “positive net benefits to the U.S. economy during the last two decades of the 20th century.” These low-wage workers simultaneously generated “a redistribution of wealth from low- to high-skilled native-born workers.”The crux of the problem is that the plusses and minuses are not distributed equally. The academy found, for example, that the willingness of less-skilled immigrants to work at low pay reduced consumption costs — the costs to consumers of goods and services like health care, child care, food preparation, house cleaning, repair and construction — for millions of Americans. This resulted in “positive net benefits to the U.S. economy during the last two decades of the 20th century.” These low-wage workers simultaneously generated “a redistribution of wealth from low- to high-skilled native-born workers.”
The frequent harshness of these trade-offs in real life is masked by the academic language of the report, which points out that native-born workers who are substitutes for immigrants “will experience negative wage effects” — in other words, lower wages.The frequent harshness of these trade-offs in real life is masked by the academic language of the report, which points out that native-born workers who are substitutes for immigrants “will experience negative wage effects” — in other words, lower wages.
The report continues:The report continues:
While acknowledging these conflicts, the academy comes down decisively on the pro-immigration side of the debate:While acknowledging these conflicts, the academy comes down decisively on the pro-immigration side of the debate:
The academy’s report provides ammunition to both sides in the contentious debate over whether immigrants raise state and local tax burdens for education, health care and other welfare benefits or whether those costs are more than compensated for though taxes paid by immigrants: The academy’s report provides ammunition to both sides in the contentious debate over whether immigrants raise state and local tax burdens for education, health care and other welfare benefits or whether those costs are more than compensated for through taxes paid by immigrants:
In its analysis, the liberal group America’s Voice cited the academy’s statement almost verbatim. The conservative Center for Immigration Studies, on the other hand, interpreted the data to mean thatIn its analysis, the liberal group America’s Voice cited the academy’s statement almost verbatim. The conservative Center for Immigration Studies, on the other hand, interpreted the data to mean that
This ideological schism has shaped the current presidential election as well as ongoing congressional debates. Democrats have become increasingly pro-immigration while Republican voters and many members of Congress generally stand in opposition. It is this split that lies at the core of the contest between Hillary Clinton and Donald Trump.This ideological schism has shaped the current presidential election as well as ongoing congressional debates. Democrats have become increasingly pro-immigration while Republican voters and many members of Congress generally stand in opposition. It is this split that lies at the core of the contest between Hillary Clinton and Donald Trump.
Clinton described the principles underlying her position on immigration in a speech she gave in North Las Vegas last year:Clinton described the principles underlying her position on immigration in a speech she gave in North Las Vegas last year:
The principles underlying Trump’s position are diametrically opposed to those of Clinton. On his website, Trump declares:The principles underlying Trump’s position are diametrically opposed to those of Clinton. On his website, Trump declares:
Trump supporters, who are 87 percent white, are substantially more hostile to immigrants than the general public. A Pew study in August found that two thirds of Trump loyalists describe immigration as a “very big problem.” Half of Trump voters believe immigrants “are more likely than American citizens to commit serious crimes,” a figure that rises to 59 percent among his strongest supporters. In terms of work, 35 percent of Trump voters say immigrants take jobs from Americans, compared with 24 percent of all voters.Trump supporters, who are 87 percent white, are substantially more hostile to immigrants than the general public. A Pew study in August found that two thirds of Trump loyalists describe immigration as a “very big problem.” Half of Trump voters believe immigrants “are more likely than American citizens to commit serious crimes,” a figure that rises to 59 percent among his strongest supporters. In terms of work, 35 percent of Trump voters say immigrants take jobs from Americans, compared with 24 percent of all voters.
A March 2016 Pew poll found that a majority of all voters, 57 percent, said immigrants strengthen the country through hard work, compared with 20 percent of Trump voters. Thirty-five percent of all voters said immigrants burden the country “by taking jobs, housing and health care,” compared with 69 percent of Trump supporters.A March 2016 Pew poll found that a majority of all voters, 57 percent, said immigrants strengthen the country through hard work, compared with 20 percent of Trump voters. Thirty-five percent of all voters said immigrants burden the country “by taking jobs, housing and health care,” compared with 69 percent of Trump supporters.
The accompanying chart from the book “Polarized America” by the political scientists Nolan McCarty, Keith T. Poole and Howard Rosenthal illustrates the linkage between immigration and political polarization. The chart shows that over the period from 1879 to 2013, divisions between House Democrats and Republicans rose when the level of immigration was high and dropped when the level fell.The accompanying chart from the book “Polarized America” by the political scientists Nolan McCarty, Keith T. Poole and Howard Rosenthal illustrates the linkage between immigration and political polarization. The chart shows that over the period from 1879 to 2013, divisions between House Democrats and Republicans rose when the level of immigration was high and dropped when the level fell.
The intensity of the conflict over immigration is on view in the contrasting arguments of pro- and anti- immigration forces on a relatively obscure issue, remittances sent by immigrants to their families in their native countries.The intensity of the conflict over immigration is on view in the contrasting arguments of pro- and anti- immigration forces on a relatively obscure issue, remittances sent by immigrants to their families in their native countries.
Conservative organizations seeking to reduce immigration levels argue that remittances are a drain on the American economy. Limits To Growth, for example, describes remittances as money “strip-mined from the United States by foreign workers” that could have been used for productive investment in this country.Conservative organizations seeking to reduce immigration levels argue that remittances are a drain on the American economy. Limits To Growth, for example, describes remittances as money “strip-mined from the United States by foreign workers” that could have been used for productive investment in this country.
The academy’s report disputes that claim, citing studies showing that very small adverse economic consequences result from remittances, and numerous benefits, includingThe academy’s report disputes that claim, citing studies showing that very small adverse economic consequences result from remittances, and numerous benefits, including
The views of Pia Orrenius, vice president and senior economist at the Dallas Federal Reserve, reveal the complications of the politics of immigration. Orrenius served on the National Academy of Sciences panel that produced the report and she makes the case that the “Benefits of Immigration Outweigh the Costs:”The views of Pia Orrenius, vice president and senior economist at the Dallas Federal Reserve, reveal the complications of the politics of immigration. Orrenius served on the National Academy of Sciences panel that produced the report and she makes the case that the “Benefits of Immigration Outweigh the Costs:”
But, Orrenius acknowledges there are downsides. ImmigrationBut, Orrenius acknowledges there are downsides. Immigration
Orrenius points out where the disadvantages of immigration primarily accrue:Orrenius points out where the disadvantages of immigration primarily accrue:
This conclusion, which is supported by many of the empirical studies included in the report, goes to the heart of a Democratic dilemma, which the party rarely addresses publicly.This conclusion, which is supported by many of the empirical studies included in the report, goes to the heart of a Democratic dilemma, which the party rarely addresses publicly.
On one hand, support for liberalized immigration policies, including a path to legal status and citizenship for the undocumented, is crucial to winning support from Hispanic voters. A majority of Latino voters have relatives, friends and co-workers who are in this country illegally and who live in fear of deportation.On one hand, support for liberalized immigration policies, including a path to legal status and citizenship for the undocumented, is crucial to winning support from Hispanic voters. A majority of Latino voters have relatives, friends and co-workers who are in this country illegally and who live in fear of deportation.
Among Democrats of all ethnicities and races, support for immigration and immigrants has risen steadily.Among Democrats of all ethnicities and races, support for immigration and immigrants has risen steadily.
Pew Research found in August that 78 percent of Democrats agreed with the statement that immigrants “strengthen the country through hard work,” a view shared by 35 percent of Republicans. 88 percent of Democrats said undocumented immigrants should be granted legal status to stay in the United States.Pew Research found in August that 78 percent of Democrats agreed with the statement that immigrants “strengthen the country through hard work,” a view shared by 35 percent of Republicans. 88 percent of Democrats said undocumented immigrants should be granted legal status to stay in the United States.
At the same time, however, the costs of liberal immigration policies are borne most heavily by two key Democratic constituencies. Both are current targets of voter registration and get-out-the-vote drives: recent immigrants to this county and all workers without high school degrees, a group that is majority minority, 29.5 percent African-American and 35.2 percent Hispanic.At the same time, however, the costs of liberal immigration policies are borne most heavily by two key Democratic constituencies. Both are current targets of voter registration and get-out-the-vote drives: recent immigrants to this county and all workers without high school degrees, a group that is majority minority, 29.5 percent African-American and 35.2 percent Hispanic.
The economic winners from rising immigration levels are closely associated with the establishment wing of the Republican Party: “businesses and landowners and investors,” as Orrenius noted. It is just this wing that Trump ran against during the primaries.The economic winners from rising immigration levels are closely associated with the establishment wing of the Republican Party: “businesses and landowners and investors,” as Orrenius noted. It is just this wing that Trump ran against during the primaries.
The National Academy notes the tension between winners and losers throughout the report:The National Academy notes the tension between winners and losers throughout the report:
There is, however, no agreement on the scope or size of the lost wages resulting from immigration.There is, however, no agreement on the scope or size of the lost wages resulting from immigration.
Jennifer Hunt, a professor of economics at Rutgers and a member of the academy panel, wrote in an email that “what we did not come to a consensus about was a number for the wage decrease experienced by native high school dropouts.”Jennifer Hunt, a professor of economics at Rutgers and a member of the academy panel, wrote in an email that “what we did not come to a consensus about was a number for the wage decrease experienced by native high school dropouts.”
Not only was there no consensus on the academy panel on the size of the wage loss among native-born high school graduates, among immigration scholars there is a sharp debate over whether there is any loss at all.Not only was there no consensus on the academy panel on the size of the wage loss among native-born high school graduates, among immigration scholars there is a sharp debate over whether there is any loss at all.
George Borjas, an economist at Harvard and also a member of the academy panel, is a leading proponent of the argument that immigration produces substantial wage losses for native-born American workers, especially high school dropouts.George Borjas, an economist at Harvard and also a member of the academy panel, is a leading proponent of the argument that immigration produces substantial wage losses for native-born American workers, especially high school dropouts.
In a 2007 paper, “The Evolution of the Mexican-born Workforce in the United States,” Borjas, writing with Lawrence Katz, also a professor of economics at Harvard, argued that:In a 2007 paper, “The Evolution of the Mexican-born Workforce in the United States,” Borjas, writing with Lawrence Katz, also a professor of economics at Harvard, argued that:
Borjas separately concluded that all high-school dropouts experience a substantial wage loss from immigration of 6.3 percent in the short run and 3.1 percent over the long haul as labor markets adjust to the increased number of workers.Borjas separately concluded that all high-school dropouts experience a substantial wage loss from immigration of 6.3 percent in the short run and 3.1 percent over the long haul as labor markets adjust to the increased number of workers.
Katz said in an email exchange that his more recent work with Claudia Goldin, also a Harvard economist, has convinced him “that immigration is at most a small contributor to the awful real and relative wage performance of U.S. high school dropouts,” whose relative wages “fell by 40 percent compared to college graduates” from 1980 to the early 2000s.Katz said in an email exchange that his more recent work with Claudia Goldin, also a Harvard economist, has convinced him “that immigration is at most a small contributor to the awful real and relative wage performance of U.S. high school dropouts,” whose relative wages “fell by 40 percent compared to college graduates” from 1980 to the early 2000s.
Katz’s bottom line:Katz’s bottom line:
David Card, an economist at the University of California-Berkeley, disputes Borjas’s argument and contends that immigration inflicts little or no wage penalty on American workers and may in fact boost wages.David Card, an economist at the University of California-Berkeley, disputes Borjas’s argument and contends that immigration inflicts little or no wage penalty on American workers and may in fact boost wages.
In an email exchange, Card wrote that his own research suggests that the effect of immigration on native-born workers without high school degrees “is zero.”In an email exchange, Card wrote that his own research suggests that the effect of immigration on native-born workers without high school degrees “is zero.”
While the most common assumption is that a larger work force drives down wages, in practice, “when you look at the evidence, larger population normally increases productivity,” Card wrote.While the most common assumption is that a larger work force drives down wages, in practice, “when you look at the evidence, larger population normally increases productivity,” Card wrote.
For the immediate future, this and other issues involving immigration will not be resolved within academia, but litigated in the political arena. Governments everywhere will be challenged to better steer the transnational flow of populations. Still, I believe the future direction of immigration is clear.For the immediate future, this and other issues involving immigration will not be resolved within academia, but litigated in the political arena. Governments everywhere will be challenged to better steer the transnational flow of populations. Still, I believe the future direction of immigration is clear.
If the anti-immigration forces gain ground in this election, such victories will prove short-lived. For one thing, the rise in global trade and financial transactions has been steady over the past 35 years.If the anti-immigration forces gain ground in this election, such victories will prove short-lived. For one thing, the rise in global trade and financial transactions has been steady over the past 35 years.
Robert Shiller, the Nobel Prize-winning economist at Yale, maps out the probable future in his Sept. 19 essay, “The Coming Anti-National Revolution”:Robert Shiller, the Nobel Prize-winning economist at Yale, maps out the probable future in his Sept. 19 essay, “The Coming Anti-National Revolution”:
“As technology reduces the cost of transportation and communications to near the vanishing point, achieving this equalization is increasingly feasible. But getting there requires removing old barriers and preventing the erection of new ones,” Shiller writes, concluding that“As technology reduces the cost of transportation and communications to near the vanishing point, achieving this equalization is increasingly feasible. But getting there requires removing old barriers and preventing the erection of new ones,” Shiller writes, concluding that
Before we get there, though, this year’s candidates have made irreconcilable proposals on immigration.Before we get there, though, this year’s candidates have made irreconcilable proposals on immigration.
Trump, in “Crippled America: How to Make America Great Again”:Trump, in “Crippled America: How to Make America Great Again”:
I want good people to come here from all over the world, but I want them to do so legally. We can expedite the process, we can reward achievement and excellence, but we have to respect the legal process. And those people who take advantage of the system and come here illegally should never enjoy the benefits of being a resident — or citizen — of this nation. So I am against any path to citizenship for undocumented workers or anyone else who is in this country illegally. They should — and need to — go home and get in line.I want good people to come here from all over the world, but I want them to do so legally. We can expedite the process, we can reward achievement and excellence, but we have to respect the legal process. And those people who take advantage of the system and come here illegally should never enjoy the benefits of being a resident — or citizen — of this nation. So I am against any path to citizenship for undocumented workers or anyone else who is in this country illegally. They should — and need to — go home and get in line.
Clinton was more succinct:Clinton was more succinct:
The outcome on Nov. 8 will not settle this dispute, but it will give us some indication of where those who support what they see as enlightened immigration policies stand as they face those who seek to restore a lost past.The outcome on Nov. 8 will not settle this dispute, but it will give us some indication of where those who support what they see as enlightened immigration policies stand as they face those who seek to restore a lost past.