Inter Press Service News Agency Saturday, June 10, 2006 15:43 GMT
MIGRATION-US: Statistics Reveal More "Winners" Than "Losers" Analysis by Peter Costantini* http://www.ipsnews.net/news.asp?idnews=33516 SEATTLE, Washington, Jun 6 (IPS) - Beneath the roar of enormous pro-immigrant rallies across the United States, and behind congressional debates over border walls and guest workers, lurks a knotty question: Who wins and who loses from illegal immigration? Comedian Jay Leno answered it facetiously on his "Tonight Show": "The good news: Congress is cracking down on illegal immigration. The bad news: a head of lettuce will now cost 300 dollars." As Leno's joke implies, there is strong evidence that consumers benefit from lower prices in industries like agriculture and construction that employ large numbers of low-wage immigrant workers. But the kindred issue of whether immigrant labour is undercutting wages and employment for some U.S.-born workers has provoked a serious debate on both the right and the left. Liberal columnists and Minuteman vigilantes alike have invoked the spectre of reduced wages and employment opportunities for those citizens who compete in the job market with undocumented workers. As proponents of competing Senate and House versions of an immigration bill wage trench warfare, proposals that would provide a path to legal status for illegal immigrants and create a guest worker programme are shining a spotlight on these concerns. Among researchers studying the issue, no clear consensus has emerged. Many do concur, though, that effects of illegal immigration on U.S. workers, positive and negative, appear relatively small. Testifying before Congress last year, Harry J. Holzer, former chief economist at the U.S. Department of Labour, concluded, "Most studies show that, over the longer term, immigrants have very modest negative effects on the employment of less-educated workers in the United States, but generate other benefits for the U.S. economy." "I think that the effects on American workers are fairly modest, and for most people they're positive," said Douglas Massey, co-director of the Mexican Migration Project at Princeton University. The economic issues are not clear theoretically or empirically, he told IPS, and answers are not overwhelmingly negative or positive. "But the evidence is consistent showing that whatever [the effects of immigration] are, they're relatively small compared to the scale of the American economy," he added. Overall, workers with a high-school education or better seem to suffer little competition for jobs or lowering of wages. Moving down the economic ladder, however, some studies show workers who did not finish secondary school being more affected by competition from newcomers. A high percentage of illegal immigrants also have less than a secondary education. This potential harm was highlighted in recent op-ed pieces in the New York Times by liberal columnists Paul Krugman and Nicholas Kristof. Both cited research by George Borjas and Lawrence Katz of Harvard University asserting that Mexican immigration to the U.S. depressed the wages of U.S.-born high-school dropouts by 8.2 percent in the course of the past 20 years. The Borjas-Katz study, Krugman noted, found that immigration plays only a "modest role" in the relative decline of wages for low-skill native workers. He forcefully rejected the restrictive immigration bill passed by the House of Representatives as "immoral" and warns that Pres. George W. Bush's plan for a guest-worker programme is "clearly designed by and for corporate interests". Nevertheless, Krugman feared that the growth of "a large disenfranchised work force", like those in Kuwait or Dubai, would undermine democracy and the interests of U.S. workers and legal immigrants. Borjas and Katz later re-examined their data, according to Eduardo Porter of the New York Times, taking into account increased capital investment by businesses benefitting from lower wages and other secondary effects. This recalculation reduced their estimate of the reduction in the wages of high-school dropouts from 8.2 percent to 3.6 percent. For the entire labour force, they found that the net effect of illegal immigrant workers was zero, because high-school and college graduates were able to benefit from the increase in cheap labour. Some who have studied the issue disagree with Borjas and Katz on the magnitude of the influence that immigrant workers have on U.S. wages. David Card, a labour economist at the University of California at Berkeley, has found that the effect on low-wage workers is very small, if there is any at all. Any losses to these workers, Card told IPS, are more than offset by gains for the majority of other workers and consumers, and on the whole national output has probably been raised by immigration. But these effects are hard to measure and the data on them suffer from high variance, he said. Whatever the reduction in wages for high-school dropouts found by Borjas and Katz, Card said, it has occurred over the span of 20 years from 1980 to 2000. Assuming a reduction of four percent in the wages of high-school dropouts, he pointed out, the effect on an hourly wage of 10 dollars would be a loss of about 40 cents over the entire 20 years, or two cents per year. Over the past two decades, wages have been increasing at roughly two percent per year, according to Card. The reduction of around four percent found by Borjas and Katz would mean a loss of that yearly increase for only two years out of 20. Comparing state and city economies across the U.S., Card's and other studies have also found no apparent correlation between percentages of illegal immigrants in the population and the median wage for less-educated workers. Based on data from the 2000 U.S. census, Card concludes in a 2005 study that "relative wages of native dropouts are uncorrelated with the relative supply of less-educated workers", even when the latter has been swelled by Latin American immigrants. "Overall, evidence that immigrants have harmed the opportunities of less educated natives is scant." Holzer, the former Department of Labour economist, also finds that the original estimates of Borjas and Katz lie towards the high end of the range of figures calculated by labour economists. Some of the negative trends found by Borjas and Katz may not be caused by immigration per se, says Massey of the Mexican Migration Project, but rather by the terms under which U.S. policies have forced immigration to occur. "Our border strategy has actually accelerated the rate of undocumented population growth, and since 1986 we've steadily penalised people more and more for being in undocumented status in the labour market," he said. *This article is the first of a two-part series on the impact of migration on the U.S. labour market. (FIN/2006) Part 2: The Myth of Low-Wage Warfare http://www.ipsnews.net/news.asp?idnews=33530 Leigh http://leighm.net/
