Immigration vs. Wages

Labor, Politics, Race

One of the most interesting debates to arise out of the recent national debate on immigration is whether or not immigration drives down the wages of working class Americans. And Michelle Goldberg’s Salon piece is the best article I’ve found on the subject. In the context of discussing general divisions among progressives over the issue of immigration, Goldberg hits some of the key points of this debate.

First, Krugman’s claim that immigration does indeed drive down wages:

Paul Krugman wrote last month. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration … [W]hile immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration — especially immigration from Mexico.”

A claim backed up by Harvard economist George J. Borjas:

In a 2004 study, Harvard economist George J. Borjas wrote that by increasing the supply of labor between 1980 and 2000, immigration reduced the average annual earnings of native-born men by an estimated $1,700 or roughly 4 percent.” High school dropouts were more severely affected — their wages were reduced 7.4 percent, Borjas found. The reduction in earnings occurs regardless of whether the immigrants are legal or illegal, permanent or temporary,” he wrote. It is the presence of additional workers that reduces wages, not their legal status.”

What immigration really does is redistribute wealth away from workers toward employers,” Borjas told the Washington Post last month.

On the other side is a study by UC-Berkeley economist David Card:

in a 2005 paper titled Is the New Immigration Really So Bad?” [Card] declared that the wage gap between American dropouts and high school graduates has remained nearly constant since 1980, despite the rise of immigrants in the workplace. Overall, evidence that immigrants have harmed the opportunities of less educated natives is scant,” he wrote. A recent analysis in the New York Times, Cost of Illegal Immigration May Be Less Than Meets the Eye,” pointed out that the wages of high school dropouts in California, who face a lot of competition from illegal immigrants, fell 17 percent between 1980 and 2004. But the wages of high school dropouts in Ohio, where there are very few illegal immigrants, fell 31 percent during the same period.

Despite Card’s study, Goldberg asserts that there is a general consensus among most experts that immigration has at least some negative effect on the wages of low-skilled American workers.” But then she goes on to quote uber-labor-blogger Nathan Newman who persuasively argues that the whole debate is a distraction from the real issues:

Nathan Newman, policy director at the Progressive Legislative Action Network, points out that right now, the poorest fifth of Americans earn a mere 3.5 percent of the national income. Rather than accepting the status quo and then fighting over their small shares, Newman argues, American and immigrant workers need to join together. Turning that 3.5 percent into 7 percent, he says, would have a far more salutary effect on wages than any crackdown on immigrants.

Moreover, Newman sees the immigrant’s rights movement as a historic shift in American class politics:

The movement that brought hundreds of thousands of people into the streets this month has the makings of new political alliances that are far more stable and far more likely to create broader social change,” he says. Which is again why you see many black civil rights leaders supporting these marches. This is the alliance they want. They think it’s an alliance that can deal with these much broader issues.”

In short, the impact of immigration on wages is inconsequential compared with the massive redistribution of wealth towards the top 0.5% of the population currently taking place in America. Rather than worrying about who will get the left over crumbs, progressives need to work together to create a more equitable society.

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