Monday, September 21, 2015

The costs of immigration are real

A recurring theme of my writing is that, first, immigration has both benefits and costs, and, second, that the costs are systematically downplayed by immigration boosters. For example, back in the spring I wrote about the fiscal cost of immigration in "The Amnesty Numbers Game":
Consider a congressional hearing held March 17 by the House Oversight and Government Reform Committee. The purpose was to determine the fiscal impact of President Obama’s executive actions on immigration, specifically the granting of work authorization via executive order to millions of illegal immigrants. Witnesses opposed to amnesty presented serious reasons why the president’s actions could impose a cost on taxpayers. At every stage of the hearing, however, Democrats responded with dismissive grandstanding and appeals to authority.
Earlier this summer I discussed the cultural cost of immigration in a piece for Real Clear Policy called "Are Low-Skill Immigrants Upwardly Mobile?":
The desire to increase social mobility has taken center stage in recent years, as lower-skill workers and their families struggle to join the middle class. A recent New York Times poll found that only 35 percent of Americans agree that "everyone has a fair chance to get ahead in the long run." The explanations for insufficient mobility are many and varied.... But whatever the root causes of class stratification, the political class tends to ignore a major policy that worsens the problem — namely, the mass immigration of low-skill workers.
Two of my most recent pieces focus on the distributional costs of immigration. Increasing the supply of labor lowers production costs, but the savings come in the form of lower wages for the workers competing with immigrants. The direct connection between the economic benefits (lower consumer prices) and distributional effects (lower wages) is sometimes denied by immigration boosters. But, as I wrote in a National Review piece, other times they are honest -- perhaps inadvertently honest:
The [farm lobby's] report is clear about the ... desire to keep wages low by increasing the supply of labor. It describes wage increases as “a strain on many U.S. farms” that other industries have managed to avoid. It shows that real wages for food preparers, housekeepers, cashiers, and other low-skill workers outside farming have decreased since 2002. The reason, according to the report, is that “employers in non-agricultural industries have been able to find enough workers to fill job vacancies without upward pressure on wages.” Farm owners wish they had the same privilege.
Finally, I wrote about an important new paper from George Borjas (my advisor in graduate school), who has re-examined the wage impact of the Mariel boatlift:
There is perhaps no economic study more often cited by immigration advocates than economist David Card’s 1990 analysis of the “Mariel boatlift.” After Fidel Castro announced in 1980 that anyone wishing to leave Cuba could do so via the port of Mariel, 125,000 Cuban immigrants came to Miami in a matter of months that summer. The sudden influx of young, able-bodied workers generated an unusually good test of how immigration affects wages. Economic theory predicts wages should have declined in Miami after the boatlift, but Card was surprisingly unable to detect any wage impact at all.
Borjas found that there was a decline in wages, concentrated among the least skilled natives.