WSJ Ignores CBO Report To Stoke Fears Of Immigration Reform


A Wall Street Journal news article stoked fears that immigration reform would lead to an increase in unemployment, while ignoring the Congressional Budget Office's assessment that in the long-term there will be no effect on the employment rate.

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A July 2 Journal article relied on man-on-the-street interviews and opinion polling to hype the fears of some Democratic voters that immigration reform could "squeeze the wages and jobs of native-born workers." Though the article cited a former chief economist at the Department of Labor who explained that immigration makes it easier for companies to hire U.S. workers, the article ignored a CBO report which found that immigration reform will have no long-term effect on unemployment and wages.

In fact, according to the CBO report, while enacting the immigration reform bill would cause a temporary increase of 0.1 percent in unemployment over the next five years because of the expanding workforce, there would be little effect in the long-term and "no effect on the unemployment rate after 2020." From the report:

In the long run, the actual unemployment rate in the economy tends to be close to its natural rate. The natural rate of unemployment of the additional immigrants would be comparable, on average, to that of the current population, CBO expects, so there would be little effect on the unemployment rate in the long run. Thus, in the long run, the number of employed people would increase by the same percentage as the growth in the labor force--by about 3½ percent in 2023 and by about 5 percent in 2033, CBO estimates.

Furthermore, the CBO found that average wages would increase by 2033, and that over the long term immigration reform would boost capital investment and raise productivity of labor and capital.

The Journal itself has previously acknowledged the economic benefits of immigration reform. Indeed a June 20 Journal editorial noted that the CBO report found the proposed legislation was "pro-growth" and would result in rising standards of living, higher wages, and increased productivity:

CBO also sensibly notes that newcomers to the U.S. tend to belong to either the least- or most-skilled groups of workers, so any harm for most average Americans is nonexistent. In fact they will benefit from rising standards of living and higher wages that faster growth makes possible.

New workers with lower skills or less education like farm hands or bar backs fill gaps in the U.S. labor market and will see their earnings rise over time. Let's also not forget that the Senate bill greatly increases H-1B visa quotas and green cards for tech and science grads, so the U.S. will see an influx of the engineers, Ph.D.s and entrepreneurs who generate the innovations that increase economic output faster. The CBO cites the large body of empirical literature on such "positive spillover effects" as a major reason productivity will rise.

Posted In
Immigration, Immigration Reform
Wall Street Journal
The Wall Street Journal
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