Wash. Post's Misleading Attempt To Prove Immigration Drives Down Wages

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The Washington Post cited a 2006 study by Harvard economist George Borjas to argue that immigration drives down the wages of American workers. But the Post ignored several factors contradicting that claim, including that in his 2006 study, Borjas downplayed his findings by noting that economic changes "tend to dampen the wage effects of immigration over time." Moreover, in his most recent report, Borjas admitted that the long-term effect of immigration on wages is zero, a conclusion in line with the economic consensus that immigration benefits U.S. workers.

In an article highlighting the debate over "whether low-skilled immigrants are displacing American-born workers or filling a vital economic gap by accepting jobs that many Americans are unwilling or unavailable to perform," The Washington Post cited a number of reports from the nativist Center for Immigration Studies (CIS), including one claiming that "immigrants are pushing Americans out of jobs" and another that "suggested that submissiveness rather than ambition makes low-skilled immigrants especially desirable."

The Post also included a 2006 study written by Borjas and others for the National Bureau of Economic Research, which found that "U.S.-born workers most affected by low-skilled immigration are African Americans." From the article:

Many jobs once held by black Americans are now done by Hispanic immigrants, while black unemployment has reached 13.5 percent nationwide. One study at Harvard found that between 1960 and 2000, a 10 percent increase in immigrants in various jobs reduced black wages and employment by up to 4 percent.

But experts say there are other reasons why many low-skilled African Americans are out of the job market. One is the large number who become lost to street life, prison and the stigma of being an ex-offender. In the District, over half of about 66,000 ex-offenders are jobless.

In the study, which examined the relationship between immigration and trends in black employment and incarceration from 1960 to 2000, Borjas found that "a 10-percent immigrant-induced increase in the supply of a particular skill group reduced the black wage by 4.0 percent, lowered the employment rate of black men by 3.5 percentage points, and increased the incarceration rate of blacks by almost a full percentage point." Borjas added that white men experienced a 4.1 percent wage and a 1.6 percent decline in employment over the same period.

While that study didn't map the outcome over the long run, it did note that economic changes "tend to dampen the wage effects of immigration over time." That was Borjas' conclusion in a 2007 study on the impact of Mexican immigration from 1980 to 2000, in which he wrote: "As expected, the wage impact of immigration is muted in the long run as capital adjusts to the increased workforce." In that report, he explicitly noted that high school dropouts are the most affected by immigration and that high school graduates and those with some college see their wages increase.

In his April 2013 report on immigration and the American worker from 1960 to 2010, Borjas wrote: "If we take the weighted average of the wage effects across education groups, we find that the average wage of a pre-existing worker fell by 3.2 percent in the short run and 0.0 percent in the long run."

Writing at Wonkblog, Washington Post writer Dylan Matthews noted that several studies have confirmed the fact that a sudden influx of immigrants doesn't really have an effect on wages, and that "the consensus view among economists is that the effect, even if negative, is negligible."

Indeed, findings from NBER, the Economic Policy Institute, and others confirm these results.

The Brookings Institute further noted:

Although many are concerned that immigrants compete against Americans for jobs, the most recent economic evidence suggests that, on average, immigrant workers increase the opportunities and incomes of Americans.  Based on a survey of the academic literature, economists do not tend to find that immigrants cause any sizeable decrease in wages and employment of U.S.-born citizens (Card 2005), and instead may raise wages and lower prices in the aggregate (Ottaviano and Peri 2008; Ottaviano and Peri 2010; Cortes 2008).

One reason for this effect is that immigrants and U.S.-born workers generally do not compete for the same jobs; instead, many immigrants complement the work of U.S. employees and increase their productivity. For example, low-skilled immigrant laborers allow U.S.-born farmers, contractors, and craftsmen to expand agricultural production or to build more homes--thereby expanding employment possibilities and incomes for U.S. workers. Another way in which immigrants help U.S. workers is that businesses adjust to new immigrants by opening stores, restaurants, or production facilities to take advantage of the added supply of workers; more workers translate into more business.

Because of these factors, economists have found that immigrants slightly raise the average wages of all U.S.-born workers.

Following a comprehensive study of immigration's impact on minority workers, the Immigration Policy Center recently concluded that "there is no correlation between the size of the foreign-born population and the African American unemployment rate in U.S. metropolitan areas."

In a report on the immigration bill that passed the Senate in June, the Congressional Budget Office found that if the bill became law, slight reductions in average wages for much of the next two decades would mostly be felt by newly legalized immigrants earning lower wages, and would likely not impact current U.S. residents.

It's worth noting that Borjas was the dissertation adviser for Jason Richwine, the former Heritage fellow who resigned in disgrace following widespread condemnation over his contention that Hispanic immigrants are undesirable because they have lower IQs than whites. Borjas has also been associated with CIS for years, which has a long history of smears and inflammatory rhetoric against immigrants and has been exposed as a group that misrepresents evidence and data to substantiate dubious conclusions about immigrants.

In a 2006 profile of Borjas, The New York Times reported that Borjas' arguments against immigration carried "an overtone of the ethnic selectivity that was a staple of the immigration debates a century ago":

The debate among economists is whether low-income workers are hurt a lot or just a little -- and over what the answer implies for U.S. policy. If you believe Borjas, the answer is troubling. A policy designed with only Americans' economic well-being in mind would admit far fewer Mexicans, who now account for about 3 in 10 immigrants. Borjas, who emigrated from Cuba in 1962, when he was 12 (and not long after soldiers burst into his family's home and ordered them at gunpoint to stand against a wall), has asserted that the issue, indeed, is "Whom should the United States let in?"

Such a bald approach carries an overtone of the ethnic selectivity that was a staple of the immigration debates a century ago. It makes many of Borjas's colleagues uncomfortable, and it is one reason that the debate is so charged. Another reason is that many of the scholars who disagree with Borjas also hail from someplace else -- like gardeners and seamstresses, a surprising number of Ph.D. economists in the U.S. are foreign-born.

[...]

Last year he wrote that Mexicans in America are burdened if not doomed by their "ethnic capital," and will be for several generations. In "Heaven's Door," Borjas even wrote forgivingly of the quota system enacted in the 20's, observing that it "was not born out of thin air; it was the political consensus . . . reached after 30 years of debate." These are distasteful words to many people. But Borjas does not advocate a return to quotas. His point is that Americans shouldn't kid themselves: "National origin and immigrant skills are so intimately related, any attempt to change one will inevitably change the other."

The article went on to explain that Borjas is often criticized by other economists for assuming that a native-born high school dropout "is interchangeable with an immigrant of the same skill level," even though that is not the case:

Natives have a different mix of skills -- English, for instance, or knowledge of the landscape. In economists' lingo, foreigners are not "perfect substitutes." (Friedberg also observed this in Israel.) In some cases, they will complement rather than compete with native workers. Vietnamese manicurists in California cater to a lower-price, less-exclusive market than native-run salons. The particular skills of an Italian designer -- or even an economist -- are distinct from an American's.

[...]

[M]any Mexicans work jobs that are unappealing to most Americans; in this sense, they are not exactly like natives of their skill level either. Mexicans have replenished some occupations that would have become underpopulated; for instance, 40,000 people who became meat processors immigrated to the U.S. during the 1990's, shoring up the industry. Without them, some plants would have raised wages, but others would have closed or, indeed, relocated to Mexico.

The claims about declining African-American employment because of immigration are oft-repeated talking points from CIS and right-wing media.

Posted In
Economy, Jobs, Wages, & Unemployment, Immigration, Immigration Reform
Network/Outlet
The Washington Post
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