Report: Immigrant labor holds down wages (American workers lose $1,700/yr)

[dumpster_baby]

This report by report by Harvard University's George Borjas confirmed what many people already know--that immigration is flooding the labor supply market and is the main reason why wages are significantly lower now in real terms than they were 20 years ago.

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WASHINGTON -- Two decades of growth in the supply of immigrant workers cost native-born American men an average $1,700 in annual wages by 2000, a top economist has concluded.
....

Earlier this year, President Bush announced his own massive overhaul for immigration that would offer temporary legal status to workers now here and open the door for greater numbers of "willing workers" from abroad to take temporary jobs in America.

In his report, Borjas suggests that one effect of such proposals would be to depress wage growth for Americans at all levels of education and job skills.

...

"The reduction in earnings occurs regardless of whether the immigrants are legal or illegal, permanent or temporary," said Borjas, an immigrant from Cuba. "It is the presence of additional workers that reduces wages, not their legal status."


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http://www.chron.com/cs/CDA/ssistory.mpl/business/2547816

And American workers just keep getting slammed -- if it isn't enough that Bush is doing his best to reduce wages through increased immigration flooding the labor supply, it turns out that the Democrats in Congress are even today planning to launch comprehensive legislation to legalize immigrant workers already here and allow an increased flow of legal, temporary foreign workers. Ouch!

[Political_Junkie]

1. What's he trying to do?

Take the pressure off Walmart?
Come on we're a nation of immigrants, we always have been. Wages are going down because of outsourcing and the Walmartization of America, not immigration. If American companies would keep there jobs in America and pay their emplyees fare wages, there would be enough money to go around.
Also, I haved lived all over the country and everywhere I go it's the same story. Immigrants, legal or illegal, fill the positions that the natives of the area don't want.

[dumpster_baby]

2. well, several Ivy league economists disagree with you

Borjas, of Harvard, who is cited in the above article, is only one of many economists who have published studies showing that immigration has lowered American wages. They say that since immigration brings in more people, that it increases the supply of labor. Hmm. Ya know, I think I can buy into that one. What about you?

Further, they say that increasing the supply of labor lowers the price of labor. They cite the "law of supply and demand." Ya know, I think I have heard of that "law of supply and demand" before!

Well, upon due reflection and consideration, I think I believe them and their multiyear studies more than I believe you. Sorry. No offense. :-)

[54anickel]

3. A few comments

From the article posted:
The Borjas study on the impact is unusually bleak, said Jared Bernstein, senior economist with the Economic Policy Institute, a research group financed by labor unions.

"I think the magnitude of the effect is quite large relative to other research," Bernstein said, arguing that the impact on wages is probably somewhat less dramatic.

Bernstein also said immigration reforms could change the equation by improving immigrants' status and wages.

First, I am a bit suspect of an article that claims the EPI is a group financed by labor unions. This is the first article I have seen that makes that claim. It tends to label the EPI as a tool of the labor unions which I believe to be unfair and untrue.

http://www.epinet.org/content.cfm/about

When was EPI established, and why?

EPI was established in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers. Today, with global competition expanding, wage inequality rising, and the methods and nature of work changing in fundamental ways, it is as crucial as ever that people who work for a living have a voice in the economic debate.

Who founded EPI?

EPI was founded by a group of economic policy experts that includes Jeff Faux, EPI's first president; economist Barry Bluestone of Northeastern University; Robert Kuttner, columnist for Business Week and Newsweek and editor of The American Prospect; Ray Marshall, former U.S. secretary of labor and professor at the LBJ School of Public Affairs, University of Texas-Austin; Robert Reich, former U.S. secretary of labor and professor at Brandeis University; and economist Lester Thurow of the MIT Sloan School of Management.

What makes EPI unique?

EPI was the first -- and remains the premier -- organization to focus on the economic condition of low- and middle-income Americans and their families. Furthermore, it adheres to strict standards of sound, objective research and analysis, and couples its findings with outreach and popular education.

snip>

Who supports EPI?

EPI is a 501(c)(3) corporation. A majority of its funding (about 60% in 2001) was received through grants from foundations. EPI also receives support from individuals, corporations, labor unions, government agencies, and other organizations.

You state:
Borjas, of Harvard, who is cited in the above article, is only one of many economists who have published studies showing that immigration has lowered American wages.

Have you read his research paper discussed in this article?

http://ksghome.harvard.edu/~.GBorjas.Academic.Ksg/Papers/QJE2003.pdf

There have been many changes to economic policys in the last 20 years. First I can think of is Reaganomics. Then let's not forget the impotency of labor unions that began with Reagan. The 90's brought us more globalization, the new economy, stock options for senior executives, the huge disparity between upper management and worker salaries, etc.

Your "Ivy school" hero seems to be applying a bit of tunnel vision to his thoughts and also makes some assumptions in the paper.

Perhaps a bit of inquiry and discernment should be applied before simply accepting an "opinion" that could easily lead a less discerning public to misplaced prejudice. I am not saying that immigration has not possibly contributed to lower wages. Big looking at the bigger picture, it's contribution is more likely to be much less of a factor than the posted article would want one to believe.

The questions and debate will continue both here and in Europe as we deal with a smaller population of "native born" (Borja's term, not mine) workers to support the larger retiring baby boomer generation. Finger pointing and inciting arguments among the working class is not helpful in this endeavor.

Maybe if you thought of your ivy league heros as members of the society that wrote the letter to the working class you also posted you may have a different perspective on the immigration piece.

8. Outsourcing next wave of cheaper immigration

Outsourcing cheapens labor even more, and provides a quicker path than having to move employees in, at least in the white collar fields.

Dan

[TO Kid]

5. Zero-sum mythology

What the immigrant-bashers tend to ignore is the effect on the demand side when more people are contributing to the economy. They're taking jobs, sure, but unless they're sleeping on park benches, eating nothing and sending their paycheques out of the country then they're not "taking away" any jobs, they're growing the economy.

9. Yes but

When outsourcing is used as an alternative to immigration--which it increasingly is--the economy isn't grown.

[bemildred]

4. It's no either/or.

All these factors matter, and in fact they are synergistic.

[Maestro]

6. Don't blame the immigrants!!!!

And I am just assuming that most of the immigrants that are considered ones "stealing jobs" from Americans and driving wages down are the Mexicans; however, you can not blame them. They come because American business offers them these low paying jobs which is better than no job in Mexico. I think freepers are such hypocrites when they bash immigrants because it is their corporate friends and small business owners that continue to exploit them!!!!!

[bemildred]

7. Well duh.

And the government lets them.
Meanwhile there is plenty of money for the drug war, the
war in Iraq, and the tax cuts for millionaires.