More on the CEA Report

I wrote here about a report by the Council of Economic Advisers titled “Immigration’s Economic Impact” which came out a few days ago. The study was widely reported as finding a substantial net positive impact from immigration, and thereby supporting the administration’s proposal for comprehensive immigration reform. I pointed out that the study made no effort to distinguish legal from illegal immigration, and conflated the economic impact of high-skilled immigrants, which is overwhelmingly positive, with the economic impact of low-skilled immigrants, which is more mildly negative. This averaging-out struck me as pointless, since virtually all of the high-skill immigrants are legal, and the point of immigration “reform” is to regularize and make more or less permanent the status of illegal immigrants, who are overwhelmingly lower-skilled, and provide for the importation of more such immigrants in the future.
Dafydd ab Hugh disagreed with me in several respects. First, he accused me of a non sequitur, since my argument assumes that passing “reform” legislation will lead to more illegal immigration.
I think it will. But the question can be framed more precisely as follows: under which scenario will we have a larger population of low-skilled immigrants: comprehensive “reform,” under which 12 million or so current illegals will be legalized and many more “guest workers” will be imported, and, perhaps, more illegals will be encouraged to sneak across the border, having inferred that doing so carries no serious consequences; or the alternative of strengthening the border, enhancing employer enforcement, and not adopting a guest worker program. The answer, I think it is obvious, is the former; and that assumption is implicit in the arguments in favor of “reform.”
Dafydd argues further that the comprehensive bill gives increased priority to high-skilled immigrants, which, as the CAE study shows, bring substantial economic benefits. That’s right; it exemplifies why I don’t like the idea of a “comprehensive” bill. I’m in favor of changing our legal immigration system to favor skilled immigrants who can benefit this country, not relatives of existing immigrants. But we shouldn’t need “comprehensive” reform to achieve this change.
Daffyd argues, finally, that my position amounts to “labor protectionism.” I guess that’s right. I believe in borders and in citizenship, which implies “protection” of our own citizens. There are around 6 billion people in the world, and at least 5 billion of them would be better off here. As Dafydd says elsewhere in his post, I think that we should adopt an immigration policy that maximally benefits the United States.
Dafydd concludes with the observation that “the argument from economics is a lousy reason to oppose this bill; national economics actually supports some form of comprehensive immigration reform.” Putting aside the key phrase “some form of,” I want to repeat a point I have made elsewhere but did not emphasize in my post on the CEA report: I think it is entirely possible that our failure to enforce our immigration laws over a period of decades may have benefited our economy, and that “comprehensive reform,” to the extent that it means more of the same, might also benefit the economy. I assume that’s why the Wall Street Journal and the Chamber of Commerce are in favor of it.
My objection is narrower: I’m concerned about the social effects of a policy that inevitably has the effect (as the CEA acknowledges) of holding down the wages of lower-skilled Americans. An obvious feature of our economy over recent decades has been the ever-increasing premium on training and education. High-skilled incomes have risen markedly, lower-skilled incomes have stagnated. To some extent, this is inevitable: wages follow productivity, which rises with training and education. But I question whether it makes sense to aggravate that reality through our immigration policy.
I am not an immigration absolutist. It may be that some importation of low-skilled workers is appropriate; possibly a guest worker program is a good idea. I have an open mind on these issues. But we need a full, open and thorough debate, not a bill that is cobbled together in secret and hustled through Congress by dead of night. And the various elements of immigration policy should be voted on separately, without the most obviously desirable changes being held hostage to the most dubious.
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