The Immigration Equation

July 9, 2006
The Immigration Equation
By ROGER LOWENSTEIN/ New York Times

This is a really good piece that lays out well the economics versus the politics of immigration reform--based on what highly regarded economists opine. In particular, Lowenstein makes the case that economists make: "Market forces like supply and demand, not legal status, are what determine wages." So legalizing the immigrant labor pool (which labor supports) will not raise wages (which is labor's wager), but neither will it necessarily depress it. Immigrants are consumers; plus, their presence spurs myriad other business activity (housing, small businesses like restaurants, etc.) Also, immigrants pay into social security.

Lowenstein hangs his hat on UC Berkeley professor, David Card's analysis--as appeared in a recent paper, "Is the New Immigration Really So Bad?"

"Despite the recent onslaught of immigrants, he [Card] pointed out, U.S. cities still have fewer unskilled workers than they had in 1980. Immigrants may be depriving native dropouts of the scarcity value they might have enjoyed, but at least in a historical sense, unskilled labor is not in surplus. America has become so educated that immigrants merely mitigate some of the decline in the homegrown unskilled population. Thus, in 1980, 24 percent of the work force in metropolitan areas were dropouts; in 2000, only 18 percent were."

Giovanni Peri, at University of California, Davis, helps to settle the debate over wage depression by pointing out that most of the competition that immigrants face is with each other.

In any case, this is the best layman's piece I've read in awhile. -Angela