– August 15, 2017

The Reforming American Immigration for Strong Employment Act aims to help American workers by cutting over 10 years the number of low-skilled, non-English-speaking people who can become permanent working residents and eventually citizens.

Endorsed by President Trump and sponsored by Sens. Tom Cotton (R-AR) and David Perdue (R-GA), the RAISE Act conveys a valuable lesson in where economic illiteracy can lead.

It “will reduce poverty, increase wages, and save taxpayers billions and billions of dollars,” Trump said. “Crucially, the Green Card reforms in the RAISE Act will give American workers a pay raise by reducing unskilled immigration.… This legislation demonstrates our compassion for struggling American families who deserve an immigration system that puts their needs first and that puts America first.”

Cotton added, “Our legal immigration system should accomplish two main goals: One, it should help American workers get a decent pay raise and have a higher standard of living. And, two, it should help promote economic growth to make America more competitive in the world.” In an interview, he elaborated: “There’s a direct correlation between the mass, unskilled/low-skilled migration … and stagnant wages and standards of living for working Americans.”

And Perdue said, “We can all agree the goals of our nation’s immigration system should be to protect the interests of working Americans, including immigrants, and to welcome talented individuals who come here legally and want to work and make a better life for themselves.”

All three assume — erroneously — that low-skilled, non-English-speaking people impede economic growth and hold down wages. On the contrary, as most economists believe, skilled and unskilled immigrants have contributed to economic progress. Their production and consumption have coincided with a long-term rise in living standards.

While advocates of the RAISE Act tout the need to shift from low-skilled to high-skilled immigrants, the bill would not increase the number of high-skilled people entering the country. Rather, the act would cut the number of green cards issued by 50 percent, to about half a million, while switching to a point-based “merit” system. In other words, more high-skilled people won’t be admitted. The bill simply excludes low-skilled people. The Cato Institute’s immigration specialist, Alex Nowrasteh, notes that when the U.S. government last tried something like this by canceling a Mexican farmworker program, “wage growth for American farm workers actually slowed … because farmers mechanized agriculture and grew less labor-intensive crops rather than pay higher wages.”

Contrary to those RAISE Act advocates, low-skilled immigrants at worst depress wages for a relative few in the short run. These people are mainly recent immigrants and high school dropouts. As a 2016 National Academy of Sciences report stated:

When measured over a period of more than 10 years, the impact of immigration on the wages of natives overall is very small…. To the extent that negative wage effects are found, prior immigrants — who are often the closest substitutes for new immigrants — are most likely to experience them, followed by native-born high school dropouts, who share job qualifications similar to the large share of low-skilled workers among immigrants to the United States.…

The literature on employment impacts finds little evidence that immigration significantly affects the overall employment levels of native-born workers.

The NAS panel, which included immigration critic George Borjas, went further than previous studies in acknowledging

the role of immigrants in contributing to aggregate demand, in affecting prices faced by consumers, or as catalysts of long-run economic growth.… The contributions of immigrants to the labor force reduce the prices of some goods and services, which benefits consumers in a range of sectors including child care, food preparation, house cleaning and repair, and construction. Moreover, new arrivals and their descendants are a source of demand in key sectors such as housing, which benefits residential real estate markets. To the extent that immigrants flow disproportionately to where wages are rising and local labor demand is strongest, they help equalize wage growth geographically, making labor markets more efficient and reducing slack.

We should not be surprised that some unskilled Americans would face adjustments due to immigration, because all economic progress has a similar effect. Machines, computers, and other technologies put many farm and factory workers out of jobs. The automobile and personal computer required blacksmiths and typewriter makers to find new work. Those jobs could not have been saved without violating our freedom and stifling the rise in everyone’s living standards.

If the livelihoods of low-skilled Americans are jeopardized by newcomers without skills or English proficiency, that’s a serious indictment of America’s uncompetitive educational system and its government obstacles to entrepreneurship, as quality education and entrepreneurship opportunities would prepare workers for new jobs. (James Bovard has long documented the government’s terrible record on job training.) Moreover, if immigrants strain the welfare state — although that complaint is grossly exaggerated — maybe it’s time to reevaluate the unsustainable welfare state itself.

Stopping people from seeking better lives is no solution, because it would harm us all.

Sheldon Richman


Sheldon Richman is the executive editor of The Libertarian Institute, senior fellow and chair of the trustees of the Center for a Stateless Society, and a contributing editor at Antiwar.com. He is the former senior editor at the Cato Institute and Institute for Humane Studies, former editor of The Freeman, published by the Foundation for Economic Education, and former vice president at the Future of Freedom Foundation. His latest book is America’s Counter-Revolution: The Constitution Revisited.

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