As the government wrangled over what to do with immigrants, leading immigration economist George Borjas spun the debate to ask, “What should immigration do for the United States?”
Borjas spoke about the impact of immigration laws on the U.S. and where the country may proceed from here at the University of California, San Diego’s (UCSD) Economics Roundtable on May 3. Borjas teaches economics and social policy at the Kennedy School of Government at Harvard University.
Facts about the numbers of legal and illegal newcomers and their contribution and drain on society mean nothing unless the government determines what it expects from immigration and forms policy accordingly, Borjas said.
“Facts mean nothing for the policy unless the government has a value system to judge those facts,” he said. “For example, should our immigration policy focus on saving money for taxpayers or on helping people around the world achieve a better life?”
Canada, for example, has established a value system that attracts highly skilled workers. In order to immigrate to Canada, one must complete a test that inquires about age, education level and occupation, according to Borjas. Those who pass the test enter the country.
In comparison, the United States changed its immigration policy in 1965 to accept mainly family members of U.S. citizens. Between 2001 and 2004, 3.8 million immigrants entered the country legally, of which 2.5 million were relatives of U.S. citizens.
Borjas expects this policy to create a domino effect in which immigrants’ family members will soon become eligible, and then their relatives, and so on.
“Everyone in the world will soon qualify,” Borjas said.
Before the family preference system, the U.S. accepted immigrants based on a national origins quota system between 1924 and 1965.
The face of immigration has indeed changed since 1960, when immigrants earned approximately 6 percent more than native men, to 2000, when immigrants earned approximately 19 percent less than native men.
Borjas criticized a value system that opens the door for family members to immigrate, but does nothing to draw more skilled workers.
After 20 years of working with leaders in Washington, Borjas has little faith that immigration policy will change; only concerns for national security will bring greater equilibrium to the system, he said.
“There’s no incentive to change because the people who gain from immigration gain a lot,” Borjas said, referring to owners and investors who exploit laborers to their interest.
Immigration patterns today disproportionately benefit the rich and impair the working class, Borjas said.
“Immigration changes how the ‘economic pie’ is split,” he said. “It redistributes wealth from labor to users of immigrant labor.”
Native workers lose approximately 2.8 percent of the Gross Domestic Product (GDP), or $280 billion, while native employers gain approximately 3 percent of GDP, or $300 billion, according to Borjas.
He backed his argument with the words of Paul Samuelson, who wrote “Economics” in 1964, which critics hail as one of the greatest textbooks in its field.
“After World War I, laws were passed severely limiting immigration,” Samuelson said. “Only a trickle of immigrants has been admitted since then “¦ by keeping labor supply down, immigration policy tends to keep wages high.”
Newcomers not only drive wages down in immigrant cities found in California, Texas and Florida, they depress wages nation-wide, according to Borjas. While some economists argue that immigrants have little effect on wages or unemployment, since immigrant cities mirror comparable non-immigrant cities in wages and employment, he dismissed the evidence as superficial.
If an influx of immigrants decreases wages in one city, immigrants will move to other states where demand for laborers is high, Borjas continued.
Similarly, capital often migrates to cities full of unskilled immigrant workers so that capitalists can earn a greater return on their investment. And as immigrants disperse throughout the country, workers’ wages are dropping, Borjas said.
As for the immigration debate raging in Congress, Borjas dismissed deporting 12 million people, while contending that the system needed more border control and sanctions. He said amnesty is a “terrible idea” that will only encourage more illegal immigration, and hamper the authority of an immigration policy.
“The guest worker program is a dishonest way of encouraging immigration,” Borjas said.
As of 2004, more than 10 million illegal aliens resided in the United States, and the number grows by approximately 700,000 each year. California hosts approximately one-third of the illegal immigrants, who make up approximately 3.4 percent of the nation’s population.
Meanwhile, legal immigration levels have soared to levels comparable to the beginning of the 1900s, when immigrants flocked unchecked into the county. Desire to live in America is tremendous. Before Sept. 11, 2001, 11 million people entered the visa lottery to compete for 40,000 places, he said.
Ironically, immigration laws have tended to open doors wider, rather than curb newcomers, he said. In the mid-1990s, immigration reform disqualified non-citizens from federal aid. In response, the naturalization rate spiked and state governments ” California in particular ” picked up the slack. In turn, the burden was passed on to households. Immigration taxes the typical California household $1,200 yearly, according to the National Academy of Sciences.
Nation-wide, the net impact of immigration on the economy is minimal, as newcomers heavily tax the education and health system, but also contribute taxes. The redistribution of wealth remains critical, however, Borjas said.
“The people who gain, gain a lot, while the people who lose, lose a lot,” he said.
Borjas recently authored “Heaven’s Door: Immigration Policy and the American Economy.”