Immigration’s Effect on Wages: ‘Definitely Positive, Without Any Doubt Whatsoever’ (Washington Post)
The Washington Post interviews Senior Fellow Michael Clemens on the U.S. Senate's proposal to overhaul the immigrations system in a reform bill and why changes to the system will ultimately yield economic benefits.
DM: Circling back to the role of the law here, if economic patterns are actually all that determine flows, then what’s the economic case for having that immigration be legal rather than illegal? Why would a reform bill help? Obviously it’s a great thing for the immigrants in that they get to come out of the shadows, but are there other benefits?
MC: There a couple of analyses of that out there, one which just came out from the Center for American Progress, another from Raúl Hinojosa-Ojeda at UCLA, another by Silvia Helena Barcellos at RAND, and another by Pia M. Orrenius and Madeline Zavodny at the Dallas Fed and Agnes Scott. All find massive benefits to regularization, and to flows that are legal rather than unauthorized.
There are all kinds of channels by which that happens. When there’s a huge black market it’s black market workers who U.S. workers are competing against. If you’re a farmer or a contractor, if you are a parent who needs child care or — I was actually in this position myself — an employer of an elder care worker, you face this choice.
In the case of elder care, I know exactly how it works. The black market wages were about half, which means my mom’s retirement savings would last twice as long, because elder care was the main expense she had. That’s a real tradeoff, as we’re talking about limited retirement savings and how much care you’re going to get out of them, which means those people are in complete competition. Immigrants with no worker protections, that’s not something that’s good for American workers to be competing against. Obviously workers are safer, more productive, happier when they’re not competing against a Wild West of no regulation whatsoever.
I think there are lots of other reasons why regularization is beneficial. Tax revenue from them is higher. Unauthorized migrants do pay taxes, and it’s a myth that they don’t. They pay sales taxes and excise taxes, Social Security taxes for false numbers, and property taxes, but they pay more, including income taxes, when they’re authorized. That has all kinds of circular effects. It helps local and state governments deal with large flows, which helps mitigate political opposition to immigration. You can cycle in the opposite direction, as Arizona and Alabama have done, but there’s a virtuous cycle on the other side, in which making migrants part of the system makes them contributors to the system and erodes the anti-immigrant sentiments that lead to what Alabama and Arizona did.
From a research perspective, it’s notable that the only analyses I’ve ever seen from a dispassionate economic point of view show massive economic benefits.
