Mexican Wave By STEPHEN HABER WSJ May 3, 2006; Page A14
What policy should America adopt toward illegal immigrants from Mexico? One view is that they drive down the wages of American workers, burden taxpayers and undermine the integrity of American culture. That view is embodied in the recent immigration bill passed by the House of Representatives: It seeks to seal off the border and treat immigrants who are already here as felons.
A second view is that Mexican immigrants increase the competitiveness of the U.S. economy. That view is embodied in draft legislation in the Senate that would make it possible for illegal immigrants who have been in the U.S. for more than five years to obtain a visa and eventually citizenship -- provided they learn English. The Senate bill also contains provisions for workers who have been here for less than five years to either obtain a green card or become a guest worker, after they return to Mexico and make the necessary applications.
Any serious attempt at reform needs to take account of facts regarding illegal immigrants that are often given a back seat to ideology by partisans on either side of the debate. Any serious attempt at immigration reform also needs to take account of facts about Mexico's fragile economy and democracy -- facts that both sides in the debate have tended to miss entirely. Indeed, most discussion about immigration reform implicitly assumes that its effects stop at the border. The truth is that our immigration policy is more consequential for what happens to Mexico's political and social stability than it is for America's economy or cultural integrity.
Those who favor a "soft line" on Mexican immigration often simultaneously argue that Mexican workers make American industry more internationally competitive and that Mexican workers do not reduce the wages of U.S.-born workers. Both statements could simultaneously be true if Mexican immigrants included large numbers of highly educated electrical engineers and molecular biologists who had a tremendously positive effect on American total factor productivity. But Mexican immigrants tend to have very low levels of education by U.S. standards; they also tend to cluster in industries that produce goods that do not enter into international trade, such as restaurant meals, home construction, landscaping and janitorial services.
The overall effect of Mexican immigration on the U.S. economy is trivial -- almost certainly less than one-tenth of 1% of GDP. Moreover, to the degree that Mexican immigration makes some industries more internationally competitive, it does so by reducing the wages of the U.S.-born workers in those industries. The reduction is not trivial. Careful research done by Harvard's George Borjas indicates that Mexican immigration has caused a 7% decline in the wages of U.S.-born high school dropouts, and a 1% decline in the wages of workers with only a high school diploma. Score one for the hard-liners on immigration.
Here's another load, if you have time :-) - p.1
By STEPHEN HABER
WSJ May 3, 2006; Page A14
What policy should America adopt toward illegal immigrants from Mexico? One view is that they drive down the wages of American workers, burden taxpayers and undermine the integrity of American culture. That view is embodied in the recent immigration bill passed by the House of Representatives: It seeks to seal off the border and treat immigrants who are already here as felons.
A second view is that Mexican immigrants increase the competitiveness of the U.S. economy. That view is embodied in draft legislation in the Senate that would make it possible for illegal immigrants who have been in the U.S. for more than five years to obtain a visa and eventually citizenship -- provided they learn English. The Senate bill also contains provisions for workers who have been here for less than five years to either obtain a green card or become a guest worker, after they return to Mexico and make the necessary applications.
Any serious attempt at reform needs to take account of facts regarding illegal immigrants that are often given a back seat to ideology by partisans on either side of the debate. Any serious attempt at immigration reform also needs to take account of facts about Mexico's fragile economy and democracy -- facts that both sides in the debate have tended to miss entirely. Indeed, most discussion about immigration reform implicitly assumes that its effects stop at the border. The truth is that our immigration policy is more consequential for what happens to Mexico's political and social stability than it is for America's economy or cultural integrity.
Those who favor a "soft line" on Mexican immigration often simultaneously argue that Mexican workers make American industry more internationally competitive and that Mexican workers do not reduce the wages of U.S.-born workers. Both statements could simultaneously be true if Mexican immigrants included large numbers of highly educated electrical engineers and molecular biologists who had a tremendously positive effect on American total factor productivity. But Mexican immigrants tend to have very low levels of education by U.S. standards; they also tend to cluster in industries that produce goods that do not enter into international trade, such as restaurant meals, home construction, landscaping and janitorial services.
The overall effect of Mexican immigration on the U.S. economy is trivial -- almost certainly less than one-tenth of 1% of GDP. Moreover, to the degree that Mexican immigration makes some industries more internationally competitive, it does so by reducing the wages of the U.S.-born workers in those industries. The reduction is not trivial. Careful research done by Harvard's George Borjas indicates that Mexican immigration has caused a 7% decline in the wages of U.S.-born high school dropouts, and a 1% decline in the wages of workers with only a high school diploma. Score one for the hard-liners on immigration.