Immigration Amnesty and Minority Workers
by Bradley J. Vasoli

In a period of anxiety about job growth, an initiative to employ millions of illegal foreign-born workers at the expense of domestic workers would strike all but a minority of Americans as bizarre. President Bush, who wishes to amnesty illegal aliens who have found work, is unfortunately in that minority.

Bush's economic logic for amnesty relies on research suggesting that our intake of immigrant labor reduces the labor costs businesses incur, thus lowering prices and allowing for higher pay for many workers. Even (for the moment) supposing this reasoning holds up, how does it affect the low-skilled workers whose ranks become swollen as a result?

In a word, significantly. A 1998 report from the Center for Immigration Studies (CIS), indicates that immigration has lowered wages for the poorest American workers by about $1,195 a year. Some researchers dispute this depressive effect on wages because the kinds of physically arduous, low-paying jobs they usually take are "jobs Americans won't do." A less provincial analysis reveals a different reality. About 10 million native-born high school dropouts over the age of 18 reside in the United States and work full-time. An inrush of similarly credentialed laborers augments the pool of competing low-skilled workers, inevitably driving down wages.

With the strain this puts upon economic fairness, there inevitably comes a strain on national cohesion, for native-born blacks and Hispanics make up large shares of the low-skilled workforce. Thus, retaining a (heretofore illegal) immigrant labor force will only stall wage growth for many black and Hispanic workers.

Because of the lower wages it creates, immigration does benefit some American businesses. For most taxpayers, however, there is a "high cost to cheap labor." Even after passage of sweeping welfare reform in 1996, the total of transfer payments made to immigrant households is disproportionately high. CIS finds that, in 2001, 30.9 percent of Mexican immigrant households used at least one federal welfare program, while the figure for all immigrant households was 21.2 percent and the figure for natives stood at 14.8 percent. Mexicans, keep in mind, comprise over 70% of the illegal alien population, according to U.S. immigration services.

The resulting costs to taxpayers are, on average, greater than any reductions in prices or uptake in income resulting from cheaper labor. According to the National Research Council (NRC), which in 1997 offered the definitive assessment of immigration's fiscal impact on the U.S., the net cost totaled $14 billion to $20 billion per year. Amnesty would only exacerbate this problem. In 2001, 31 percent of illegal Mexican immigrant-headed households utilized at least one form of government welfare, whereas 37 percent of legal Mexican immigrant-headed households did so. Bestowing legal status upon illegal immigrants would make welfare use more common.

Meanwhile, the economic gains generated by immigration are spread quite thin. The NRC estimates that the average economic gain accruing to those who benefit from immigration amounts to roughly two-tenths of one percent of their income. A policy producing, at best, modest gains for the economically well-off and substantial losses for the not so well-off doesn't befit our nation's values. (Unless you believe the poor are already overpaid.)

How can American economic gains from mass immigration be so trifling? Opinion elites usually tout immigration's contribution to economic growth as a fantastic selling point. Examining current economic numbers will shed light on the matter.

The president claims a respectable record on economic growth, and on this matter I'm not a total naysayer. The U.S. has recently seen impressive GDP growth, rising to a 20-year high in 2003. The Labor Department reported the creation of 308,000 new jobs in the past month. The president views these developments with optimism, as he should; but he would do well to take caution: The job growth accompanying this recovery has been considerably slower than in recoveries in the past. In other words, employers have significantly increased their profits without relying much more heavily on the labor supply. This doesn't exactly bespeak a need for importing workers.

Businesses need not always increase their labor supply to generate increased profits; technological innovation has proved an important element in making many industries (particularly the agricultural industry) more lucrative. Also, The Washington Times has reported that some businesses have cut their labor forces to keep costs down. Thus, we can scarcely deem labor the key to economic growth in all cases. Someone should tell President Bush.

The president has offered us an immigration policy heavy on sacrifice and light on reward. Just as amnesty would be unpalatable to an electorate professing no desire for increased immigration, so too would it be to a domestic workforce not fully at ease in its own job market.