Thread: Favorite Study of Open Borders Advocates Debunked: Immigration Reduces Wages

Favorite Study of Open Borders Advocates Debunked: Immigration Reduces Wages


AP/Miami Herald/Tim Chapman

by Julia Hahn : 13 Jan 2016 Washington D.C.76


New analysis reveals that one of the signature studies relied upon by open border enthusiasts— which claims that immigration
does not affect wages— has been debunked.

Prior to this new analysis, the study was a seminal tool in the arsenal of advocates for expansive immigration policies. The new analysis by
Harvard professor George Borjas finds that— consistent with economic theory— immigration does, in fact, have a negative impact on wages
of American workers. The Wall Street Journal and Business Week have described Borjas as “America’s leading immigration economist”.

The original 25-year-old study relied upon by immigration expansionists was carried out by Berkley economist David Card and analyzed the
impact of tens of thousands of Cuban immigrants from the Mariel boatlift who came to Miami in 1980. In his 1990 study, Card wrote that
the “Mariel influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers.”

As public policy analyst Jason Richwine has explained, to this day Card’s Mariel boatlift study continues to be the go-to analysis used by
open borders advocates—thus underscoring the importance of Borjas’s new analysis debunking it. In a recent piece in RealClear Policy,
Richwine writes:

The Card study is ubiquitous in immigration advocacy, garnering citations in seemingly every case for loosening the borders. It is ‘the
single greatest bit of evidence’ that immigration does not harm native wages, according to Adam Davidson in a recent piece for the
New York Times Magazine. Davidson argues that, based on the Mariel experience, the U.S. can take in 11 million immigrants per year
without negative effects. And why stop at 11 million? In making a recent argument for open borders, Vox’s Dylan Matthews cited the
boatlift as his first piece of evidence that immigration has a “neutral or positive” effect on native workers.

Borjas’s new analysis makes clear that Card’s original findings are almost certainly wrong and that immigration did reduce wages for natives in
competition with immigrants. Borjas explains that Card’s study failed to appropriately examine how the Marielitos impacted the wages of the
pre-existing workers, who– due to similar skill levels– were put in direct competition with the new influx of workers.
Borjas writes:

Any credible attempt to measure the impact must carefully match the skills of the immigrants with the skills of the pre-existing workforce…
The analysis of the available microdata using this new perspective provides a very different picture of what happened after Mariel. As is well
known, the Marielitos were disproportionately low-skill; around 60 percent were high school dropouts and only 10 percent were college
graduates. At the time, about a quarter of Miami’s pre-existing workers lacked a high school diploma. As a result, even though the Mariel
supply shock increased the number of workers in Miami by 8 percent, it increased the number of high school dropouts by almost 20 percent.
The unbalanced nature of this supply shock obviously suggests that we should look at what happened to the wage of high school dropouts
in Miami before and after Mariel. Remarkably, this trivial comparison was not made in Card’s (1990) study and, to the best of my knowledge,
has not yet been conducted.

Contrary to Card’s claim, Borjas found that:

By focusing on this very specific skill group, the finding that the Mariel supply shock did not have any consequences for pre-existing workers
immediately disappears. In fact, the absolute wage of high school dropouts in Miami dropped dramatically, as did the wage of high school
dropouts relative to that of either high school graduates or college graduates. The drop in the low-skill wage between 1979 and 1985 was
substantial, perhaps as much as 30 percent.

Shortly after Borjas released his new findings, UC Davis’s Giovanni Peri, the favorite economist of open-border advocates, and his colleague Vasil Yasenov,
put out their own paper examining Borjas’ analysis in the hopes of redeeming the original Card study. The two write: “We think the final goal of the economic
profession should be to agree that, even using the more current econometric methods, we do not find any significant evidence of a negative wage and
employment effect of the Miami boatlift and move to analyze other cases…”

As Borjas points out, this declaration is “revealing.” Borjas writes: “I do not usually think of economists as having a ‘final goal’ that is anything other than a
careful and systematic evaluation of the evidence. [Peri and Yasenov’s] declaration that the ‘final goal of the economic profession should be to agree that…
do not find any significant evidence of a negative wage and employment effect’ is, at best, peculiar.”

Indeed, as Borjas has pointed out, Peri and Yasenov make a number of “questionable assumptions” and “dubious data manipulations” in their effort to save
Card’s study. For example, Peri and Yasenov classify high school juniors and seniors as “high school drop outs” [Peri’s term].

Borjas told Breitbart News exclusively, “This is not the first time that Peri has conducted this particular and very weird data manipulation. Coincidentally,
each time that he does this, the empirical evidence that immigration has a wage impact conveniently disappears.”

Borjas said:

Most blatantly, Peri misclassifies all high school students who have yet to graduate as ‘high school dropouts’ [Peri’s term] simply because they don’t
have that piece of paper in their hands yet… in my view, including high school students as part of the ‘low skill workforce’ makes no sense whatsoever
and is a really egregious conceptual error—an error that anyone with a teenager at home can easily understand and appreciate. In fact, the error should
force any reasonable person to wonder how and why anyone would think that your teenage son/daughter who is a junior in high school is a high school
dropout. Because this is the second time that this error appears in Peri’s work, it emphasizes the fact that it’s wise to look at what people—and, in
particular, Peri—actually do before one uses their ‘findings’ as evidence of anything.

What perhaps is most remarkable about open borders advocates’ attempts to cling to their claim that immigration does not negatively impact wages is that many
of the most vocal advocates of large-scale migration in Congress– such as House Speaker Rep. Paul Ryan (R-WI) – have been quite open in their declarations that
more immigration will help keep wages lower.

For instance, in a 2013 National Journal story prominently featured on Ryan’s website entitled, “Paul Ryan: Immigrants Bring Labor to Our Economy So Jobs Can
Get Done,” Ryan details how immigration helps keep wages lower.

The Journal writes, “If Republicans want to grow the economy, what better way, [Ryan] asks, than to bring 11 million new workers into the country under a more
structured system to perform high-skilled jobs, plug labor shortages, and stay off welfare rolls?”

Ryan told the Journal that the case for more low-skilled workers is specifically that they help keep wages low:

[They] bring labor to our economy so jobs can get done. The dairy farmers in western Wisconsin are having a hard time finding anyone to help them produce their
products, which are mostly cheese. If they can’t find workers, then they can’t produce, and we’ll end up importing. The flip side of the argument is: Just raise wages
enough to attract people. But you raise wages too much in certain industries, then you’ll get rid of those industries, and we’ll just have to import.

“Ryan’s argument about low wages being good for the country is very strange,” said the Center for Immigration Studies’ Director of Research, Steve Camarota. “First,
wages for agricultural workers constitute only a tiny share of the price for food, so even if we let wages rise a good deal for such workers by reducing immigration, it
would have almost no impact on the price of food. Second, keeping wages low may be good for some employers, but not taxpayers. By design, low wage workers pay
relatively little in taxes, but tend to use a lot in public services. For example, 77% of working households headed by an immigrant without a high school education use
welfare. Employers may not see these costs, but they are very real for taxpayers. When we look at the impact on American workers or American taxpayers, it’s
extremely hard to argue that bringing in low-skilled workers makes sense.”

Read More Stories About:

Big Government, Immigration, Economics, center for immigration studies, Mariel boatlift, George Borjas, Giovanni Peri, Vasil Yasenov, David Card

http://www.breitbart.com/big-governm...reduces-wages/

I was a union carpenter. Our guys had to have extra jobs to do when the big commercial projects slowed down. Their idiot president Douglas McCarron is a Southern Californian who has led the union, or tried, into encouraging illegal aliens and organizing them. No more garage building jobs, or roof replacement, or fences; let the illegals take over? Yeah right! McCarron is just a sleazy guy only out for himself.

BTT

I'm moving this back to the top because I feel it is very important that everyone have a chance to read it.

Posted By Rachel Stoltzfoos On 2:33 PM 01/16/2016

At a time when wages are stagnant and record numbers of Americans are not working, the foreign-born population of the United States is exploding to record breaking heights in both size and proportion of the U.S. population — something most of the political elite maintains is good for U.S. workers.

“Immigrants aren’t the principal reason wages haven’t gone up enough,” President Barack Obama said in his State of the Union address Tuesday, placing the blame instead on greedy business executives.

“The math in the modeling gets complicated here,” reports The Washington Post, “but the end result, the researchers find, is that even lower-skilled native-born workers are better off with more trade and immigration.”

Here are some not-so-complicated indicators the current “more the merrier” approach to immigration, which has been working itself out for decades, is costing American workers wages and jobs.

After Congress re-wrote U.S. immigration policy in 1965, the foreign-born population increased dramatically in an unprecedented immigration wave that reshaped the racial and ethnic makeup of the United States. At the same time, wages stagnated, increased slightly, and then fell.

Since 1970, the foreign-born population of the U.S. increased 325 percent, the Congressional Research Service found, while wages for the bottom 90 percent of earners decreased by 8 percent and their share of income decreased by 16 percent.


(Congressional Research Service)

Workers in industries where demand for work is increasing are actually the hardest hit by continued decline in wages, reported The New York Times. One explanation for that trend, evidenced by the Brookings Institution, is that immigrants are flooding those labor markets in particular. The left-of-center think tank found in 2012 that many of the jobs in the occupations deemed fastest and largest growing by the Bureau of Labor Statistics are going to immigrants — in many of the same occupations The New York Times reported have seen the greatest decline in wages in recent years.

Harvard Professor George Borjas estimates high immigration levels from 1980-2000 lowered the wages of lower-skilled working Americans by 7.4 percent, and that current immigration rates cost American workers who compete with foreign labor $402 billion every year.

Record numbers of Americans do not even hold paying jobs.

The labor force participation rate has fallen to its lowest level since the 1970’s, when the foreign-born population began to surge and wages flatlined. Nearly 40 percent of Americans 16 or older are not working or looking for work, and the share of both men and women in the workforce has dropped.

This is not merely the result of an aging population. “The share of prime-age men — those 25 to 54 years old — who are not working has more than tripled since the late 1960s, to 16 percent,” reported The New York Times in December, adding: “Working, in America, is in decline.”

All net job gains among the working-age population of the United States from 2000-2014 went to foreign-born workers, according to an analysis by the Center for Immigration Studies based entirely on federal data. At the same time, the number of working-age residents born in the U.S. increased by nearly 17 million, accounting for two-thirds of the growth in the total working-age population.

“The point is, I believe, that in this new economy, workers and start-ups and small businesses need more of a voice, not less,” Obama said in his State of the Union address, immediately after blaming greedy executives for stagnant wages in the country. “The rules should work for them.”

Nearly one in five U.S. residents will be an immigrant by 2060, largely because of legal immigration, not illegal immigration, a recent analysis of Census data found. If federal law is not changed, the U.S. is on track to issue 10 million green cards over the next decade — a massive new permanent resident bloc larger than the combined populations of Iowa, New Hampshire and South Carolina.

http://dailycaller.com/2016/01/16/si...ts-us-workers/