Immigration Reform: Part of the Problem or a Solution to America’s Economic Woes?

In 2004, Harvard economist George Borjas argued that “reducing the supply of labor by strict immigration enforcement and reduced legal immigration would increase the earnings of native workers.”

In a volatile economic climate that has seen unemployment skyrocket and mass wage declines, such claims have supported, and perhaps fueled, a public willingness to make a scapegoat out of immigration.

The latest analysis on the economic impact of immigration, however, suggests that Borjas may have been off base. A recent report by the Economic Policy Institute (EPI), released this past February, found that “immigration has a small but positive impact on the wages of native-born workers overall.”

Furthermore, the EPI report dispelled the notion that foreign-born and native-born workers are interchangeable parts competing over the same jobs. Instead, foreign-born workers bring diverse backgrounds and new skill-sets to the table that complement native-born workers. As a result, native-born workers experience increased productivity and a subsequent rise in wages.

The report also argues against the increasing tendency to view labor supply as a zero-sum game in which new entrants ‘win’ at the expense of current workers. In reality, “while new workers add to the supply of labor, they also consume goods and services, creating more jobs.”

Heidi Shierholz, EPI economist and report author, claims that the real villains behind job loss and wage declines are “aggressive-union tactics, the declining purchasing power of minimum wage, and unbalanced foreign trade.”

Immigration, then, appears to be part of the solution to our economic woes, not the culprit. According to Shierholz, “we have little to fear, and much to gain, from developing a fairer, more rational immigration system.”

And it is becoming more and more evident that a new system is needed. According to a report (Beyond “Fortress America”) released by the National Research Council last year, our visa policies, which were crafted with a Cold War mentality, undermine America’s economic prosperity. “Our visa controls have made it more difficult or less attractive for talented foreign professionals to come and learn what is great about this country, or to stay and help grow the American Economy.”

In short, restrictive and scapegoat-minded immigration policies will not help American workers; indeed, they could worsen our nation’s economic troubles instead.

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