NATIONAL REVIEW ONLINE
January 10, 2014 4:00 AM
How to Increase Unemployment
Gang of Eight–style immigration reform would also depress the wages of low-skill workers.
By Andrew Stiles
Five years after winning control of the White House and Congress, Democrats can’t wait a minute longer for a serious conversation about income inequality, a problem that is considerably worse under President Obama than it was under his much-maligned GOP predecessor. Republicans naturally accuse the president of wanting to double down on anti-poverty measures that haven’t worked, but they too seem eager to engage the issue. This decision to make income inequality the priority issue in 2014 is noteworthy in light of last year’s priority issue: comprehensive immigration reform.
Although dormant for the past few months, immigration reform is still alive. The Republican party is divided, but House leadership has signaled a willingness to act, as business groups spend millions lobbying for a bill. Though many obstacles remain, there is a reasonable chance that Gang of Eight–style reform could pass in some form. On the other hand, there is a near-certain chance that any debate over immigration will be narrow in scope, and won’t be discussed in terms of income inequality, despite the obvious overlap between the two issues.
Proponents of comprehensive reform, as outlined in the Gang of Eight legislation, have largely succeeded in framing the debate as a question of whether to give illegal immigrants a pathway to citizenship. The mainstream media have unflinchingly followed suit; a Politico article on Tuesday, for example, pits “proponents of an immigration rewrite” against “lawmakers opposed to any measure that could be seen as providing amnesty to millions of immigrants living in the United States illegally.”
Reporters, pollsters, and pundits have shown little interest in any other aspect of reform, such as legal immigration (high-skilled versus low-skilled) and the guest-worker program, which would be expanded under the Gang of Eight legislation. These issues are among the most relevant to the debate over income inequality and most likely to affect the daily lives of American workers. Apart from Senator Jeff Sessions (R., Ala.) and a handful of others, few lawmakers seem eager to have that discussion.
According to the Congressional Budget Office (CBO), the Gang of Eight’s proposal would over the next ten years admit more than half again as many legal immigrants, 38 million, as the number projected under current law, 22 million. Many of these new immigrants would fall under the category of “unskilled” labor, thereby adding to the ranks of the working population hardest hit by the economic downturn of the past several years. As a result of this “influx” of new, unskilled (legal) immigrants, average wages for American workers would fall, the CBO projects, and the unemployment rate would rise over the next decade.
Of course, it’s unlikely that most Americans are aware of this aspect of the Gang’s proposal, given the media’s exclusive focus on the path-to-citizenship question. Mainstream polling hasn’t even tried to gauge public support for a massive increase in unskilled immigration, but a National Journal survey in June found that most Americans are disinclined to support an increase in high-skilled immigration. More than 70 percent of respondents said the number of visas for high-skilled immigrants should be either decreased or maintained at current levels, compared with 22 percent who favored an increase.
As Congress debates whether to extend emergency unemployment benefits and how to pay for them, it’s worth noting that the CBO also projects that, under the Gang of Eight legislation, between 100,000 and 200,000 more people would collect unemployment benefits each year over the period 2015–23, at a cost of more than $5 billion.
This is one of many examples of the disconnect between President Obama’s effort to reduce income inequality and unemployment and his support for immigration reforms that would directly affect low-skilled, low-wage American workers in a negative way. White House adviser Gene Sperling laments that “our economy still has three people looking for every job [opening],” while the administration calls for an immigration bill projected to increase unemployment.
Meanwhile, businesses have spent millions backing comprehensive reform, even as they lay off thousands of workers. While President Obama complains about the disproportionate success of wealthy CEOs, he supports their push to bring in cheap unskilled labor via the immigration system. After all, some American workers just “can’t cut it,” in the words of an unnamed aide to Senator Marco Rubio (R., Fla.).
Apart from Senator Bernie Sanders (I., Vt.), a self-described socialist, the Left has shown almost no hesitation about being allied with the Chamber of Commerce on the issue of immigration reform. In fact, the Chamber is currently one of the most outspoken advocates of comprehensive reform, having pledged to “pull out all the stops” to get a result this year. K Street is gearing up for another push. Liberals, who are traditionally skeptical of Big Business interests, have not questioned the Chamber’s motives but are quick to point to its support as evidence of the bipartisan coalition backing immigration reform.
There was a time a when Democrats were unwilling to support measures that would increase unskilled and temporary immigration to the United States, because doing so would “exert downward pressure on wages at a time when we are already losing our middle class,” in the words of Senator Barbara Boxer (D., Calif.), speaking in opposition to George W. Bush’s immigration-reform effort in 2007. There was a time when even the New York Times editorial board worried that amnesty for illegal immigrants “would depress the wages of its lowest-paid native-born workers.”
These bygone concerns are not without evidence to back them up. George Borjas, a professor at the Harvard Kennedy School, where he specializes in labor economics and immigration issues, has estimated that current immigration policy, on net, reduces the wages of U.S. workers in competition with immigrants by $400 billion a year, while it increases the profits of business owners employing immigrant labor by roughly the same amount ($437 billion). Low-skilled workers and African Americans are among the primary victims of this trend.
In light of all this, continuing to push for Gang of Eight–style immigration reform while simultaneously condemning the scourge of income inequality ought to give Democrats some pause. At the very least, it could prompt a broader discussion about immigration reform that isn’t singularly focused on a pathway to citizenship for illegal immigrants. But it won’t.