As the debate over illegal immigration continues to rage, some pundits and policymakers are claiming that unauthorized immigrants do not pay taxes and rely heavily on government benefits. Neither of these claims is borne out by the facts. Undocumented men have work force participation rates that are higher than other workers, and all undocumented immigrants are ineligible for most government services, but pay taxes as workers, consumers, and residents.
A report released on June 20, 2007, by the Center for Immigration Studies (CIS) argues that the increase in the number of less-educated immigrant workers in Georgia between 2000 and 2006 causedemployment levels among less-educated natives to decline. However, there is no evidence of a direct, negative relationship between employment levels for immigrants and natives in Georgia.
The debate over how many immigrants should be permitted to enter the country each year under a new temporary worker program is clouded by a common misconception: that the greater the number of temporary workers admitted, the greater the downward pressure on the wages of native-born workers. However, this assumption is not supported by the facts.
A recent report from the Heritage Foundation is one in a long line of deeply flawed economic analyses which claim to estimate the contributions and "costs" of workers based solely on the amount of taxes they pay and the value of the public services they utilize.
New legislative proposals to drastically restrict family-based immigration practically ignore the social and economic benefits of the family-based admissions system for both immigrants and the native-born. Read more...
The United States possesses a number of competitive assets in the global war for talent: most notably, its huge and flexible labor market and an abundance of leading-edge multinational corporations and world-class universities. However, the United States also faces growing competition in the global labor market from other countries within the Organization for Economic Cooperation and Development (OECD), as well as from the expanding economic opportunities available in the home countries of Indian and Chinese professionals who constitute a vital talent pool for U.S. high-tech companies. These trends underscore the need to revamp U.S. immigration policies to make them more responsive to the demands of an increasingly competitive global economy.
Yet the quota-based immigration system of the United States diminishes the country’s ability to sustain, let alone expand, inflows of high-skilled immigrants. The optimal remedy for this defect in U.S. immigration policy is to replace the H1-B visa program for highly skilled foreign professionals with a quality-selective regime along the lines of the point-based systems introduced in Australia, Canada, and New Zealand. The United Kingdom is moving in this direction, away from a work-permit regime to a multi-tiered system that would entitle high-skilled immigrants to work for any British employer or to set up their own businesses in the country. However, the political environment in the United States—where homeland security concerns remain acute five years after September 11th and the furor over undocumented immigration clouds the separate issue of skilled immigration—provides little cause for optimism that such a policy reform will soon materialize.
One question that recently received heightened attention from lawmakers is whether or not immigrants should be admitted to the United States less on the basis of family ties and more on the basis of the skills they can contribute to the U.S. economy. Although some of the practices associated with a point-based immigration system might benefit the U.S. economy, policymakers should be careful not to assume that such a system would be a panacea for the widespread dysfunction of U.S. immigration policies.
A crucial question in the current debate over immigration is what impact immigrants have on the wages of native-born workers. At first glance, it might seem that the simple economics of supply and demand provides the answer: immigrants increase the supply of labor; hence they should decrease the wages of native workers. However, the issue is more complicated than this for two reasons that have been largely overlooked. First, immigrants and natives tend to differ in their educational attainment, skill sets, and occupations, and they perform jobs that often are interdependent. As a result, immigrants do not compete with the majority of natives for the same jobs. Rather, they “complement” the native-born workforce—which increases the productivity, and therefore the wages, of natives. Second, the addition of new workers to the labor force stimulates investment as entrepreneurs seize the opportunity to organize these new workers in productive ways that generate profits. When these two factors are included in the analysis of immigration and wages, it becomes clear that immigration has a positive effect on the wages of most native-born workers. Read more...