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Monday, March 27, 2006

Paul Krugman: North of the Border

Paul Krugman says we need to face up to the facts on immigration:

North of the Border, Immigration Facts, by Paul Krugman, Commentary, NY Times: "Give me your tired, your poor, your huddled masses yearning to breathe free," wrote Emma Lazarus, in a poem that still puts a lump in my throat. I'm proud of America's immigrant history, and grateful that the door was open when my grandparents fled Russia.

In other words, I'm instinctively, emotionally pro-immigration. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration, and immigration from Mexico in particular. If people like me are going to respond effectively to anti-immigrant demagogues, we have to acknowledge those facts.

First, the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1 percent.

Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration — especially immigration from Mexico. Because Mexican immigrants have much less education ... they increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans. The most authoritative recent study ... by George Borjas and Lawrence Katz of Harvard, estimates that U.S. high school dropouts would earn as much as 8 percent more if it weren't for Mexican immigration.

That's why it's intellectually dishonest to say, as President Bush does, that immigrants do "jobs that Americans will not do." The willingness of Americans to do a job depends on how much that job pays — and the reason some jobs pay too little to attract native-born Americans is competition from poorly paid immigrants. Finally, ... our social safety net has more holes in it than it should — and low-skill immigrants threaten to unravel that safety net. ... Unfortunately, low-skill immigrants don't pay enough taxes to cover the cost of the benefits they receive. ...

We shouldn't exaggerate these problems. Mexican immigration, says the Borjas-Katz study, has played only a "modest role" in growing U.S. inequality. And ... the disastrous Medicare drug bill alone does far more to undermine ... our social insurance system than the whole burden of ... illegal immigrants. But modest problems are still real problems, and immigration is becoming a major political issue. What are we going to do about it?

Realistically, we'll need to reduce the inflow of low-skill immigrants. ... But the harsh anti-immigration legislation passed by the House... legislation that would, among other things, make it a criminal act to provide an illegal immigrant with medical care — is simply immoral.

Meanwhile, Mr. Bush's plan for a "guest worker" program is clearly designed by and for corporate interests, who'd love to have a low-wage work force that couldn't vote. Not only is it deeply un-American; it does nothing to reduce the adverse effect of immigration on wages. And because guest workers would face the prospect of deportation after a few years, they would have no incentive to become integrated into our society.

What about a guest-worker program that includes a clearer route to citizenship? I'd still be careful. ... it could all too easily ... create a permanent underclass of disenfranchised workers. We need to do something about immigration, and soon. But I'd rather see Congress fail to agree on anything this year than have it rush into ill-considered legislation that betrays our moral and democratic principles.

Previous (3/24) column: Paul Krugman: Letter to the Secretary
Follow up (3/27): Krugman's Money Talks: Notes on Immigration
Next (3/31) column: Paul Krugman: The Road to Dubai

    Posted by on Monday, March 27, 2006 at 12:15 AM in Economics, Policy, Politics, Unemployment | Permalink  TrackBack (0)  Comments (28)

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