Re: Immigration and Wages

by Ramesh Ponnuru

Douglas Holtz-Eakin mentions that Sen. Sessions has expressed concern about the impact of the immigration bill on the “working class,” and then responds in terms of national aggregates and the “middle class.” I suspect that what Senator Sessions has in mind is the impact on current legal residents of this country on the low end of the income scale. The CBO report does not attempt to estimate what impact the bill will have on their wages, although it does say that wage pressure from the bill will be concentrated at the low and high ends of the scale.

CBO did attempt to make an estimate during the 2006 version of this debate. Its conclusion:

the analysis suggests that the average weekly wages of workers [already in the U.S.] who had not completed high school (about 12 percent of all adults employed last year) would be about 4 percent lower, while the average wages of workers with at least a high school education would be about 0.4 percent lower. With complete adjustment by capital, there would be no impact on overall wages; the average wages of workers without a high school diploma would be lower; those of other workers would be higher.

That estimate may be wrong or outdated, of course, but at least it is actually relevant to what opponents of the legislation Holtz-Eakin calls “reform” are worried about.

P.S. Holtz-Eakin writes, ”In a globalized economy, labor competition is already fierce; it doesn’t change a thing when a worker moves across the street, state, or even the sea. One would expect the impact to be essentially zero.” What about services?

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