Immigration and the Economy

by Ramesh Ponnuru

George Will writes in favor of “immigration reform” today. Most of the column is devoted to responding to conservative arguments against the type of legislation that’s usually described with those words. He makes one positive argument in favor of such legislation: It would be good for the economy. This sentence is the core of his case: “The Congressional Budget Office says an initial slight reduction of low wages (0.1 percent in a decade) will be followed by increased economic growth partly attributable to immigrants.” I wrote about this question a few months ago:

The CBO does not tell us what we would want to know to do a full evaluation of the bill’s economics. It says that in 20 years, per capita gross national product would be 0.2 percent higher if the bill passed than it would be otherwise (a number in line with earlier studies).

It says that downward pressure on wages would be concentrated at the top and bottom of the wage scale. But it does not break down the numbers so that we can see the impact on people who are already living here, rather than on aggregates that include newcomers. What would the bill mean for native-born Americans working low-wage jobs? What would it mean for legal immigrants already here in 2013 in the same position? The CBO does not answer those questions.

And while a 0.2 percent increase in per-capita GDP would be nice, it is not an argument-stopper: Legislation that brought such an increase about could easily have downsides that made it not worth doing; and that economic upside is so trivial that such legislation would have to be pretty far down in any reasonable agenda to promote growth. Finally, if we want an immigration policy geared toward higher economic growth, I suspect it would tilt far more in the direction of high-skilled immigration than the legislation before Congress does.

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