On August 2, the White House unveiled a plan to make drastic cuts to legal immigration, reigniting a debate about the net effects of US immigration policy on jobs and the country’s economy. CGD experts—including Lant Pritchett, Michael Clemens, and Gaurav Khanna—have written and researched extensively on this hot topic, and have been quoted widely in recent media coverage. In this blog post I wanted to give you a flavor of what the evidence that we’ve been examining says. Spoiler alert: immigration has an overwhelmingly net positive effect on the US economy.
Michael Clemens and Gaurav Khanna approach the subject from different perspectives. While Khanna, whose latest paper is out this week, focuses on the impact of high skill immigration through the H-1B visa scheme, Clemens has written extensively about the impacts of low-skill immigration, drawing on wage data following large influxes and outflows of Mexican and Cuban workers in past decades. Clemens notes that “economic research time and again has shown that drastic cuts to legal immigration would be a lose-lose proposal for both the United States and global economy.” This past week, Clemens continued to highlight the economic impacts of this proposed policy, drawing on fact-based evidence and his own research.
Here’s an excerpt from his recent interview with Vox:
Sean Illing: If you're not familiar with the data, it seems intuitively right to argue that allowing low-skilled immigrants into the country means low-skilled American workers will have fewer opportunities. Why is that wrong?
Michael Clemens: American history shows without a doubt that more low-skill workers doesn’t mean fewer jobs. The American economy and the jobs it creates were built by low-skill workers. As recently as 1940, the fraction of European immigrants to the US who had no high school degree was 88 percent. That includes at least one grandparent of more than 40 percent of Americans, and those people fueled modern economic growth in this country. So something’s wildly wrong with the notion that low-skill workers have harmed American workers.
It is indeed intuitive to people that when there are more workers around, wages drop. But that’s a bad cartoon of how complex the economy is. I think it’s also intuitive to people that workers and firms adjust to changes in the labor supply in myriad ways. US workers respond to there being more workers around by moving to where there’s more opportunity, by going into business for themselves, and by specializing in tasks that use their strengths, like native English ability.
Women in the US respond to the presence of low-skill immigrants by entering the labor force, because immigrants make child care and elder care more accessible. Firms respond to there being more workers around by shifting toward production technologies that use labor more intensively, by moving plants from one place to another, and by producing in new ways that allow natives and immigrants to specialize in different tasks.
These complex adjustments are very intuitive to Americans out there who depend on low-skill immigrants caring for their kids, preparing food in kitchens, guarding buildings, shipping fresh vegetables. So I think when people stop to think about it, the “intuitive” thing is that immigrants fuel the US economy overall, creating more opportunity for US workers than the jobs that they take themselves. And that has been true for many, many generations in this country.
For additional coverage and information on this issue, and on Michael Clemens’ policy proposal, check out these links: