Immigration Harms American Workers (New Report)–What Is It Doing To Canadian Workers?
Americans Lose $68 Billion a Year from Immigration
Study Examines Harm to American Workers
WASHINGTON (February 24, 2005) Using a new approach, Columbia University economists David Weinstein and Donald Davis estimate the net economic losses from immigration to Americans. Unlike earlier studies, this new model does not treat the movement of immigrant labor into the country simply as a result of abundant resources and demand for labor, assumptions more appropriate to the 19th century. Rather, the model takes into account globalization, the technological superiority of the American economy, and the resulting high standard of living.
The Center for Immigration Studies Backgrounder, United States Technological Superiority and the Losses from Migration, is on line at http://www.cis.org/articles/2005/back205.html . Among the reports findings:
* In 2002, the net loss to U.S. natives from immigration was $68 billion.
* This $68 billion annual loss represents a $14 billion increase just since 1998. As the size of the immigrant population has continued to increase, so has the loss.
* The decline in wages is relative to the price of goods and services, so the study takes into account any change in consumer prices brought about by immigration.
* The negative effect comes from increases in the supply of labor, and not the legal (or illegal) status of immigrants.
* While natives lose from immigration, the findings show that immigrants themselves benefit substantially by coming to America.
* Those who remain behind in their home countries also benefit from the migration of their countrymen.
About the Authors: Donald R. Davis and David E. Weinstein are both professors of economics at Columbia University, as well as Research Associates at the National Bureau of Economic Research (NBER). Both authors are recognized as among the nations leading experts in international economics. This paper updates a June 2002 NBER working paper entitled Technological Superiority and the Losses from Migration. The NBER is one of the nations leading economic research institutions. For those wishing a much more detailed and technical explanation than the one presented here please see the NBER paper at http://www.columbia.edu/~drd28/Migration.pdf .
Harvard Economist George Borjas, who is generally recognized as the nations leading immigration economist, stated Weinstein and Davis work represents an important new approach for calculating the net benefits accruing to the United States from immigration. As in earlier calculations, immigration does not create substantial net economic benefits for native-born Americans. In fact, Weinstein and Davis conclude that the effect on natives may be both large and negative.
Methodology: The model used in this study can be summarized as follows: High U.S. productivity motivates the entry of foreign workers and capital. As a consequence, the movement of foreign labor and capital into the United States expands U.S. exports and reduces exports by foreign countries, which now have fewer workers and less capital. This depresses the prices of U.S. exports while raising the price of its imports, which is bad for U.S. natives.
While the addition of immigrant workers makes the overall U.S. economy larger, natives in the United States are worse off because immigrants take not just the increase in income, but other income as well. This is because American workers are now competing with foreign workers who, because they have entered the United States, now have access to superior American technology, which is the primary source of American workers competitive advantage in the international economy. In other words, American workers are better off competing with foreigners if the foreign workers stay in their own countries and dont have access to American technology. By allowing the foreign workers into the United States, Americans face competition with foreigners equipped with American technology.
Policy Discussion: The authors do not make any specific policy recommendations. They point out that non-economic factors should also be considered when formulating immigration policy. However, if the well-being of natives is a primary concern, then lawmakers may wish to consider the negative economic effects on native-born Americans.
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Contact: Steven Camarota
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The Washington Times story on the report is here:
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