Greenspan Backs Increase in Foreign Skilled Workers
By Fawn Johnson
The Wall Street Journal, April 30, 2009
Washington, DC — Former Federal Reserve Chairman Alan Greenspan said Thursday that increasing skilled foreign workers in the U.S. could mollify housing-price declines that have caused 'the plunge in the value of the vast quantity of U.S. mortgage-based securities.'
If the U.S. were to open its doors more widely to skilled foreign workers, those employees would bring their families to the country and move into vacant housing units, 'the current glut of which is depressing prices of American homes,' Mr. Greenspan said at a Senate Judiciary Immigration Subcommittee hearing.
The number of available temporary visas for highly skilled workers is 'far too small to meet the need, especially in the near future as the economy copes with the forthcoming retirement wave of skilled baby boomers,' Mr. Greenspan said.
'Greatly expanding quotas for highly skilled workers would lower wage premiums of skilled over lesser skilled,' Mr. Greenspan said. Current skill shortages in the U.S. create a 'privileged elite' with noncompetitive high incomes. Those skill shortages exist because 'we are shielding our skilled labor force from world competition,' he said.
Mr. Greenspan said a separate group of workers, illegal immigrants, have made a 'significant contribution' to the country's economic growth. He called for a temporary-worker program that could make use of that work force in a legal fashion.
Unions are wary of increasing temporary visas for skilled or unskilled labor. Service Employees International Union Vice President Eliseo Medina said in testimony that temporary-worker programs create a 'caste worker system' that depresses wages.
From 2000 to 2007, unauthorized workers accounted for more than one-sixth of the increase in total civilian labor force, according to Mr. Greenspan. The unauthorized work force decreased last year as the economy slowed, but illegal workers still comprise 5% of the total civilian labor force.
'Unauthorized immigrants serve as a flexible component of our work force, often a safety valve when demand is pressing and among the first to be discharged when the economy falters,' Mr. Greenspan said.
Unskilled illegal workers marginally suppress wage levels of native-born Americans without high-school diplomas, Mr. Greenspan said. Undocumented workers also impose significant costs on some state and local governments.
Mr. Greenspan said those costs are relatively small compared with the economic benefits of undocumented workers.
Thursday's Senate hearing, the first in a series, comes on the heels of President Barack Obama's comments Wednesday night saying he would form a working group with congressional leaders to shape legislation to overhaul immigration policies. In the meantime, Mr. Obama said the administration would take seriously 'the violations of companies that sometimes are actively recruiting these workers to come in.'
When he was in the Senate, Mr. Obama was involved in intense immigration negotiations led by Sens. Edward Kennedy (D., Mass.) and John McCain (R., Ariz.), as well as members of the Bush administration. A compromise measure that would have given illegal immigrants a way to earn citizenship failed in the Senate after a number of Republicans defected.
At Thursday's hearing, Subcommittee Chairman Charles Schumer (D., N.Y.) said 57% of Americans believe immigration should be a high priority for Congress. 'The politics may be hard, but the reality is obvious. It is everyone's best interests to change and fix our current immigration system.'