Paul Krugman on immigration reform

The New York Times columnist and economist Paul Krugram, expresses today deep his caution on immigration reform and a guest worker program. In “North of the Border,” he writes that a guest worker program will likely have the effect of creating a formal sub-class of non-voting workers. Repeating some content some of my prior postings, Krugman writes:

First, the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1 percent.

Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration — especially immigration from Mexico. Because Mexican immigrants have much less education than the average U.S. worker, they increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans. The most authoritative recent study of this effect, by George Borjas and Lawrence Katz of Harvard, estimates that U.S. high school dropouts would earn as much as 8 percent more if it weren’t for Mexican immigration.

Krugman ends with these comments about Bush’s guest worker plan:

Meanwhile, Mr. Bush’s plan for a “guest worker” program is clearly designed by and for corporate interests, who’d love to have a low-wage work force that couldn’t vote. Not only is it deeply un-American; it does nothing to reduce the adverse effect of immigration on wages. And because guest workers would face the prospect of deportation after a few years, they would have no incentive to become integrated into our society.

What about a guest-worker program that includes a clearer route to citizenship? I’d still be careful. Whatever the bill’s intentions, it could all too easily end up having the same effect as the Bush plan in practice — that is, it could create a permanent underclass of disenfranchised workers.

We need to do something about immigration, and soon. But I’d rather see Congress fail to agree on anything this year than have it rush into ill-considered legislation that betrays our moral and democratic principles.

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