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Immigration reform needs consensus on flow of foreign labor

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A bipartisan reform effort shaping up in the Senate includes future foreign workers. For this piece of the package to work, it must adhere to the following three broad principles.

Incentives for legal immigration

First, both employers and potential immigrants need much stronger incentives to engage in legal rather than illegal immigration.

For employers, there must be sufficient numbers of legal immigrants available to them, and at wages roughly consistent with US market realities. For incoming workers, it should mean that legal status allows them to switch jobs when opportunities arise, and to apply for permanent residence and eventual citizenship. Thus, they aren’t trapped in exploitative working conditions, and employers are motivated to adhere to reasonable workplace standards.

Competing needs

Second, the competing needs of workers who are already US citizens, employers, and the economy must also be recognized.

There is little controversy now over the notion that the US economy will benefit from permanently attracting more highly educated immigrants or keep immigrants educated in the US. Those workers will start businesses, pursue patents, and power the technology sector. But strong disagreements remain over immigration at other parts of the skill spectrum, especially at the bottom.

After studying a large body of economic research and literature, I’ve concluded that less-educated immigrants do indeed compete with the least-skilled American workers, particularly males, and especially when unemployment is high (like right now). But the overall harm on American workers is minimal.

Over time, the negative impact of such immigrants on the employment and earnings of Americans is quite modest. This is especially true in low-wage industries (like agriculture, restaurants, and hotels) where Americans have little interest in working, even if wages rise somewhat; or in those sectors where the supply of skilled workers is perpetually low, as in nursing. And as baby boomers begin to retire in larger numbers, the effects of this competition should grow even weaker.

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