High Unemployment Rates Frame the Immigration Debate

In the wake of President Obama's "jobs summit," the debate about how illegal immigration impacts unemployment has risen in volume. For Rep. Lamar Smith, R-Texas, the summit was fatally flawed because it did not directly address illegal immigration.

"Notably absent from the president’s jobs summit is any discussion of how to take back the 8 million jobs currently occupied by illegal immigrants and make them available to out-of-work U.S. citizens and legal immigrants," he wrote on Politico.com.

Rep. Smith, a fifth-generation Texan and a known Capitol Hill immigration hardliner, asked: “How can the administration justify giving millions of jobs to illegal immigrants when the economy is struggling with a 10 percent unemployment rate?”

He's right about the numbers. An estimated 5 percent of the U.S. labor force is made up of undocumented immigrants, meaning they hold 8 million jobs (that number's generally not disputed). But what's not so clear is how many of those positions are truly jobs Americans would compete for, at the wages offered, even with high unemployment.

Several studies suggest that among Americans and legal residents, it's mainly those lacking a high school diploma who are competing directly with undocumented immigrants for jobs (and by most estimates, that's less than one out of every 10 U.S. workers).

A 2006 study by Giovanni Peri, a professor of economics at the University of California, Davis, concluded that immigration actually benefits more educated U.S. workers by boosting overall productivity, resulting in wage increases for degree-holders.

A widely cited 2008 study by the Perryman Group for Americans for Immigration Reform, a business-led coalition, went even further. Deporting undocumented workers en masse -- the study calls the workers an "essential resource" -- would have the net result of erasing thousands of jobs permanently in many states, not to mention being a prohibitively expensive exercise.

Of course, that's cold comfort to millions of U.S. workers who lack a high school diploma and feel they are being undercut by undocumented foreign workers.

A study released this month by Gordon H. Hanson, of the University of California, San Diego and the National Bureau of Economic Research, cites an estimate that American high school dropouts lost 9 percent of their income over one recent 20-year period, due to illegal immigration.

But Hanson, who prepared his study for the nonpartisan Migration Policy Institute, also states that despite the controversy it generates, illegal immigration has no significant impact on the overall U.S. economy.

Hanson’s study doesn't gauge the effect of innovation (for example, new techniques undocumented immigrants may have introduced in construction). But it does account for most other relevant factors such as undocumented immigrants' contribution to GDP and tax revenue (a majority have payroll taxes deducted), as well as public monies they drain, mainly via public schooling and emergency room visits.

In the end, writes Hanson, "it's a wash."

In this Hanson coincides with Marcelo Suárez-Orozco, co-director of the immigration studies program at New York University, who said late last year, as the economy crumbled, that despite the evidence that proponents and critics of immigration pile on either side of the issue, the impact on the economy isn't as dramatic as either side would like to think.

For Hanson, the key question is how to create an immigration system that creates incentives against illegal immigration, channels foreign workers onto legal entry paths, and provides the U.S. labor market with all the unskilled labor it needs (particularly during an upswing), but with enough flexibility to decrease influxes when the labor market contracts, as it has in the last couple of years.

His answer is a visa program for unskilled foreign workers far larger and less restrictive than it is now.

The current visa regime allows in only a ludicrously low number of temporary unskilled workers, 150,000 at any given time by Hanson's count, a number dwarfed by the 8 million immigrants who are working here illegally.

The basic formula is to turn illegal immigrants into legal immigrants.

That might be accomplished through temporary worker programs that could be taxed, higher visa quotas, or a path to earned citizenship for the 12 million undocumented immigrants living in the country, or a combination of these tactics.

The conservative Heritage Foundation opposes giving citizenship to anyone who entered the country illegally, arguing that “amnesty” creates an incentive for future illegal immigration. However, Heritage still endorses providing “legal avenues that meet the needs of employers and immigrants.”

Congress last tried to pass immigration reform in 2007, at a time when unemployment levels were far lower than they are now. The legislation, which included higher quotas for foreign workers and a path to citizenship for the undocumented, foundered against many conservatives’ cries that it represented an immigration amnesty.

Rep. Luis Gutierrez, D-Ill., who has been drafting a sweeping immigration overhaul, has said that he is including language in the current bill that would limit visas for industries that have high unemployment, so American workers don't have to compete with foreigners. Immigrant labor would make it into niches of the economy where it's needed.

“We believe that every American should always have first crack at every job,” Gutierrez was quoted as saying in the Washington, D.C., political newspaper The Hill. “Having said that, where the opportunities exist, we need to sustain our economy. And so we need workers. Even in this very unstable economic situation we find ourselves in, there are still crabs that need to be picked, there are still onions going un-harvested. It’s just true.”

It may be true, but selling this complex vision to a job-hungry nation will be a challenge for Gutierrez and the Obama administration, which, with an eye on the Latino vote, promised action on immigration reform in 2010.

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