Monday, May 21, 2007

Immigration bill details

I'm sure the specifics of the immigration legislation working its way through Congress will be in a state of constant flux, but the latest version is relatively well described by the Washington Post here.

The most remarkable provision is the requirement that the 12 million estimated undocumented immigrants up and return to their home countries in order to pursue citizenship legally. Talk about a jarring change, both to those individuals and their families, many of whom may be in the U.S. legally already; but also to the domestic economy.

There are about 9.3 million native-born workers and about 6 million foreign-born workers without a high-school degree, according to statistics compiled in a CIS report by Steven Camarota. If illegals comprise 50% of that figure, or about 3 million workers, then requiring them to return home would reduce the domestic unskilled labor force by 20 percent.

The good news would be that unskilled native workers and legal immigrants would see higher wages, perhaps as much as 6 percent higher if the elasticity is 0.3. But domestic consumers should be prepared to pay higher prices and possibly face shortages.