Thursday, May 24, 2007

Immigration, skills, and competition

Tom Friedman's Wednesday column expressed the view that Ph.D graduates and other highly educated immigrants on student visas should automatically get green cards.

It seems easy to agree with this view, but the naturalization of high-skill immigrants has an economic impact with winners and losers, just like immigration consisting of low-skill workers.

Why is it easier to agree with Friedman? The people who compete with immigrants who have Ph.D's are natives with Ph.D's. As a member of the latter group, I can tell you that there are many foreign-born professors with whom I am "competing."

But I'm in favor of immigration, and I think granting citizenship to more Ph.D recipients would be a good thing. Is that because I have certain political views or come from a particular background, or is it because I think my well-being is more insulated from competition in the labor market?

It seems to me that a key stumbling block impeding immigration reform must be the exposure to the downside of labor market risk --- losing your job --- that is disproportionately felt by domestic unskilled workers.

Tuesday, May 22, 2007

More details about immigration bill emerge

I wish I knew a canonical source for this. Maybe that's no accident; the Senate's job is probably easier without full disclosure of the draft bill's contents!

Something that really struck me about reporting today was the plan to provide 400,000 guest worker visas per year. That may not sound like a lot, but it's about what new illegal immigration is each year. That is, 400,000 more folks come without papers each year.

I think senators are right to be concerned that such a program, with required returns of 1 year in-between stays of 2 years, might really create a two-class society. But it seems to me that we already have something like that, by default.

To me, the most nebulous portion of all this is the terms of the "amnesty" (don't say that word too loudly) for the 12 million undocumented folks here already. David Brooks writes of "stiff fines" these people would face. Many undocumented immigrants already pay taxes, so it's hard to know what these fines might be. It's still unclear to me whether illegals currently in the country would have to return home or what.

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.