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Sunday, July 14, 2013

Immigration, Work, and Wages

At The Daily Beast, Lloyd Green writes about the immigration debate:
The legislation crafted by New York Democrat Chuck Schumer and Florida Republican Marco Rubio looks to grow the economy by suppressing take-home pay for those workers least able to afford it. Under their bill, “average wages would be slightly lower than under current law through 2024,” according to the Congressional Budget Office. So American workers, who have been battered by three decades of wage stagnation and now by a recent payroll tax hike, are being asked to take still another decade for the team. Meanwhile, the stock market flirts with new records.
According to Harvard immigration expert George Borjas, immigration affects workers “primarily, but by no means exclusively, at the bottom end of the skill distribution, doing low-wage jobs that require modest levels of education.” As David Frum explained, “Whatever else you say about the U.S. economy of the 21st century, it cannot be described as suffering from labor shortages. Yet however little workers earn, there is always somebody who wishes they earned even less.” On Thursday, jobless claims rose to a two-month high.

Michael Lind of the New America Foundation zero-summed up the situation this way: “You can have a high-wage social democratic welfare state or you can have unlimited immigration—but you can’t have both.” With 116 million Americans holding full-time jobs, and more than 110 million Americans receiving food or disability benefits, Lind clearly has a point. Given these numbers, Republicans might cheer the collapse of the social democratic welfare state. The mystery is why Democrats seem to like it so much.