Drumming Up Evidence On Immigration`s Income Impact


[Previously by “An
Economist”:


Ten Reasons The Amnesty/Immigration Surge Bill Is
Appalling
]

Cleaning up after the Great

Amnesty/Immigration Surge
Battle: one unedifying
sight was

Kevin Drum
, the

liberal
Washington Monthly blogger, [send
him mail
] joining forces with the worst
corporate employers
in the America.

Drum

denounced
Slate blogger

Mickey Kaus
for "trying on his new role as
champion of the common man
” by trying to “convince
gullible liberals that the plight of the working poor
(i.e.,

chicken pluckers
) is due to immigration from Mexico
.” [See
Kaus`s

Plucking The Pluckers
] He accused Kaus of using
outdated, inaccurate material to support the claim.

Here`s a reality check.

Models that show minimal wage losses from unskilled
immigration are theoretical. The empirical data is
vastly different and shows huge losses from immigration.
Take the work of Giovanni Peri ("Immigrants`
Complementarieties and Native Wages”
, [PDF]).
He claims,

based on theory,
that immigration has raised wages
for even unskilled workers. However, his actual data
(Figure 3) shows a 17.6% reduction in wages for
unskilled workers in California and a 15.1% reduction
nationwide.

Of course, the California data seriously understates the
real reduction, because Peri uses a national cost of
living index rather than a Californian one. Allowing for
California`s much higher cost of living, the real wage
reduction is much greater.

Can Peri explain any of this? No. Does he try? No.

Other evidence:


  1. The Chain Never Stops
    ,

    by Eric Schlosser (Mother Jones, July/August
    2001 issue)

"Thirty years ago,
meatpacking was one of the highest-paid industrial jobs
in the United States, with one of the lowest turnover
rates. In the decades that followed the

1906
publication of

The Jungle
,
labor unions had slowly gained power
in the industry, winning their members good benefits,
decent working conditions, and a voice in the workplace.
Meatpacking jobs were dangerous and unpleasant, but
provided enough income for a solid, middle-class life.
There were sometimes waiting lists for these jobs. And
then, starting in the early 1960s, a company called Iowa
Beef Packers (IBP) began to revolutionize the industry,

opening plants in rural areas far from union
strongholds, recruiting immigrant workers from Mexico
,
introducing a new division of labor that eliminated the
need for skilled butchers, and ruthlessly battling
unions. By the late 1970s, meatpacking companies that
wanted to compete with

IBP
had to adopt its business methods—or go out of
business. Wages in the meatpacking industry soon fell by
as much as 50 percent. Today

meatpacking
is one of the nation`s

lowest-paid industrial jobs,
with one of the highest
turnover rates. The typical plant now hires an entirely
new workforce every year or so. There are no waiting
lists at these slaughterhouses today. Staff shortages
have become an industry-wide problem, making the work

even more dangerous."


  1. Lower Wages For American Workers
    , (Federation of
    American Immigration Reform website, updated 1/05)

"The effect of
immigration on those

low-skilled Americans
is profound, and the
government knows it: `Undoubtedly access to lower-wage
foreign workers has a depressing effect [on wages],`
says former Labor Secretary Robert Reich. Research
suggests that between 40 and 50 percent of wage-loss
among low-skilled Americans is due to the immigration of
low-skilled workers. Some

native workers
lose not just wages but their jobs
through immigrant competition. An estimated 1,880,000
American workers are

displaced
from their jobs every year by immigration;
the cost for providing

welfare and assistance to
these Americans is over
$15 billion a year
."


  1. Radical groups taking control of immigrant movement
    ,
    by Lou Dobbs (CNN, 5-1-2006)

"In fact, a
meat-packing job paid $19 an hour in 1980, but today
that same job pays closer to $9 an hour, according to
the Labor Department. That`s entirely consistent with
what we`ve been reporting—that

illegal aliens depress wages
for U.S. workers by as
much as $200 billion a year in addition to placing a
tremendous burden on hospitals, schools and other social
services
."


  1. Latinos Surge In Midwest
    ,
    (Rural
    Migration News,
    Vol. 3 No. 3, July 1996)

"Meatpacking wages
fell sharply after peaking in 1980. In Iowa, the average
hourly earnings of meatpackers in 1981 was $11.33, 50
cents less than the US average $11.83.

Wallace Huffman
of Iowa State University noted that
real meatpacking earnings fluctuated between 1963 and
1988, but were lower in 1988 than in 1963
."


  1. Choosing Sides on Immigration
    , by Froma Harrop (RealClearPolitics.com,
    6-5-07)

"And it`s true
that recent "victories" in unionizing low-skilled
workers have produced paltry gains. For example, the
Service Employees International Union managed to
organize

janitors in Los Angeles,
but Briggs notes, "at wages
way below what they were back in the 1970s." The strange
part is that Los Angeles` janitors were highly unionized
(and mostly African-American) until the `70s, when a
surge in illegal immigration destroyed their

bargaining power
.


The union last year
organized janitors in Houston. For all these efforts,
this largely Hispanic workforce saw its pay rise from a
pitiful $5.25 an hour to a pathetic $6.25 — which is
lower than the minimum wage in 21 states and the

District of Columbia.
Wages in the contract`s later
years will barely exceed the new federal minimum
."


  1. Immigration Policy and Low Wage Workers: The
    Influence of American Unionism
    (pdf), by Vernon
    M. Briggs, Jr. (Cornell University; Briggs Public
    Testimony)

"Following the
enactment of the first ceilings on immigration in U.S.
history, the economic gains to workers were found to be
immediate. Indeed, labor historian

Joseph Rayback
called the

Immigration Acts of 1921 and 1924
"the most
significant pieces of

"labor" legislation
enacted during the post-World
War I era.” Mills and Montgomery likewise observed "from
the international viewpoint the morality of the postwar
immigration policy of the United States may be
questioned, but of its economic effect in raising real
earnings there can be little question.” Lebergott, who
attributed this tripling of real wages for urban workers
that occurred in the 1920s to the substantial
immigration reductions that occurred in this period,
observed that "political changes in the supply of labor
can be more effective in determining wages than even
explicit attempts to fix wages.” What more powerful
statement can be made about the significance of the
adoption of reasonable immigration polices to the
enhancement of worker welfare in the united States?
"


  1. Dropping Out Immigrant Entry and Native Exit From
    the Labor Market, 2000-2005
    ,
    By Andrew Sum,
    Paul Harrington, and Ishwar Khatiwada (Center for
    Immigration Studies, September 2006). This is a
    paper on how immigration is driving American workers
    from the labor force.


  1. The Impact of New Immigrants on Young Native-Born
    Workers, 2000-2005
    . This is another paper on the
    same subject as #7.

Finally, let`s try the common sense approach. Why
exactly does corporate America relentlessly demand open
borders? Because they want 
more
Democratic voters
in the US? More

welfare costs
? More

crime
?

Not very likely. 

How about wages
that go down and down down?
Doesn`t that make a lot
more sense?

If

corporate America
knows in its heart that

mass immigration slashes wages
, why can`t Kevin Drum
figure it out?  

[E-mail

“An Economist”
]