National Review Online, February 28, 2017
In a recent column for the New York Times David Brooks attacks a new bill by Republican senators Tom Cotton and David Perdue designed to reduce legal permanent immigration (green cards) from the current level of 10 million each decade to about 5 million. Brooks attacks Cotton and Perdue's main justification for their proposal: that the arrival of large numbers of less-educated immigrants reduces wages and job opportunities for less-educated natives and legal immigrants already here. There are other concerns as well with allowing in so many less-educated immigrants. But Brooks is convinced there is no job competition, and he ignores all the other problems created by the influx of less-educated immigrants.
Brooks cites a recent study by the National Academies of Sciences, which he claims shows that immigration does not reduce wages for American workers. Brooks mischaracterized the report's findings. Here is a nice summary of the report by Harvard's George Borjas, who is generally considered the nation's leading immigration economist and was on the panel that wrote the report. As professor Borjas's summary makes clear, there is in fact good evidence that immigration does have a significant negative impact on certain categories of workers, typically the least educated. It may be that in a labor force of 150 million persons the overall impact of immigration is small. But for groups like construction workers where immigrants are concentrated, it is likely much larger.
The oddest part of Brooks's piece is when he cites the National Association of Home Builders arguing there are 200,000 "unfilled construction jobs." He then argues that construction is hard work and he acknowledges wages have stagnated. He then just accepts the idea that "employers have apparently decided raising wages won't work." In Brooks's mind that just settles it. Employers do not want to raise wages; therefore we have to allow in as many foreign workers as businesses want.
There are so many problems with this way of thinking it is hard to know where to begin. While there could be short-term, localized exceptions, there is simply no economic reason to believe that persistent "shortages" (his word) in the supply of labor in a "booming" sector will not cause wages or benefits to increase. Unless of course we do what Brooks wants and bring in ever more foreign workers, increasing the supply of labor so employers do not have to increase pay or benefits.
It is true that higher wages might reduce profits or raise prices for consumers. But why is that intrinsically bad? After all, there is agreement among labor economists that those without a college education have done poorly in the labor market in recent decades. If things are finally tipping in their favor, at least in construction, why would we want to short-circuit the pressure to raise wages in a sector of the economy where Brooks himself observes wages have not grown?
His position is even more puzzling because Brooks himself worried just last September that our ever-changing modern economy does not value the skills of many working-class people. In another column he mentions "the disappearance of low-skill jobs" as contributing to income inequality. Yet when faced with a tight labor supply in a growing sector like construction — jobs typically done by the less-educated — he does not advocate higher wages to attract more Americans; instead, he wants wages to remain flat and the jobs to be filled by new foreign workers.
Brooks makes this argument partly because he believes construction is a job Americans simply don't want to do. He states, "Construction is hard, many families demean physical labor and construction is highly cyclical." So instead of arguing that we should allow wages to rise for those doing this hard, low-status, but socially useful work, we should keep wages stagnant and bring in workers from outside of the United States. I think few Americans would agree with this plan, but even more important, the very idea that there are jobs Americans don't want to do is wrong.
There are nearly 6 million native-born Americans working in construction in non-management positions, accounting for 73 percent of workers in this field. Among construction laborers, who are generally the least-skilled workers in the industry, 65 percent are U.S.-born. To say that construction is a job Americans do not want to do is like saying that an occupation overwhelmingly composed of women is a job women don't want to do. I think the reason people make this nonsensical argument is that they simply don't know that the vast majority of workers in almost every occupation in the United States are U.S. born.
The whole idea that there are no Americans to fill construction jobs is divorced from reality. In the third quarter of last year there were some 38 million native-born working-age (18 to 65) Americans without a bachelor's degree not working — either unemployed or out of the labor market altogether. There were also something like 5 million legal immigrants in the same boat. Roughly 14 million of those not working are ages 18 to 29, exactly the kinds of people who are often construction laborers.
Of course, some of those not working are in college (though I worked construction during college), and many of those not working would not or could not do construction work. No doubt, too, there is a work-ethic problem among some Americans. But it is ridiculous to suggest that given this enormous pool of potential workers we could not get 200,000 people to do construction jobs if employers were willing to pay and treat them properly. Furthermore, there are tens of millions of additional less-educated Americans working in other jobs who could be attracted to construction if the pay was right. Again, remember Brooks is arguing that employers have not even tried to raise wages.
A secondary argument Brooks makes is that immigration is a boon to the country generally. He cites the vibrancy of Houston as an example of the benefit of immigration and states, "I can't figure out why so many Republicans prefer a dying white America to a place like, say, Houston." In some ways Houston surely has benefited from immigration. But Brooks seems unaware of the very real problems immigration has created for Houston and for Texas.
Consider the impact on public schools. The 2015 American Community Survey shows that in the Houston area nearly one-third of public-school children from immigrant households live in poverty and they accounted for 53 percent of all students below the poverty line. It is also the case that 41 percent of public-school students in the Houston area now speak a foreign language at home. This has created enormous challenges for Houston-area schools.
Turning to the state of Texas as a whole, immigrants and their young children account for 24 percent of the total population but 34 percent of those in poverty and 40 percent of those without health insurance. Furthermore, in Texas 58 percent of immigrant households receive some form of welfare, compared with 34 percent of native households. Though Brooks does not mention it, the National Academies report he cites estimated the net fiscal drain (taxes paid minus services used) created by immigrants in Texas is $7.8 billion annually. Judging from the data, it is probably the case that very roughly half of this drain is from legal immigrants and half is from illegal immigrants.
Cotton and Perdue's bill tries to protect working-class Americans (including legal immigrants already here) and taxpayers by curtailing the number of less-educated immigrants allowed into the country in the future, mainly by limiting family immigration primarily to the spouses and minor children of U.S. citizens. America as a whole and cities like Houston would almost certainly benefit from such a policy.