No, More Immigration Won't Make You Poorer (Unless You're an Immigrant)

By Jordan Weissmann

With Congress and the president diving into the immigration reform debate this week, we can expect a little fear-mongering about cheap migrant workers stealing American jobs and holding down wages. So every time you hear some talking point along those lines, remember this handy little chart from the Hamilton Project at Brookings. It show that immigrants might make most American workers a bit richer in the long run.  

The graph covers the impact of immigration between 1990 to 2006, when our country's Mexican population soared. The purple bars are drawn from an economic model crafted by George Borjas and Lawrence Katz, while the light blue ones come from the work of Gianmarco Ottoviano and Giovani Peri. Both suggest that, over the long term, workers should see their wages rise modestly thanks to all the new arrivals. The major difference is that the Borjas-Katz model finds that wages shrink for college graduates and high school dropouts. 

Hamilton_Effect_of_Immigration_on_Wages_EDITED.png


The differences between these estimates are a bit, well, academic.* But what's important to know is that while they represent the two opposing sides of the debate, they ultimately agree more than disagree. In the short-run predictions, which aren't included on the graph, both models show wages falling almost across the board. But for most American workers, having more immigrants in the economy turns into a net plus as time goes by. 

At least, that's the case for native born American workers. I pulled together this graph from the same table the Hamilton Project's researchers used to compile theirs. It shows that the arrival of more foreign labor from 1990 to 2006 probably cut into the earnings of immigrants who are already here. 

Immigration_Wages_Foreign_Born_Edited.PNG

The only people who clearly lose from more immigration appear to be other immigrants. 
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*To put it briefly, Borjas andKatz take a very narrow view of how immigrants affect wages, treating them mostly as direct competitors with American-born workers. Ottaviano and Peri try to factor in the way immigrants contribute to the overall economy, and how their presence might lead to better job opportunities for the native-born work force. 

This article available online at:

http://www.theatlantic.com/business/archive/2013/01/no-more-immigration-wont-make-you-poorer-unless-youre-an-immigrant/272680/