In-Depth Notes on Immigration Economics by George Borjas

George Borjas, a recognized expert on immigration economics from Harvard's Kennedy School of Government, delivered a compelling talk titled "Making It Worse: How the US Government Has Tackled the Immigration Problem Wrongly" at UCSD. He began by expressing gratitude to his hosts and shared an anecdote from a historical meeting between President Jimmy Carter and China’s Deng Xiaoping, highlighting fundamental questions about immigration policy: namely, how many immigrants should the US admit and from which origins? These questions are crucial, given the overwhelming number of individuals seeking to immigrate to the US.

Borjas detailed the historical evolution of US immigration policy, noting that prior to 1875, there were virtually no restrictions on immigration. The first significant immigration restrictions emerged in the late 19th century, primarily targeting specific groups based on ancestry and health status. By 1924, the National Origins Quota System established numerical limits and favored certain countries over others, which lasted until a major policy shift in 1965 after the Civil Rights Movement. Since then, immigration policy has largely focused on family reunification, where most immigrants enter the US through family preference visas rather than employment-based criteria. He emphasized that this system has created a significant backlog and backlog of families, with projections suggesting that by the year 2200, virtually everyone in the world could qualify for immigration under the current family-based system.

Borjas highlighted the growing share of foreign-born workers in the US labor market, rising to nearly 15% as of 2005, particularly in states like California. He presented data illustrating substantial increases in immigration rates following policy changes, specifically noting a tripling of the proportion of immigrant workers within a short period. The concentration of immigration in specific states has significant implications for local labor markets, potentially leading to varying effects on wages.

The speaker then broached the contentious issue of immigration's economic impact, reflecting on the debate surrounding immigrant wages compared to those of native workers. He presented statistical comparisons that revealed a decline in wages for immigrant workers relative to natives over the decades, illustrating a significant downward trend. This trend raises questions about the competitiveness of immigrant labor and the broader impacts on native workers' wages, where a negative correlation between the two has emerged, especially among low-skilled workers.

Borjas pointed out the dual impacts of immigration: economic benefits for certain sectors, particularly employers and consumers, yet corresponding hardships for low-skilled native workers competing in the labor market. The estimated short-term loss in wages due to immigration indicates that the reduction is tangible, particularly within segments of the workforce that struggle with high levels of low-skilled immigrants, establishing a scenario of wealth redistribution rather than overall national economic expansion.

The issue of welfare is another critical aspect Borjas raised, referencing historical trends indicating a substantial gap between the percentage of immigrant and native households receiving assistance. Despite initial declines following the 1996 welfare reform, many immigrants subsequently requalified for benefits through naturalization, illustrating the complexities of welfare dynamics in immigration.

In summarizing the challenges with existing policy positions on immigration, Borjas criticized current proposals such as amnesty and guest worker programs, expressing concern that they might inadvertently exacerbate the immigration problem without addressing labor market needs. He rejected the idea that one-size-fits-all solutions would suffice and highlighted the importance of evolving policies that adapt to economic factors and changing demographics.

Finally, he conjectured that major shifts in immigration policy could likely only be triggered by significant events impacting national security, reiterating the need for a more skill-focused immigration policy that could enhance the economic prospects of current residents. He suggested looking to other countries, such as Canada, for effective models of immigration screening.

In closing, Borjas emphasized an essential economic principle: immigration policy has both costs and benefits, and understanding the balance of these impacts is vital for shaping effective policy going forward. He urged for a more nuanced debate centered around the goals of immigration policy in the US, focusing on who we want to welcome into the country and what we hope to achieve through our immigration systems.