Spotlight Exclusives

The Impact of Immigration Reform on Low-Income Workers

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Last month, in the absence of the passage of immigration reform by Congress, President Obama announced a series of executive actions to address America۪s immigration enforcement policies. While the executive actions are significant in and of themselves, President Obama as well as many lawmakers from both parties hopes comprehensive change will come through legislative action. A crucial, and hotly debated, topic is what such changes would mean for low-income workers.

While comprehensive reform appears unlikely in the immediate future, any final legislation could bear resemblance to or include language from the 2013 Senate۪s “Gang of Eight” bill. The G8 bill, which passed in the Senate but was not put to a vote in the House, would enhance border security, allow for increased low- and high-skilled immigration, and open paths to citizenship for undocumented immigrants who can pass background checks and meet income thresholds.

What would passage of a bill that allows millions of immigrants to lawfully work mean for low-income workers? The question is a difficult one to fully parse out.

Such legislation would undoubtedly be beneficial to current undocumented immigrants, many of whom are already working in very low-wage jobs as well as individuals allowed to immigrate legally to the U.S. under the new rules. However, some experts believe it might also improve the well-being of low-income citizens already residing in the country.

A 2014 paper by the Manhattan Institute concludes that more immigration boosts economic growth by increasing entrepreneurism and filling labor gaps in the U.S. economy. And a 2013 Center for American Progress paper specifically highlights how immigration is needed to fill the gaps in the workforce created by the retirement of Baby Boomers.

The positive benefits of immigration also led the Congressional Budget Office to estimate that “average wages would be higher under the [G8] bill than under current law for workers in all quintiles of the skill distribution.”

Research by Heidi Shierholz, formerly of the Economic Policy Institute, argues that recent immigration has “generally had modest positive effects” on the wages of U.S.-born workers. This is in part, Shierholz explains, because immigrants are often not direct substitutes for native-born workers. And in some cases, an influx of foreign-born workers can make low-skill workers with English skills more valuable. Although Shierholz۪s research suggests that they tend to depress wages for other foreign-born workers already in the country.

However, some critics argue against legislation that would increase low-skill immigration, citing a negative impact on wages and economic opportunity. While praising the bill۪s increase in high-skilled immigration, Yuval Levin laments that low-income workers who have been hit especially hard by globalization will be put into further competition with new immigrants. “A huge amount of American social policy is directed to reducing the number of people in our country who have low levels of skills and education, and it would be bizarre to use our immigration policy to increase that number significantly,” he adds.

Though there are many different perspectives on how immigration reform would affect low-income Americans, changes to immigration law will undoubtedly reshape America’s economic landscape. Spotlight will continue to track the effects of policy change on low-income workers as debate over immigration policy advances.

Posted by Riley
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