In recent days, the debate over immigration policies have raced ahead amid charges of racism, amnesty, an impending government funding deadline, and the March 5 expiration of DACA (Deferred Action for Childhood Arrivals), even grinding government to a halt. Remarkably, a group of republican Senators, led by Lindsey Graham, wish to capitulate to democrat demands, granting a path to citizenship for 3 million illegal immigrants, give their parents work permits, and in exchange, republicans would merely get $2.7 billion for border security, a pittance, and only modest changes to our legal immigration system.
Such a policy will give millions amnesty without taking actions to ensure we don’t face a flood of illegal immigrants again in 25 years, repeating Ronald Reagan’s 1986 immigration mistake, granting amnesty now for border security that never materializes. If Americans wanted blanket amnesty, we had ample opportunity with the candidacies of Jeb Bush, Marco Rubio, and Hillary Clinton. Donald Trump staked out the only law-enforcement, citizen-minded immigration policies, and he won. To capitulate now is to ignore the message voters sent in 2016. DACA is the only bargaining chip Trump and republicans have; they must use it to reform a legal immigration system that has hurt working American citizens.
Since 1999, real median household income is up less than 1% to about $59,000. Working people have suffered two lost decades even as the rich get richer. A major reason why is the surge in immigration. America is now home to over 45 million immigrants, compared to less than 20 million in 1990. Over 13% of our population is foreign born, the highest level since before World War I. It has been steadily increasing since hitting 5% in 1970.
Historically, our immigration intake has been cyclical, which is to say we take in a large number of immigrants, and then slow down the intake as we assimilate them into our culture. As that process ends, we let immigration levels rise again, a process that has worked well. That pattern played out in the 1900s with high immigration levels through World War I, which we then slowed through 1970 (a period where coincidentally the modern American middle class was built), and which subsequently have been rising. With immigrant levels at a century high, we have to decide whether to let this uptrend continue or slow immigration as the RAISE Act would do.
Just from an economic perspective, the data argues for slower immigration. During the immigrant boom of the past twenty years, the middle class hasn’t enjoyed any real wage gains. We recognize the laws of supply and demand in almost everything but immigration. When supply goes up, prices go down. Immigration increases the supply of labor, driving the price lower. This is great for business owners who employ laborers (hence why the corporatist GOP establishment favors ever more immigration), but bad for wage-earners. If America had a sustained labor shortage, that would call for more immigration, but if anything, we’ve suffered from an excess of labor.
Over the past 20 years, the unemployment rate has averaged 5.9%. The Federal Reserve estimates the unemployment rate consistent with a full labor market is 4.6%. In other words, for the past two decades, America has had a structurally loose jobs market with 1.8 million Americans unnecessarily unemployed on average. During this time, the flow of immigrants has continued unabated. It’s no wonder wages have barely budged. We are doing a bad job getting the people already here employed; there’s no need to keep bringing in a record number of new people too.
Even today with the unemployment rate at 4.1% and talk of a tight labor market, fewer Americans under the age of 55 are working than in 2000, even though the population of 25 to 54 year olds has grown over 5 million. While the labor force participation rate among prime working age adults is at or near highs in nations like Germany and Japan, ours is well below last decade’s level. Not to mention after years of loose jobs markets that benefited employers, America’s workers will benefit from a prolonged period of tight employment where businesses are competing for workers, forced to raise wages. In a tight labor market, businesses would have to train American citizens, improving their potential earnings, rather than import skilled labor and let American citizens form an underclass. Considering their lower median earnings and higher unemployment rates, African-American and Hispanic-Americans would disproportionately benefit from a tight labor market policy, making the charges of racism from immigration expansionists all the more laughable.
After two lost decades for America’s working people, now is the time to slow immigration and let citizen wages rise. If Republicans and Trump truly want to listen to their base and help the forgotten men and women, they can’t capitulate to amnesty for millions of “dreamers,” and must negotiate lower legal immigration levels to make the dreams of America’s citizens more attainable. If they can’t hold this line, what was the point of the 2016 election?