Immigration Policy to Blame for Stagnant Wages By U.S. REP. LAMAR SMITH During the boom years of the late 1990s, labor economists questioned why wages for American workers either stagnated or rose slower than expected given the economic expansion and the low unemployment rates. Paul Krugman of the Massachusetts Institute of Technology asked: How can we have such a low unemployment rate without an explosion of wages? One economist summed it up by stating, “I don't think anybody has a good answer.” That is, until now. The answer, as it often does when the question involves American workers, points to our dysfunctional immigration system. Last year, the Immigration and Naturalization Service estimated the resident illegal immigrant population in the United States to be 5 million. But the news then got worse. The Census Bureau earlier this year released its long-awaited figures for the population of the United States — 281 million people. This figure was 7 million higher than the bureau expected. Astounded demographic experts started looking for answers and soon reached a common consensus. Most of the 7 million “extra” people were illegal immigrants who entered the United States during the 1990s. So the real number of illegal immigrants residing in this country might be as high as 11 million. Apparently, an unprecedented wave of illegal migrants flooded the labor market in the 1990s. At the same time, the pressure on employers to raise the wages of American workers during an economic boom was strangely absent, especially for low-skilled workers. The widespread availability of illegal labor gave employers the means to keep wages down. Add to this our government's policy since 1990 of admitting almost 1 million legal immigrants a year — a third of whom do not have a high school education — and it seems clear that today's mass immigration of both legal and illegal low-skilled aliens has an adverse effect on low-skilled American workers, both native and immigrant. This conclusion should not come as a surprise. A series of recent studies all have documented the effects of our mass immigration policy: • The National Research Council of the National Academy of Sciences concluded that immigration was responsible for “about 44 percent of the total decline in relative wage of high school dropouts… between 1980 and 1994.” • The Rand Corp. reported that, in California, “the widening gap between the number of jobs available for noncollege-educated workers and the increasing number of new noncollege-educated immigrants signals growing competition for jobs and, hence, a further decline in relative earnings at the low end of the labor market.” • The U.S. Commission on Immigration Reform, chaired by the late Barbara Jordan, found that “immigration of unskilled immigrants comes at a cost to unskilled U.S. workers… ” • The Hudson Institute stated that “U.S. immigration policy serves primarily to increase the number of U.S. residents who lack even a high school degree. America must stop recruiting workers for jobs that do not exist or exist only at the lowest wages.” • The Brookings Institution reported that “immigration has had a marked adverse impact on the economic status of the least skilled U.S. workers… “ • The Center for Immigration Studies calculated that “immigration may reduce the wages of the average native in a low-skilled occupation by… $1,915 a year.” It concluded that “reducing the flow of less-skilled immigrants who enter each year would… create upward pressure on wages and benefits for the working poor, including immigrants already in the country.” What can Congress do to ensure a better life for present and future American workers? First, Congress should reform our legal immigration system to place greater emphasis on the educational level of prospective immigrants, as almost every other industrialized nation has done. This will relieve the pressure that low-skilled immigration places on struggling American workers. Second, Congress must work to remove illegal immigrants from the work force. Of course, this requires a strengthened Border Patrol. But it also requires removing the “job magnet.” The Immigration and Naturalization Service must discourage businesses from employing illegal immigrants. Because the Clinton administration largely abandoned this practice, illegal immigrants working in the United States now face almost no risk of being deported (unless they have committed a serious crime). Also, Congress should consider requiring all employers to check the identity of newly hired employees against federal databases. Today, worker verification efforts are a joke because illegal immigrants have easy access to cheap counterfeit documents. Third, Congress should consider the adverse effect any new guest-worker program would have on American workers. If we do move ahead with a program, it should be on a limited pilot basis so that its impact can be judged before it becomes a huge, permanent program that hurts American workers. Smith is a Republican congressman from San Antonio. *Published June 24, 2001, in the Houston Chronicle