Immigration and wages: current immigration policy is costing Americans both dollars spent on social services and lowered wage rates. A wiser policy, on the contrary, would benefit workers.(IMMIGRATION)

In 2004, economist Todd G. Buchholz--author of the book New Ideas from Dead Economists--published a new book, this time about the loss of jobs in America. In Bringing the Jobs Home, Buchholz pointed out that immigration can either be a blessing or a curse to a nation and that it is up to policymakers to structure immigration laws in such a way as to help rather than hurt the nation. Sad to say, Buchholz observes that current U.S. policy hurts the nation.

At present, U.S. immigration policy turns away many skilled workers who ardently desire to enter America legally to begin new lives. Meanwhile, though official policy prohibits the immigration of undocumented workers, millions, often with low levels of education and few skills, have entered the United States illegally and have been allowed to stay. Not only have the American people incurred substantial costs in the form of social-services payouts as a result, but the arrival of so many unskilled laborers has cost American citizens wages and jobs.

Immigration Options

According to Buchholz, absent the H1-B visa program, which is a special case liable to abuse, a sane immigration policy would attract skilled, highly educated immigrants and limit or prevent the mass immigration of unskilled laborers. Instead, in his opinion, current policy makes two mistakes. "First," he writes, "we do too little to entice skilled people to come to the United States. Second, we actually chase away smart people who could add to our national culture, national spirit, and, yes, national wealth."

The cost of these mistakes to the nation is substantial. Not only do we give up the benefits associated with the arrival of highly skilled and educated people, we currently absorb the hefty costs that come with the arrival of the unskilled. According Buchholz, "a college educated immigrant who shows up on our shores delivers a +$198,000 impact on our fiscal picture" because he or she pays taxes but does not consume entitlement dollars disbursed by the state "for their birth, early health care or schooling."

Moreover, they create jobs. According to Buchholz, "educated immigrants are more entrepreneurial and far more likely to create new jobs than cost old ones." To support his argument he points to Hungarian immigrant Grf Andrs, the scientist who, better known as Andy Grove, helped build Intel into a world leader in the semiconductor industry. "If not for Andy Grove," Buchholz notes, "there might not be an INTEL INSIDE sticker on your computer, and America's dominance of advanced semiconductors might have flickered and displayed a FATAL ERROR message."

On the other side of the coin, mass immigration of unskilled labor brings high costs to society while also depressing wages. An immigrant "with less than a high school education costs other taxpayers about $13,000," Buchholz points out. Meanwhile, they drive down wages for existing citizens "by about 1 percentage point to 3 percentage points."