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Friday, November 21, 2014

Illegals get a pay raise, American workers get squeezed

Supporters gather during a rally organized by OneAmerica as part of a National Week of Action to demand robust executive measures to stop deportations and keep families together Thursday, Nov. 20, 2014, in Seattle. President Barack Obama is expected to announce his plan to use executive action to partially change the nation's immigration system Thursday night. (AP Photo/, Jordan Stead)
Supporters gather during a rally organized by OneAmerica as part of a National Week of Action to demand robust executive measures to stop deportations and keep families together Thursday, Nov. 20, 2014, in Seattle.

By Stephen Dinan

Illegal immigrants stand to make out nicely, seeing a big jump in their wages under President Obama’s policy, announced Thursday, granting millions of them temporary amnesty and the chance to work legally, but analysts say American workers in some jobs are likely to feel a pinch from new competitors.
While most of the illegal immigrants to whom Mr. Obama granted tentative legal status were already under little fear of deportation, they were usually working in the shadows, either off-the-books or using a bogus Social Security number that trapped them in low-skilled jobs and left them vulnerable to abuse by unscrupulous employers.
But Mr. Obama said millions of them will now be granted legal work permits along with their official stays of deportation, giving them a chance to seek better-paying jobs, demand a minimum wage and report workplace safety violations without fear of retribution.
Those new protections could produce an average wage jump of 12 percent, according to a Congressional Budget Office estimate attached to last year’s Senate immigration bill.
Native-born workers, however, will see a more mixed picture — and those in some low-skilled jobs, particularly ones that require a background check, such as drivers, school janitors or hired security guards, are likely to face new competition, said Steven A. Camarota, research director at the Center for Immigration Studies.
Mr. Camarota said illegal immigrants have probably been unable to win jobs that require more than a Social Security number because their legal status could be discovered during a more in-depth background check. But Mr. Obama’s new policy gives them legal work authority, clearing the way for them to apply for those posts.
For Mr. Camarota, whose group wants to see a crackdown on immigration, the effect on American workers in those fields could be significant.
“We face an employment crisis for the less-educated citizen population in this country, and the president is about to issue 5 million work permits for these folks to compete directly with those folks,” Mr. Camarota said.
The newly legal workers are unlikely to affect most of the labor market, chiefly because of the demographics of the illegal immigrant population. They are low-skilled and less educated — Mr. Camarota says they have an average of just 10 or 11 years of schooling, or less than a high school diploma — which means they will be competing with similarly situated Americans.
But Mr. Obama was also reportedly planning to increase the number of visas available to foreigners with science, math or engineering skills, which would create competition in those fields as well. Technology companies have pleaded for the extra workers, saying there’s a shortage in the U.S., but associations representing tech workers say that’s untrue and accuse the companies of trying to import foreign workers to undercut U.S. wages.
Jared Bernstein, former chief economic adviser to Mr. Obama and now senior fellow at the Center on Budget and Policy Priorities, said Mr. Obama’s plan doesn’t fit into the usual supply-and-demand calculations of available workers and open jobs because the immigrants are already here. That means there’s less danger of a job shock.
The chief effect, he said, will be better wages and conditions for the newly legal workers who are able to demand the going wage without fear of being threatened with exposure. Mr. Bernstein said that’s also good for native workers in those fields, because employers won’t be able to undercut them by hiring unauthorized workers.
“The most important dynamic here will be one that’s beneficial to these newly legalized workers themselves [and] also to the people who compete with them, because it’s much harder to compete with someone who can be paid much less than they’re worth,” he said.
Mr. Bernstein said while there may be some competition for jobs in some fields, the numbers involved in the president’s announcement aren’t big enough to create a major disruption for native workers.
He warned of a number of uncertainties, including questions about how many of those eligible for the new program will actually take advantage of it. Given that the program is temporary, he said some immigrants may be reluctant to identify themselves to federal authorities, fearing the program would be reversed by a future president.
The AFL-CIO didn’t respond to a message seeking comment on how the president’s plans would affect workers’ wages.
The Congressional Budget Office, in evaluating last year’s Senate immigration bill, reported that illegal immigrants who gained legal status under that legislation would have seen an average 12 percent wage increase because of their new legal status.
That CBO analysis said the Senate bill would slightly push down current legal workers’ wages because of competition, but said that was from the influx of new immigrants projected under that bill. Mr. Obama’s executive order doesn’t allow for a massive rise in legal immigration.
Daniel Costa, director of immigration law at the Economic Policy Institute, a union-backed think tank, said in a blog post on EPI’s website Thursday that native workers will in fact likely see a boost.
“When the immigrants’ wages are unfairly held down, so are the wages of U.S. workers competing for the same jobs and hours,” Mr. Costa wrote.

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