Tag Archives: Economic Policy Institute

Stan Tsirulnikov on progressive immigration restrictionism

Writing at The Umlaut, Stan Tsirulnikov offers an interesting take on progressive immigration restrictionism. Tsirulnikov dubs it “immigration protectionism” and critiques it as being against the spirit of the bold changes that progressivism should be about. The targets for Tsirulnikov’s criticism include Dean Baker, head of the progressive Center for Economic and Policy Research, for espousing strict limits on high-skilled immigration and apparently zero (?) low-skilled immigration. Another target is a piece by Josh Harkinson in Mother Jones titled How H-1B Visas Are Screwing Tech Workers. Tsirulnikov concludes:

Harkinson isn’t wrong to be concerned about the plight of struggling Americans. But as Bryan Caplan has pointed out in the past, it is morally questionable to put more emphasis on the “American” rather than the “struggling” part. Nevertheless, many progressives want to use immigration restrictions as a round-about way of helping vulnerable American workers. They know that the American public will not support direct subsidies to individual workers harmed by immigration, so they use restrictions as a cynical half-measure to prevent the supposed harm from happening at all. Baker’s proposal has the restrictions fall disproportionally on unskilled and poor foreigners, while Harkinson wants to make hiring high-skilled foreigners more difficult. But both view immigration as a potentially hostile force that needs to be managed for the exclusive benefit of Americans.

Overall, I tend to agree with Tsirulnikov. I considered progressive immigration restrictionism and its territorialist underpinnings in a blog post a little over two months ago (see also a ollow-up by Arnold Kling). I’ve also tried to address specific concerns raised by employees of the Economic Policy Institute (referenced by Harkinson’s Mother Jones piece) in the following blog posts: guest worker programs and worker abuses and Eisenbrey argues against increasing US visas for high-skilled work. Alex Nowrasteh offered a more detailed and forceful critique of Eisenbrey here.

America Does Not Have A ‘Genius Glut’

This post was originally published on the Cato-at-Liberty blog here and is republished with the permission of the author.

On Friday, Ross Eisenbrey of the Economic Policy Institute wrote an op-ed in the New York Times titled “America’s Genius Glut,” in which he argued that highly-skilled immigrants make highly skilled Americans poorer. 

A common way for highly-skilled immigrants to enter the United States is on the H-1B temporary worker visa. 58 percent of workers who received their H-1B in 2011 had either a masters, professional, or doctorate degree. The unemployment rate for all workers in America with a college degree or greater in January 2013 is 3.7 percent, lower than the 4 percent average unemployment rate for that educational cohort in 2012. That unemployment rate is also the lowest of all the educational cohorts recorded. 

Just over half of all H-1B workers are employed in the computer industry. There is a 3.9 percent unemployment rate for computer and mathematical occupations in January 2013, and an unemployment rate of 3.8 percent for all professional and related occupations. For selected computer-related occupations from the Bureau of Labor Statistics’ “Quarterly Census of Employment and Wages,” real wage growth from 2001 to 2011 has been fairly steady:   

 

 11 percent of H-1B visas go to engineers and architects but wage growth in those occupations has been fairly steady too:

 

Mr. Eisenbrey concludes that those rising incomes would rise faster if there were fewer highly-skilled immigrants. 

The unemployment rates for engineers and computer professionals are low but not as low as they used to be. There are a whole host of factors explaining that, but highly-skilled immigration is not likely to be one.  

Mr. Eisenbrey also claims that American firms hire H-1B visa workers because they are paid lower wages. Complying with certain regulations prior to hiring an H-1B can cost a firm $10,000, filing and other fees can cost additional thousands of dollars, and legal fees can be steep. The cost of hiring H-1Bs is high.

Contradicting Mr. Eisenbrey’s story about H-1Bs lowering American wages, IT workers on H-1Bs actually earn more than similarly skilled Americans. According to survey data, H-1B workers are more willing to work long hours and relocate to a job, making them more productive and raising their wages. Additionally, H-1B engineers are paid $5,000 more a year than American born engineers. If the goal of employers was to hire cheaper workers through the H-1B visa, they’re going about it in an odd way. The high regulatory costs and wages of employing H-1B workers incentivizes firms to hire foreign workers when they are expanding and can’t find American workers fast enough.  

Mr. Eisenbrey’s doesn’t touch on other characteristics of highly-skilled immigrants such as their high rates of entrepreneurship, inventiveness, or skill complementarity. If the New York Times chooses not to run one of my letters to the editor about those topics, I will be writing about them in the upcoming weeks.

Eisenbrey argues against increasing US visas for high-skilled work

Ross Eisenbrey of the Economic Policy Institute has written an op-ed in the New York Times titled “America’s Genius Glut” with the argument that the United States should not increase non-immigrant guest worker visas for (allegedly) high-skilled workers (the H1B visa category). Eisenbrey’s argument is thoughtful and nuanced, and he comes at this restrictionist conclusion from a more progressive stance than the majority of restrictionists I read (though, to be fair, many allegedly right-wing restrictionist groups often use very similar rhetorical arguments).

Below are my quick thoughts on Eisenbrey’s piece. These were written very quickly, hence my sincere apologies to Mr. Eisenbrey if I misrepresented his position. I’ve also tried to argue based on (what I understand to be) Mr. Eisenbrey’s framework of assumptions and goals, even though I don’t share them in many respects.

  • Eisenbrey writes:

    But America’s technology leadership is not, in fact, endangered. According to the economist Richard B. Freeman, the United States, with just 5 percent of the world’s population, employs a third of its high-tech researchers, accounts for 40 percent of its research and development, and publishes over a third of its science and engineering articles. And a marked new crop of billion-dollar high-tech companies has sprung up in Silicon Valley recently, without the help of an expanded guest-worker program.

    I’m in broad agreement with Eisenbrey that the United States (or for that matter, the world at large), is not at risk of systemic collapse if it fails to increase H1B quotas or relax the requirements for getting a H1B visa. I expect that things will keep getting better for the world, with or without open borders. I don’t think that Silicon Valley, or any other stereotypical high-skilled worker sector, is at risk of folding up due to a lack of immigrant labor. The current guest worker visa regime seems good enough to keep these sectors alive, though at the same time they may face competition from other jurisdictions outside the US that are easier to migrate to (see, for instance, here and here). Those who claim imminent collapse are probably mistaken.

    But while the crisis argument is misguided, that is hardly an argument for the status quo and hardly an argument against improvement. The relevant question to consider with any proposal is how it compares with the alternative, not whether it is absolutely necessary. So overall, while it’s valuable to point out what Eisenbrey did, the point of contention is still open to debate.

  • Eisenbrey writes:

    almost 90 percent of the Chinese students who earn science and technology doctorates in America stay here; the number is only slightly lower for Indians. If they’re talented enough to get a job here, they’re already almost guaranteed a visa.

    I think it’s true that the vast majority of high-skilled and qualified workers educated in the US can stay in the US if that is their primary aim. But not necessarily doing the job of their choice, or the job that would create the maximum value for society (from either a citizenist or universalist perspective). The existing H1B regime favors (in relative terms) large established companies that can afford the legal fees and other resources to help procure visas. Of course, this isn’t to say that these large established companies are favored in absolute terms — even these companies would prefer not to have to make these outlays. But what’s an inconvenience for large established companies can be a dealbreaker for startups and small companies. Also, the inflexibility of the guest worker visa program means that it’s difficult for workers to do short-run internships at companies before deciding whether to work there long-term, and other intermediate and flexible arrangements may also be ruled out. Many foreigners who want to create a startup, or work at one, or attempt a flexible arrangement of this sort may compromise either by not choosing to stay in the US, or working at a large company instead. John Lee’s recent post had some examples, see also the quote from Natalie MacNeil here or the story of entrepreneur Amit Aharoni.

  • Eisenbrey writes:

    If there is no shortage of high-tech workers, why would companies be pushing for more? Simple: workers under the H-1B program aren’t like domestic workers — because they have to be sponsored by an employer, they are more or less indentured, tied to their job and whatever wage the employer decides to give them.

    I’m not sure if, controlling for all relevant skill variables, this is true, but if, in fact, those on H1B visas get paid less than identically skilled natives, one simple explanation might be all the legal outlays, as well as uncertainty, associated with H1B hiring, which factor into the cost on the employer side but don’t actually reach the employee’s pocket. That’s the demand-side story. The supply of workers story is that workers prefer to take lower wages than natives that are still substantially higher than wages in their home country.

    Eisenbrey is also correct that guest worker programs that are tied to a single program lock workers in and may allow employers to offer lower wages to workers because of lower fear of exit. But this also cuts in another direction: employers aren’t able to “poach” such guest workers that easily from their competitors. Overall, I don’t think that the inflexible guest worker programs are all that beneficial to employers in the big picture (though you could make an argument that employers as a whole benefit modestly by keeping wages slightly lower than they would be in a market equilibrium, this effect would still be lower than the naive estimate due to greater friction in hiring employees from competitors). In any case, in so far as the proposal being critiqued by Eisenbrey fails to offer flexibility with respect to changing employers, this is a valid critique. However, in as much as it doesn’t make things worse than the status quo, I’m hard-pressed to see why Eisenbrey would oppose it. (note that most versions of guest worker programs proposed by open borders advocates allow for easy change of employers — see here and here).

  • Eisenbrey writes:

    Bringing over more — there are already 500,000 workers on H-1B visas — would obviously darken job prospects for America’s struggling young scientists and engineers.

    The citizenist connotations here are striking, but it would be pointless to critique citizenism yet again here. Still, there is an interesting question: to what extent does high-skilled immigrant labor depress the wages of high-skilled native labor? It’s hard to measure “skill” so most labor economists use proxies such as education level and type of degree. There are theoretical reasons to believe that many sectors using high-skilled work may enjoy more complementarity than substitution between different workers. At any rate, that’s my guess, as I mentioned here. But this is a controversial position. The most pessimistic estimate I’m aware of is that by George Borjas, which estimates that the last few decades of immigration have depressed the wages of college graduates by 3.9% in the short run and 0.5% in the long run (interestingly, in Borjas’s numbers, the only groups experiencing long run wage declines are college graduates and high school dropouts). I think that Borjas’s model by design ignores complementarities, making some of these conclusions suspect from my perspective, but this is something I’d need to examine far more closely than I’ve had time for so far.

    Now, obviously, the numbers could look a lot different under open borders. But Eisenbrey is talking of marginal changes to an existing system, not complete open borders. A 0.5% long run wage decline is nothing to be laughed at, but it is hardly a catastrophe, and not the same as destroying people’s livelihoods and life prospects.

  • Eisenbrey writes:

    But it would also hurt our efforts to produce more: if the message to American students is, “Don’t bother working hard for a high-tech degree, because we can import someone to do the job for less,” we could do significant long-term damage to the high-tech educational system we value so dearly.

    Although I’ve read many restrictionist arguments, this is a new one: immigration of high-skilled workers lowers the pay for high-skilled native workers, which lowers the payoff of acquiring high skills, which lowers people’s degree of education. I’d have to think a lot more about this to come up with a clear view on the matter, but offhand, this does seem plausible once you agree with the preceding claim that high-skilled immigration lowers high-skilled natives’ wages (again, in practice, we’ll proxy “high-skilled” with “college graduate” or something similar when measuring stuff).

    Still, if this is true, is this an additional reason to worry about high-skilled immigration? I don’t see why. If, for some reason (immigration or otherwise) the returns to high-skilled work fall, and people respond by pursuing less of education in those skill areas, this seems like an appropriate response to the changed economic conditions, that is both privately and socially beneficial. If you believe that education is mostly about signaling, then this is even more socially beneficial than it appears. The only way I see where you’d consider this bad is if you think either that people undervalue their own gains from education or if you think education confers significant social benefits over and above the private benefits it offers.

    The undervaluing story may be valid, but you’d then need to show that the extent to which people undervalue education also increases with a reduction in the return to education, which would seem somewhat self-contradictory and hard to show.

    I’m not opposed to the idea of significant social benefits to education (though my personal view is that it’s more than canceled by signaling, but let’s set that aside for now). However, if these significant social benefits exist in the form of positive spillovers, it seems prima facie plausible that educated guest workers would generate very similar positive spillovers, so this fails to be an additional argument against guest worker programs, even from a citizenist perspective.

UPDATE: Here’s a somewhat more forceful response from Alex Nowrasteh, that critiques some of the numerical and empirical claims made by Eisenbrey. Alex’s critique is largely complementary to mine (in that it covers a different set of points, with minor overlap).

Guest worker programs and worker abuses

A while back, Daniel Costa of the progressive Economic Policy Institute, a think tank that advocates for the interests of poor Americans, did an interesting blog post titled On International Migrants Day, remember that guest worker programs aren’t the solution for immigration reform. This met with a lot of pushback on Twitter, and Costa followed up with a related blog post describing what he considered to be extensive abuses in guest worker programs in the United States (the H2 visa program). Among the stories that Costa linked to were Filipino teachers being conned by a recruiter, workers reporting exploitation by a seafood company in Louisiana that supplied to Walmart, and a negotiated settlement about people under J-1 visas being exploited at work. Based on these and other incidents, Costa is understandably very skeptical of proposals that go by the name of guest worker programs.

I will not commit the moral and strategic error of shrugging off the problems of current H2 visa programs in the US with “not as bad as” trivialization. I think that problems and abuses at guest worker programs, while not the worst thing in the world, are definitely worth putting in the balance when proposing the expansion of guest worker programs. However, I think that Costa’s prescriptions don’t necessarily follow from his observations.

Guest worker programs: tied to an employer?

Most open borders advocates view the keyhole solution of guest worker programs as a half-way compromise, not a desirable ideal (in the jargon of this blog post, they tend to have a (1) > (2) > (3) preference ordering: open borders preferable to expanded guest worker programs preferable to the status quo).

As the guest worker programs page on this site describes, there are many different parameters whose values can be fiddled and adjusted while still staying within the broad category of guest worker programs: the time duration of the program, flexibility in terms of jobs, extent of legal rights, eligibility for citizenship, deportation conditions, and eligibility for welfare benefits being the parameters listed on the page. Of these, the first three (time duration, flexibility in terms of jobs, and extent of legal rights) are the most relevant for considering the problem of worker abuse. The kinds of guest worker program solutions that open borders advocates typically propose are those with essentially unlimited (or periodically renewable) time duration, the ability to switch jobs at will (i.e., not tied to any particular employer), and full legal rights (however, some proponents of these programs oppose some labor regulations per se, like the minimum wage, for natives as well as foreigners). Further, as a general rule, people coming at guest worker programs from an open borders angle oppose quantity caps on the amount of guest worker labor that can be used.

I think that these key elements will lead to abuses of the kind that Costa sees in current guest worker programs becoming more rare. With the status quo in the US, guest worker programs are heavily time-limited and tied to specific jobs. There is also a pretty severe quantity restriction on these programs. This makes it extremely hard for workers to “shop” between employers, both at the time of applying for a visa, and once they are in the US. Their main element of discretion is in whether they choose to come the next year. Even in the status quo, reputational effects and the need for good worker morale check some worker abuses. But with fewer quantity caps, fewer time limits, and the ability to switch between jobs, worker abuses are likely to be lower as workers can “shop” better.

A quick analogy might help. Suppose a particular factory is the main employer in town, and it pays its workers very low wages and has demanding working conditions. Now, a competing factory wants to open up in the same town. Should the residents of that town fear the new factory, based on the rule that factories exploit their workers? Or should they welcome the new factory, in that the competition between the two factories may improve conditions for workers? While the details vary from case to case, I would suspect the latter.

Now, admittedly, the cases aren’t quite parallel, because in the analogy I gave, the population of the town was not changing. But if the creation of a new town just attracts more labor from outside the town, then the effect on wages in the original factory may be smaller (though probably still positive). Even here, though, unless you discount completely the welfare of people who move to the town, the net effect on wages is still expected to be positive.

It might be helpful to look at a blog post from Michael Clemens on migrant labor in the US agricultural sector. Here’s what Clemens says:

If you think these difficult jobs are bad for Mexicans, think about this: 85% of the NCGA’s Mexican seasonal employees last year were repeat employees. They came the previous season, and they chose to come back the following season. It is inappropriate and unfortunate that some labor advocates call H-2 visa jobs “close to slavery.”Slaves had no such choice, and would not have happily gone back to the plantation that owned them. Furthermore, the H-2 visa holders who work for the NCGA are not tied to a single farm: their visa allows them to work throughout the 700-farm network, so that there are opportunities to move if any given farm violates labor standards. Any shortcomings of the H-2 program are not the fault of migration itself; they can be fixed by fixing the program.

I don’t have independent corroboration of these statements, but it does seem to make sense that workers whose visa allows them to switch employment between a lot of farms in a huge network would be less susceptible to the problems of worker abuse. Repeat seasonal migration also creates incentives for employers to treat workers fairly and honestly.

Note: I read through the Red Card solution website, which offers a detailed guest worker program proposal for the US, and I was disappointed to see that the proposal did not address the issue of how this proposal would accommodate the possibility of workers changing employers — would they need to return to their home country to re-apply, or could they change their authorization while still in the US? Continue reading “Guest worker programs and worker abuses” »

How opponents of immigration on the left and right differ: territorialism versus citizenism

Post by Vipul Naik (regular blogger and site founder, launched site and started blogging March 2012). See:

Alex Nowrasteh recently tweeted criticisms of open borders from two fronts: Daniel Costa of the progressive Economic Policy Institute in a blog post titled On International Migrants Day, remember that guest worker programs aren’t the solution for immigration reform and Mark Krikorian of the center-right Center for Immigration Studies in a piece on National Review titled Black Unemployment: Just Don’t Mention the Immigration!

So I read both pieces. What struck me (and I also tweeted this) was that a quick reading of the articles wouldn’t reveal clearly which one was coming from a progressive/left-leaning perspective and which one was coming from a right-leaning/conservative perspective. Superficially, both arguments fell under what Bryan Caplan might dismiss as the master race argument — the idea that low-skilled natives are the ultimate interest group who should be given special preference in any policy discussion. It’s not my place here to critique this line of argument (though, if you’re interested, Nathan Smith blogged about teens and immigrants a while back, and Alex Nowrasteh had a critique of a related CIS study several years ago).

The point I want to make is that, despite the superficial similarity in the two pieces, there is one important difference, which I think is the key difference between the left-wing/progressive segment of opposition to open borders and the right-wing/conservative segment of opposition to open borders. Namely, progressive opponents of open borders tend to be influenced by a mix of territorialism and local inequality aversion. Their sphere of moral concern includes everybody who is within the geographical territory of their country, including citizens and non-citizens, and including both legal and illegal immigrants. And, in addition to being concerned about the absolute status of these people, progressive opponents of immigration are also concerned about inequality within the territory. As Arnold Kling notes in his three axes theory, the distinguishing feature of progressives (compared to conservatives and libertarians) tends to be their tendency to give more importance to the oppressor-oppressed axis (I’ve also written about why I find this sort of folk Marxism unconvincing, even when it is ostensibly pro-open borders). Combining a focus on the oppressor-oppressed axis with territorialism and local inequality aversion produces the kinds of proposals and concerns that Costa raised in his EPI blog post. Explicitly, it generally involves a combination of a path to citizenship, stricter enforcement, strong laws against worker exploitation, and an immigration policy designed to benefit currently low-skilled natives.

Anti-immigration individuals on the center-right, which probably includes all the hardcore restrictionist groups from CIS to VDARE and anti-immigration voices in more mainstream conservative outlets, are more likely to favor citizenism instead of territorialism. They are more likely to favor policies that explicitly discriminate in favor of current citizens. Immigrants and non-citizens who happen to reside within the geographic territory do not get the special status that citizens do, and in so far as they crossed borders illegally, it is considered moral to deport them. As per Kling’s three axes, center-right individuals are likely to be more focused on concerns of civilization versus barbarism, and while the alien invasion metaphor is probably an exaggeration, basic concern about how illegal immigration undermines the rule of law adds to the general worries about the harms created by immigration. Thus, center-right restrictionists are more likely to favor reform proposals that include attrition through enforcement and stronger border security while simultaneously reducing future levels of legal immigration, and while they are not completely averse to a path to citizenship, they would probably insist that it be restricted to a very special subclass (for instance, Mark Krikorian has expressed support for a version of the DREAM Act, but not the current version being passed around).

All in all, the main difference between progressive restrictionists and center-right restrictionists lies in how they want to deal with the illegal immigrants already here. Generally, restrictionists in both camps agree that future immigration levels need to be cut down or tailored to the interests of low-skilled natives, that enforcement (both at the border and in the interior) needs to be stricter, and that large-scale guest worker programs create more problems than they solve. Nonetheless, the differences between these two groups present unique challenges to those who are trying to come up with keyhole solutions. A keyhole solution that denies a path to citizenship, or walls off eligibility to the welfare state, might appeal somewhat to some (but not all) center-right restrictionists, but would be taken very negatively by progressive restrictionists.

A quick final note: I don’t mean to suggest that anybody who subscribes to citizenism or territorialism must necessarily be a restrictionist. Open borders do benefit many citizens, and keyhole solutions can be devised that help make them a win-win for the vast majority of citizens and those living in the geographical territory (as an example, see Nathan Smith’s DRITI proposal, or his blog post the citizenist case for open borders). Progressive restrictionists concerned about a path to citizenship might nonetheless come to the conclusion that expanded guest worker programs, despite their ills, and despite the lack of a path to citizenship, are still an improvement over the status quo. While I personally think of both citizenism and territorialism as morally flawed, there is no prima facie inconsistency between adopting these stances and supporting considerably freer migration than the status quo allows.