08.01.13

Immigration Policy As Corporate Welfare: Sessions Hits White House For Immigration Report That Shills For CEOs

“In its report today the White House embraced [a historic surge in immigration] as its central economic argument: what our economy needs most is a large increase in the number of low-skill workers. Perhaps we can finally have this debate out in the open—and dispense once and for all with the idea that the CEOs bankrolling the immigration push are concerned with anything other than reducing the cost of labor. It’s not about ‘reform’—it’s about profit…

Immigration reform has become synonymous with corporate welfare. It’s time we became more concerned with the welfare of millions of struggling workers and taxpayers.” 

WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, issued the following comments in response to a new state-by-state White House report, released today, touting the supposed economic benefits of a comprehensive immigration bill like the Senate’s Gang of Eight plan:

“For a long time the Gang of Eight refused to acknowledge that their bill represented a historic increase in immigration levels, including a large surge in low-skill immigration. In its report today the White House embraced these increases as its central economic argument: what our economy needs most is a large increase in the number of low-skill workers.

Perhaps we can finally have this debate out in the open—and dispense once and for all with the idea that the CEOs bankrolling the immigration push are concerned with anything other than reducing the cost of labor. It’s not about “reform”—it’s about profit.

The White House preposterously argues that this influx of new workers will raise wages, a conclusion not supported by any credible academic evidence or even CBO’s own report, which determined wages would fall for a dozen years. The leading expert on this issue, Dr. George Borjas, has found that high immigration levels from 1980–2000 resulted in an 8 percent income drop for lower-skill native workers—or almost $250 a month. There is a reason why workers earning $30,000 and under support a reduction over an increase in net immigration levels by a 3-1 margin.

Wages have fallen since 1999 and only 55 percent of U.S. adults are now working. African-American youth looking for work cannot find a job. We don’t have a shortage of workers—we have a shortage of jobs.

Yet the Senate bill, based on CBO data, would add 46 million mostly lower-skill legal immigrants by 2033. Does anyone really believe this will increase wages, reduce the number of unemployed, or reduce the strain on public benefits and local resources for those unable to find a job?

Immigration reform has become synonymous with corporate welfare. It’s time we became more concerned with the welfare of millions of struggling workers and taxpayers.

The guiding principle of immigration reform should be what’s in the national interest. We have grave and growing social and economic problems throughout our nation that must be addressed—dependency, chronic joblessness, and broken homes. We need an immigration policy in accordance with reality, not fantasy—one that allows for upward mobility, builds community confidence, reduces government dependency, and promotes rising wages for both native-born and immigrant workers alike.”

BACKGROUND:

  • The White House employed Regional Economic Models, Inc. (REMI) to prepare these state reports. This economics consulting company has a reputation for producing large, positive impact results on behalf of its clients. City governments, for example, contract with REMI to show huge economic gains from new sports stadiums. The predictions are almost universally more positive than the end results.
  • Not surprisingly, then, the White House argues that each state will see economic growth as a result of comprehensive immigration reform. This effect, however, stems mostly from simple increases in state population due to more immigration (the United States generously allows around 1 million people to enter the country each year; the Senate immigration bill would roughly triple that number). It is well known that the total amount of goods and services grows any time you increase the population in an economy.
  • The White House report ignores how individuals or working families would be affected by the supposed benefits of a surge in mostly low-skilled immigration. What is the economic gain if the total economy is larger but the average person is less well-off? As the Congressional Budget Office (CBO) noted, per capita Gross National Product under comprehensive immigration reform would actually be negative, not positive, even though the total size of the national economy would be bigger; common sense and any logical analysis would show the same result at the state level. Per person economic change is the best measurement of economic gain. Not only should the economic pie be bigger, but each individual’s slice should grow, as well.
  • The reports are completely silent on how much larger the state populations would grow as a result of chain migration. Under the Senate-passed legislation, green card holders (both illegal immigrants who attain LPR status, as well as future illegal immigrants) can apply for an unlimited number of visas for their children and spouses. The Gang of Eight bill boosts chain migration in other ways as well. These relatives may be non-working family members who use public services but do not contribute taxes or economic output. Indeed, the reports do not mention the costs that increased immigration will have on state and local infrastructure, schools, etc.
  • The White House’s state reports do not discuss state changes in the unemployment rate. This may not be surprising, since the CBO forecasted an increase in the U.S. unemployment rate should the Senate’s comprehensive reform bill become law. CBO’s finding follows accepted academic research that shows that a sudden increase in immigration causes native-born workers (particularly African-American workers) to lose their jobs or fail to find new ones. This is because the similarly skilled immigrant will work for a lower wage, whether he or she is a farm worker or a computer programmer.
  • The White House argues that immigration reform would reduce the federal deficit thanks to the new taxes paid by immigrants. However, they fail to include CBO’s careful caveat that using Social Security and Medicare taxes to pay for general government today creates an IOU for these very same funds that the Social Security and Medicare Trustees will one day ask the U.S. Treasury to pay. In short, counting these funds for deficit reduction today when they should be set aside for the payroll tax payer’s future Social Security and Medicare benefits creates a hole that future taxpayers, many of whom will be today’s young people struggling to launch their work lives, will have to fill.
  • The White House also argues that comprehensive immigration reform will lead to a more innovative, entrepreneurial economy. However, this same result could be attained by expanding the number of high-skilled visas under existing immigration law. Reducing taxes and regulations also are effective pathways toward expanding innovation and entrepreneurship—without dramatically increasing the number of low-skilled immigrants to compete with out-of-work Americans.