22 days ago
One of the reasons why real wages in the United States have remained largely unchanged in the past decades is that low-skilled immigrants are willing to work for less, George Borjas, professor at the Harvard Kennedy School said.
"From a purely economical perspective, the (investment in) low-skilled migrants is almost never returned," Borjas said. His field of study is the economics of migration and he readily admits that the economic aspect is just one facet of migration.
"In an American context, the question is whether we want to give people the chance to realize the American dream, even if this is not a profitable proposition in economic terms," he said.
Borjas added that in 2017, the net balance resulting from the immigration workforce was a surplus of US$50 billion, but that figure was a result of a US$516 billion reduction in wages and US$566 billion additional profit for enterprises. He said this shows that the costs of additional profit for the companies have been effectively paid by the indigenous workforce.
Borjas said that a selective immigration policy favoring highly skilled individuals can potentially give a significant boost to innovation but that decision falls in the field of politics, not economics. He also questions the generally accepted economic argument that a growing workforce is needed for economic growth.
"I don't quite understand the argument that economic growth requires more people. China has been operating a one-child policy for decades. There is no immigration to speak of. Yet economic growth is fantastic."
Title image: George Borjas (Mandiner/Árpád Földházy)