The poorest and least-skilled in America suffer the most from legal and illegal immigration as competition for jobs reduces wages, according to a new report by a leading immigration economist.
Harvard economist George Borjas spoke about his report on immigration and its effects on the U.S. worker in a Tuesday conference call with reporters. He said the focus of his report was to answer "what happens when immigrants come into the labor market," one of the central questions in the debate over immigration reform.
"What is the wage impact? Who loses and who gains, and how much does the economy gain on average?" asked Borjas. He said that while the U.S. has a "lot of highly skilled immigrants," there are "many, many more low-skilled immigrant groups."
The report shows the "immigration surplus," or the benefit to Americans as a result of illegal and legal immigrants in the workforce, is estimated at $35 billion.
However, the wages of American low-skilled workers, who directly compete with immigrants, are reduced by some $402 billion a year. That amounts an average of $1,396 in reduced wages yearly for American workers, Borjas said.
Other winners are the businesses that hire immigrant workers, which benefit by $437 billion a year.
Those without a high school diploma lose the most, the report claims.
The overall result, according to Borjas, is a redistribution of wealth from America’s poorest to the owners of businesses and the immigrants themselves.
"There’s a huge redistribution of wealth," Borjas said, which is where the argument of "winners and losers" comes in.
"Winners win by more than the losers lose," he said.
"The biggest winners from immigration are owners of business that employ a lot of immigrant labor and other users of immigrant labor," according to the report. "The other big winners are the immigrants themselves."
The report states that while the overall net impact of immigration on Americans is small, it does not mean that the wage losses suffered by lower-skilled workers or the income gains to other Americans "are not substantial."
Immigrants in the labor market increase the Gross Domestic Product (GDP) by $1.6 trillion, an estimated 11 percent, according to the report. However, 97.8 percent of that increase goes directly to the immigrants themselves.
"The $1.5 trillion to $1.6 trillion, most goes to the immigrants themselves," Borjas said. "What remains for the nation is $30 billion to $40 billion."
Other key findings of the report include the fact that illegal immigration has increased GDP by an estimated $395 billion to $472 billion a year, and that the benefit to Americans is six one-hundredths of one percent, or $9 billion a year.
Though the net benefits to Americans from illegal immigrants are small, the report cites the "sizable redistribution effect" in wage reduction equates to $99 billion to $118 billion a year.
If highly skilled workers were affected in such a manner by immigration, Borjas said, "We may see a very different type of debate."