Senior Trump administration aide Stephen Miller gave a press briefing yesterday defending the RAISE Act - a bill introduced by Sens. Cotton (R-AR) and Perdue (R-GA) that would slash the number of legal immigrants without increasing skilled or merit-based immigration. The purpose of the RAISE Act is to restrict low-skilled immigration in order to raise the wages of American workers.
When asked by a reporter for evidence that restricting low-skilled immigration would raise wages, Miller cited research by Harvard economist George Borjas on the Mariel Boatlift. The Mariel Boatlift produced an unexpected surge of 125,000 Cubans (henceforth Marielitos) to Miami in 1980. Because at least 60 percent of the Marielitos were high school dropouts, Borjas tested whether they lowered the wages of American dropouts. Since Borjas published his Mariel paper, there have been many rebuttals, criticisms, and additional research on it that should substantially diminish confidence in his findings. Below I will briefly summarize these results.
The first such criticism is by economists Michael Clemens and Jennifer Hunt. They conclude that the entirety of the wage decline observed by Borjas can be explained in how the wage survey in Miami increased the proportion of black workers surveyed, far in excess of their proportion of the population, when the Boatlift occurred (the CPS change was unrelated to the Boatlift). Black American workers with less than a high school degree have lower wages than similarly skilled non-black Americans for myriad reasons that have nothing to do with immigration. By including more of them in the survey at the same time the Marielitos were arriving made it look like there was a drastic wage decline when the observed effect was entirely due to shifting the demographics of the surveyed population. That survey shift entirely explains the negative wage effect observed by Borjas. Borjas’ response to Clemens and Hunt is weak.
The second criticism of Borjas’ Mariel Boatlift research is by economists Giovanni Peri and Vasil Yasenov. They note that wages in Miami must be compared to wages in similar cities at the same time to measure how wages changed. By selecting a set of comparison cities using the Synthetic Control Method, a different method than Borjas used, they found no statistically significant deviation in Miami’s wages compared to similar cities that did not absorb the Marielitos. Furthermore, Borjas relied on smaller surveys with few relevant observations for Miami and other cities. Peri and Yasenov used the larger to get even more data on wages. Including the additional data also showed that the Marielitos did not lower wages.