Bracero

Stephen Miller Doesn’t Understand the Economics of Immigration

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.

How President Trump Could Cheaply & Quickly End Illegal Immigration

Border apprehensions of illegal immigrants are substantially down in the first few months of the Trump administration. In fact, the border apprehension figure for the month of March is only 16,600, the lowest monthly figure since 2000. Apprehensions are an important proxy metric for the inflow of illegal immigrants. Many are giving credit to the Trump administration for this rapid and seemingly historical collapse in illegal immigration.

There was another historical decline in border apprehensions that was even quicker, more dramatic, and far cheaper than the decline in border apprehensions that began in 2006 and has trended downward to the Trump administration. It occurred in the 1950s when the government streamlined the Bracero guest worker visa program and allowed more legal migration. These two periods of time lasted about the same number of years and provide an easy comparison between two means of diminishing illegal immigration: by making it legal or doubling down on enforcement.

The border patrol apprehended virtually the same number of illegal immigrants in 1954, when the deregulated Bracero program began operation, as in the year 2006. The deregulated Bracero program lasted from 1954 to about 1965 and the 2006 decline has lasted until today. Apprehensions fell after both of those but they fell further and much more rapidly in the 1950s (Figure 1). Apprehensions declined by 93 percent from 1954 to 1956 but only by 34 percent from 2006 to 2008. Figure 2 shows the same numbers indexed to 1 in the first year. Clearly, the Bracero Era witnessed a much more rapid and complete decline in illegal immigrant entries than the crackdown from 2006 to today.

Figure 1
Border Patrol Apprehensions

Sources: USCIS, CBP, and INS.

Cutting Legal Immigration Won’t Help Low-Skilled American Workers

Senators Tom Cotton (R-AR) and David Perdue (R-GA) recently introduced the Reforming American Immigration for Strong Employment (RAISE) Act.  If it were to become law, RAISE would cut legal immigration by 50 percent over the next ten years by reducing green cards for family members of U.S. citizens and lawful permanent residents, slashing refugees, and eliminating the diversity visa lottery.  These goals are in line with President Trump’s stated objective to cut legal immigration in most categories. 

The RAISE Act’s goal is to increase wages for lower-skilled Americans by reducing the supply of lower-skilled immigrants.  Their press release argues that the “generation-long influx of low-skilled labor has been a major factor in the downward pressure on the wages of working Americans, with the wages of recent immigrants hardest hit.”  Under such a worldview, only a drastic reduction in green cards and the supply or workers can raise American wages - and it’s not crazy.

The National Academy of Sciences’ (NAS) exhaustive literature summary on the economic effects of immigration concluded that: “When measured over a period of 10 years or more, the impact of immigration on the wages of native-born workers overall is very small.  To the extent that negative impacts occur, they are most likely to be found for prior immigrants or native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills.”  Although the effect is small, RAISE seeks to take advantage of the finding in the academic literature by inferring that if an increase in the supply of workers slightly lowers some wages then a decrease in that same supply will do the opposite.

It might seem odd then that RAISE doesn’t target employment-based green cards but that category is for highly skilled workers while the categories this bill would cut are more likely to allow in lower-skilled workers who have fairly high labor force participation rates.  I’ve rebutted Senator Cotton’s poor economic arguments for immigration restrictions before but recent research is even more compelling. 

A recent paper by economists Michael Clemens, Ethan Lewis, and Hannah Postel seems tailor-made to test what would happen if a bill like the RAISE Act were to become law.  The paper studies the effectiveness of an immigration policy “designed to raise domestic wages and employment by reducing the total size of the workforce.”  The U.S. government’s 1964 termination of the Bracero program for Mexican farm workers provides a natural experiment for their paper which is comparable to what would happen if RAISE becomes law.  Senators Cotton and Perdue will be disappointed to discover that this new research found that ending lower-skilled migration for farm workers had little measurable effect on the labor market for Americans who worked in those occupations.

Enforcement Didn’t End Unlawful Immigration in 1950s, More Visas Did

In last night’s Republican Presidential debate, Donald Trump argued that President Eisenhower immigration enforcement plan called Operation Wetback (Trump didn’t use that horrendous name) drastically reduced unlawful immigration in the early 1950s.  He said:

“Let me just tell you that Dwight Eisenhower. Good president. Great president. People liked him. I liked him. I Like Ike, right? The expression, ‘I like Ike.’ Moved 1.5 million illegal immigrants out of this country. Moved them just beyond the border, they came back. Moved them again beyond the border, they came back. Didn’t like it. Moved ‘em waaaay south, they never came back. Dwight Eisenhower. You don’t get nicer, you don’t get friendlier. They moved 1.5 million people out. We have no choice. We. Have. No. Choice.”

The evidence and statements by border patrol and INS officials in the 1950s and afterward disagree with Mr. Trump’s analysis.  Increased immigration enforcement did not reduced unauthorized immigration in the 1950s, legal migration did.

Background

In 1942, the United States government created Bracero guest worker visa program to allow Mexican farm workers to temporarily work for American farmers during World War II.[i]  The government entered into a bilateral labor agreement with Mexico that regulated the migrant’s wages, duration of employment, age of workers, health care, and transportation from Mexico to U.S. farms.[ii] Transportation to the farm, housing, and meals were sold by the employers for a low price.[iii]  Ten percent of the migrant’s wages were deducted from their paychecks and deposited in an account that would be turned over to them once they returned to Mexico.[iv]  

The Bracero program did not limit the number of migratory workers as long as the government’s conditions were met, making the system flexible to surges in demand. As a result, nearly five million Mexican workers used the Bracero program from its beginnings in 1942, when the first group of 500 braceros arrived at a farm in California, until the program’s cancellation in 1964.[v]  The program’s flexibility increased over time as the Border Patrol and INS realized that the Bracero program was an indispensable component of reducing unlawful immigration by providing a lawful means of migration. During the early phase of the program, the United States government acted as the arbiter and distributor of the Mexican workers to American farms – heavily subsidizing the movement and not requiring total reimbursement for government expenses on medical and security screenings.[vi]  Later, as the number of unauthorized immigrants began to rise, the government reformed the program to allow for workers and employers to deal more directly with fewer regulations and government subsidies.[vii] 

Guest Worker Visas Can Halt Illegal Immigration

There is a trade off between the number of lower skilled guest worker visas and the number of unauthorized immigrants.  More lower skilled guest workers means fewer unauthorized immigrants.  Fewer guest workers mean more unauthorized immigrants.  We just have to look back to the Bracero program to see this relationship.   

Subscribe to RSS - Bracero