While making a speech in Washington on Monday, U.S. Labor Secretary Tom Perez said that allowing an influx of foreign workers would boost wages and help the economy. This contrasts the findings of several studies.
In his speech, Perez cited a Congressional Budget Office study that found that the Senate's comprehensive immigration reform bill, S. 744, would increase U.S. economic activity by 5.4 percent in the first two years. “Adding jobs, putting upward pressure on wages, helping to stabilize the Social Security trust fund,” he said. However, the same study has a different take on wages. It said, "As the labor supply initially increased under the legislation, less capital would be available for each worker to produce output, and thus workers’ output, on average, would be lower for a time,” and that wages would actually drop between 0.1 and 0.3 percent by 2023.
Perez's comments also go against a study conducted by Harvard University economist Dr. George Borjas. Dr. Borjas determined that immigration from 1960 to 2012 has cost native-born workers an average of $402 billion in lost wages. In a similar study, Dr. Borjas also determined that the impact of increased immigration from 1980-2000 resulted in a 3 percent decrease in wage for average native workers, and an 8 percent decrease for high school dropouts. A 10 percent increase in the size of a skill group (i.e. high school drop-outs) reduces wages of that group by 3-4 percent.
The Center for Immigration Studies' report on immigration and employment also contradicts with Perez's statement. In the report, released in June, found that all U.S. employment growth since 2000 has gone to new immigrants.
