Immigration policy and less-skilled workers in the United States

The costs and benefits are too complex and varied to determine an optimal level of less-skilled immigration

In a new report for the Migration Policy Institute (MPI), Immigration Policy and Less-Skilled Workers in the United States: Reflections on Future Directions for Reform, Holzer, a former chief economist at the US Department of Labor, contends that the costs and benefits are too complex and varied to determine an optimal level of less-skilled immigration.
Holzer's review suggests a series of changes to the immigration system that would be beneficial, including:

• Providing pathways to legal status and citizenship for low-skilled workers already here, and a legal route for future workers by using provisional visas that make it possible for some temporary workers to become permanent residents;
• Allowing less-skilled workers on employment-based visas to switch employers more easily and gain a path to citizenship;
• Setting employer visa fees at a level sufficient to offset some of the costs that low-skilled immigration imposes;
• Ensuring flexibility in the numbers admitted so that flows can respond to employer demand and macroeconomic conditions.

Cautioning that it is unclear how employers and workers, both immigrant and native-born, would react to policy change, Holzer suggests allowing some flexibility in implementing reforms to permit experimentation with different approaches.

Low-skilled immigrant workers benefit employers and consumers

In his review of the research literature, Holzer finds that the benefits of low-skilled immigration accrue primarily to employers, who benefit from paying lower wages; and to both higher- and lower-income consumers, who purchase the goods and services less-skilled immigrants produce. The costs are borne by low-skilled native and earlier-arrived immigrant workers who must compete with these immigrants for jobs. Though there is little consensus on the exact magnitudes of these costs, they generally appear to be quite modest. There are also both fiscal costs and benefits to federal, state and local governments but these generally turn more positive over the long run and across generations.

MPI’s researches on immigrant labour in America

The report was commissioned to inform the work of MPI’s Labor Markets Initiative, which has been conducting a comprehensive, policy-focused review of the role of legal and illegal immigration in the labor market. Earlier reports have examined middle-skilled immigrant workers, the effects of illegal immigration on the U.S. economy, how immigrants fare during periods of boom and bust, their impact on the economy throughout the economic cycle and the effects of the global economic crisis on immigrants in the United States and around the world.