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Could immigration reform suppress wages for U.S. workers?

Marketplace Contributor Jan 28, 2013
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Lawmakers in Washington say they’re more optimistic than they’ve been in years over the chance of passing a comprehensive immigration reform package. So what would happen if the government decides to make millions of immigrants official members of the American workforce? What effect would that have on wages?

Critics conjure up images of a flood of immigrants willing to work for less. But some experts don’t expect much — if any — downward pressure on paychecks. That’s because the reforms would largely affect immigrants who’ve been here for decades.

“Once you wait long enough, the economy has already adjusted,” says Pia Orrenius, who has studied the effects of immigration on wages as a senior economist at the Federal Reserve Bank of Dallas. Besides finding minimal impact on low-skilled Americans, she says highly-sought-after engineers and other skilled immigrants can actually spur wage growth at the companies that hire them.

“If you bring in more technically trained immigrants,” she explains, “then the more generally trained native-born worker might move into a management or supervisory position.”

The last big reform, during the Reagan administration, brought higher wages across the board, says Raúl Hinojosa-Ojeda, a professor and immigration expert at UCLA. As immigrants became less vulnerable to being exploited, he says, even native workers benefited.

“You allow workers to have more rights, their wages go up, and we all end up winning,” Hinojosa-Ojeda says. He contends that immigrants can be the rising tide that lifts all boats.

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