The NY Times assesses the fifty year War on Poverty, so we are commencing an immediate KausWatch for aneurysms and coronaries. Among the laugh lines from the Times we especially liked this (my emphasis):
The more important driver of the still-high poverty rate, researchers said, is the poor state of the labor market for low-wage workers and spiraling inequality. Over the last 30 years, growth has generally failed to translate into income gains for workers — even as the American labor force has become better educated and more skilled. About 40 percent of low-wage workers have attended or completed college, and 80 percent have completed high school.
Economists remain sharply divided on the reasons, with technological change, globalization, the decline of labor unions and the falling value of the minimum wage often cited as major factors. But with real incomes for a vast number of middle-class and low-wage workers in decline, safety-net programs have become more instrumental in keeping families’ heads above water.
No one the Times spoke to suggested that immigration impacts the incomes of low-wage workers? Lower the Cone of Silence!
Immigration is an intensely painful topic for a liberal like myself, because it places basic principles in conflict. Should migration from Mexico to the United States be celebrated, because it helps very poor people find a better life? Or should it be condemned, because it drives down the wages of working Americans and threatens to undermine the welfare state? I suspect that my March 27 column will anger people on all sides; I wish the economic research on immigration were more favorable than it is.
Well, that is why we had a liberal take-over of academia; eventually, they will figure out how to produce the "right" answer. While we wait:
My second negative point is that immigration reduces the wages of domestic workers who compete with immigrants. That’s just supply and demand: we’re talking about large increases in the number of low-skill workers relative to other inputs into production, so it’s inevitable that this means a fall in wages. Mr. Borjas and Mr. Katz have to go through a lot of number-crunching to turn that general proposition into specific estimates of the wage impact, but the general point seems impossible to deny.
Impossible to deny but easy to ignore!
Krugman lauds Borjas, so let's take this from his current work:
- Although the net benefits to natives from illegal immigrants are small, there is a sizable redistribution effect. Illegal immigration reduces the wage of native workers by an estimated $99 to $118 billion a year, and generates a gain for businesses and other users of immigrants of $107 to $128 billion.
- The above estimates are generated by the presence of additional workers in the labor market, not by the legal status of those workers.
That doesn't even factor in low-wage legal immigrants. So more broadly:
Even though the overall net impact on natives is small, this does not mean that the wage losses suffered by some natives or the income gains accruing to other natives are not substantial. Some groups of workers face a great deal of competition from immigrants. These workers are primarily, but by no means exclusively, at the bottom end of the skill distribution, doing low-wage jobs that require modest levels of education. Such workers make up a significant share of the nation’s working poor. The biggest winners from immigration are owners of businesses that employ a lot of immigrant labor and other users of immigrant labor. The other big winners are the immigrants themselves.
The low-skilled workers, whether native, legal, or illegal, earn less; the bosses take him more. Why would the Times want to dwell on that?
ANEURYSM WATCH: This will be the one that kills Mickey:
In some cases, government programs have helped fewer families because of program changes and budget cuts, researchers said. For instance, the 1996 Clinton-era welfare overhaul drastically cut the cash assistance available to needy families, often ones headed by single mothers.
“As of 1996, we expected single mothers to go to work,” Professor Ziliak said. “But if they’re shelling out most of their weekly pay in the form of child care, they can’t make sense of doing it.”
That would be especially interesting if the Times could explain why the serious, economist-adjusted measure of poverty hit its '90's peak in 1994 at around 21% and has bounced around 15% for the last decade.