THE BLOG
05/23/2014 04:41 pm ET | Updated Jul 23, 2014

What's Holding Back Immigration Reform?

I participated in a National Journal forum on immigration reform yesterday, led by the great Steve Clemons.

Given the discussion, I'd guess that anyone who didn't know the issue and happened to stumble into the event would be vigorously scratching their head to figure out why comprehensive reform wasn't the law of the land. Republicans and Democrats alike sung the praises of the policy; economists and policy analysts from both sides of the aisle, including yours truly, emphasized the policy rationales and cited supportive research (and we did not apply thumb to scale to do so; the majority of economic research is, in fact, positive re the impact of immigrant flows -- this CBO report is a typical take on the issue).

Even Mark Krikorian, the only overtly critical voice on the panel, counted himself among the 70 percent who support reform, though he doesn't endorse the Senate's approach.

And yet... nothing. Well, not nothing -- as noted, the Senate passed a comprehensive reform bill, one about which I've written favorably. But again, especially given the wide support by elites, the fact that Gov. Romney got merely 27 percent percent of the Latino vote, and the favorable polling even among Republicans, one might well expect that reform would by now be upon the land.

Perhaps the question of "why not" isn't very complicated. Though Republican leadership favors a bill, minority caucuses can easily and with impunity block legislation these days. There are always members opposing changes of this magnitude and the gridlock here may simply be a function of the unique inability of leadership to hold or discipline their caucus.

But I was struck by something else from the panel: the absence of any voices in this debate of those who at least perceive themselves to compete with immigrants in the labor market.

The economic literature generally shows that most native-born workers do not compete with immigrants: they are complements, not substitutes to immigrant labor. The groups most likely to compete with new immigrants, especially those from our south, are older immigrants and the dwindling share of native-born high-school dropouts. And the policy solution to help them is not to block immigrant flows but to provide them with the skills to become complements-to escape substitutability.

But to hear some on the panel talk, it was as if the U.S. labor market is suffering from large and persistent labor shortages, even-especially, according to one speaker-in the low-wage sector! If you listen between the lines, the view expressed here is implicitly, though very clearly: "people, if we don't increase immigrant flows, we're going to see wage pressures!"

Again, let me be very clear: I support comprehensive reform and not just because I think ours should be a welcoming country but also for sound economic reasons, not least of which is the negative impact on growth of our decelerated labor force growth.

But we do not face anything like a labor shortage in the near term, and there's absolutely no question that the U.S. job market has been extremely slack since the onset of the great recession seven years ago! The unemployment rate, which is itself biased down due to discouraged exits from the labor force, has been above the full employment jobless rate every quarter since 2008Q1, by as much as five percentage points in late 2009 (that's 7 million fewer people than should be at work) to about one point now (about 2 million).

In fact, one of the highly laudable aspects of the Senate bill is the new "W-visa" program for low-skilled guest workers, which embodies the recognition of the impact of immigrant flows on labor supply. These visas are initially capped at 20,000 but they go up over time. The act creates an oversight function-the Immigration and Labor Market Research Bureau -- whose job is to adjust the caps in local labor markets based on worker shortages and surpluses. (Yes, this implies control of our borders.)

It's easy to criticize elites as being out of touch but I was struck by the assumption that if only everyone just understood the CBO report and the rest of the policy literature, comprehensive reform would be the law of the land. Of course, most people's views on issues like this -- and everything else -- are formed by their personal experience. And from what I've heard over the years, there are a lot of people who believe immigrant competition has hurt them and there are no wage regressions that will change their mind.

Perhaps if advocates carried a bit more of those voices in our heads, we'd be able to understand at least one dimension of what's holding back reform. That realization won't get it over the goal line either, of course, but it might help us connect some critical missing dots, especially the ones that point toward the importance of much tighter labor markets as a big lever in immigration politics.

This post originally appeared at Jared Bernstein's On The Economy blog.

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