Lost in the rhetoric is a sharply contrasting narrative laid out by other respected economists, most prominent among them David Card of the University of California at Berkeley. Card, 62, himself an immigrant from Canada, is less in the limelight than Borjas, but he continues to contribute to debate on immigration, and he’s widely respected by peers.
Card said theories that an increasing labor supply powered by immigrants automatically leads to lower wages are “completely wrong.”
Immigrants today are 17 percent of the U.S. labor force, and the undocumented — who can be easier to exploit with lower wages — are about 5 percent, a proportion that hasn’t grown since 2009. While numbers have increased since 1970, immigrants as a percentage of the U.S. population are slightly less than they were in 1910.
Card, who was a consultant on the National Academy of Sciences report, said in an interview: “To the best of my knowledge, very few economists subscribe to the Borjas line. George is at the extreme end.”
“He’s a complete ideologue on the topic,” Card added. He noted that Borjas assisted former California GOP Gov. Pete Wilson’s 1994 re-election campaign, providing data portraying undocumented immigrants as a fiscal drain.
For close to three decades now, Borjas and Card and several others have been engaged in what for economists might be considered a duel.
Card, while at Princeton University in 1990, was credited with pioneering a “natural experiment” approach to studying immigration. Using Census survey data and economic modeling, he studied the wage impact of the 1980 influx of tens of thousands of Cuban refugees into Miami. The Mariel Boatlift from Cuba increased Miami’s labor pool by about 7 percent.
For Card, the influx was a unique opportunity to test assumptions that a greater supply of labor would push down wages for those most likely to compete with immigrants. But Card found “virtually no effect” on wages rates of less-skilled non-Cuban workers, and no substantial impact on the wages of Cubans already in the area when new refugees arrived.
“The data analysis suggests a remarkably rapid absorption of the Mariel immigrants into the Miami labor force,” Card wrote.
Borjas came up with his own models. In a 2003 paper published with the National Bureau of Economic Research, Borjas advanced a model to measure immigration impact by dividing workers into more distinct groups than other research, based on education level and experience. He found that immigration influxes between 1980 and 2000 reduced wages for native-born high-school dropouts by about 9 percent and about 3 percent for average wages for natives overall.
The battle continued. In a 2012 Journal of European Economic Association commentary, Card argued that Borjas’ 2003 research was flawed because Borjas assumed a “fixed” amount of capital over his 20-year study period. Without allowing for changes in investment, Card said, Borjas’ models resulted in wage drops. To understand why an economy absorbs labor, Card said in an interview, it helps to think about how technology, machinery, infrastructure and other investments — the “stock of capital” —help utilize labor without lowering wages.
Card also took exception to Borjas’ assumption that immigrant and native workers with the same level of education are perfect substitutes in the workplace. Economist Giovanni Peri at the University of California at Davis has advanced the argument that immigration prompts “task specialization” that lifts lower-skilled natives into complementary higher-ranking jobs—at restaurants or construction sites, for example—because of their English fluency, experience and other comparative advantages.
Still, the debate wasn’t over. In 2017, Borjas published a “reappraisal” that he claimed “overturned” Card’s 1990 Mariel findings. He found that wages for native-born high school dropouts in Miami fell by 10 to 30 percent after the refugee influx. Trump aide Miller pointed to Borjas’ study as evidence of wage suppression.
But others said Borjas’ dropout sample was so narrow — he removed women and Hispanics and ended up with fewer than 20 people per year — that “a researcher could hypothetically get any positive or negative ‘effect’ of the boatlift,” wrote economist Michael Clemens in Vox. Crucially, Clemens also argued, he and Rutgers economist Hunt discovered that population surveys began abruptly counting more black high-school dropouts in Miami after 1980, which had the effect of lowering average wages.
Borjas defended himself, blogging under the headline “More fake news about Mariel.” He created a chart excluding black dropouts, and still found wage decline. “Using the increase in the relative size of Miami’s black workforce after 1980 to dismiss my Mariel evidence performs the job of obfuscating the debate further, but does little to clarify,” he argued.
For laypeople, it can be challenging to unravel. And for the economists, that brings its own frustrations.
Card said he’s exasperated with media that bolster anti-immigrant positions with cherry-picked studies, as well as neutral media coverage that seeks out negative reports to balance positive studies without explaining nuances. “One competing study just cancels out another study,” he said of coverage.
As for Borjas, his biting blog indicates that he believes his research encounters unfair opposition. “We all know the party line by now: Immigrants do jobs that natives don’t want to do,” he wrote. “As a result, natives do not lose jobs, and natives do not see their wages reduced. And anyone who claims otherwise is obviously a racist xenophobic moron.”
The Academy's Review
Against that backdrop, the National Academy of Sciences report may provide the broadest overview of work on this subject. The academy is widely considered the nation’s premier arbiter of complex issues, and is frequently relied upon to sort through politically-charged claims.
In September 2016, the academy released its 643-page survey entitled “The Economic and Fiscal Consequences of Immigration.”
In addition to its specific findings on wages, the report concluded that: “Importantly, immigration is integral to the nation’s economic growth.” Panelists found that “immigration supplies workers who have helped the United States to avoid the problems facing stagnant economies created by unfavorable demographics — in particular, an aging … workforce.”
The academy further noted that “if the American economy grows and requires more workers both to replace those who retire and to create new firms and industries, the primary source of labor will be first and second-generation immigrants. This basic fact will hold at all levels, from low-skilled service jobs to professionals with postgraduate degrees.”
The NAS report also concluded that immigrants are a benefit to the federal government coffers but a mixed picture for states — at least at first, primarily because of needed investments in schooling. But as adults, the NAS panel says, “immigrants’ children — the second generation — are among the strongest economic and fiscal contributors in the population,” paying more in taxes than either their parents or other native-born Americans.
Borjas didn’t dissent from the panel’s conclusions, co-panelists said.
“We all agreed high school dropouts are affected. George would say a lot. I would say a little,” said Hunt, the Rutgers economist. “The preponderance of evidence is that native wages are not affected. George agreed with that.” Hunt noted that the biggest cohort of dropouts today is near retirement age; national estimates are that only 6 percent of people between the ages of 16 and 24 were dropouts in 2015 compared to 12 percent in 1990.
Blau noted that Borjas signed the report but “has chosen to simply emphasize his own findings subsequently.”