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What's immigration's real impact on U.S. wages?, Money Watch

President Donald Trump claims that curtailing immigration will boost workers' wages. That's the premise -- and the name -- of the RAISE bill two GOP senators introduced Wednesday, which aims to cut legal immigration to the U.S. in half and change the criteria on which immigrants are admitted.

Grappling with issues of immigration is a time-honored tradition in the U.S., which has absorbed successive waves of immigrants who then, after a suitable period of time, attempt to close the gates to the waves coming after them. But the economic evidence to back up this habit is decidedly mixed.

It's broadly accepted that immigration has a positive effect on the economy as a whole. Immigrants spend money on goods and services, start businesses, pay taxes and invent things. And most studies of immigration and wages have shown little or no effect: Immigration doesn't raise wages on average, but it doesn't decrease them, either.

However, some evidence exists that an influx of immigrants into low-skilled or low-paid jobs can depress wages for a particular group of native-born workers: high school dropouts.

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More recent work has found the opposite. Abigail Cooke, an assistant professor of geography at the University of Buffalo, looked through 18 years of data on employment, focusing on immigrant diversity (meaning having a large portion of immigrants as well as immigrants from many different places).

That study found high diversity actually increases wages overall and has no effect on for low-skilled workers. "I don't see any evidence that this is dragging people's wages down," Cooke told CBS MoneyWatch. "I think that some of the worries that immigrants, and specifically low-skill immigrants, are the reason people's wages are stagnating, are just pointing the finger in the wrong direction."

Published Auguest 3, 2017

Money Watch

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