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WSJ: Arizona’s Pro-American Immigration Reform Boosts Wages, Productivity, Housing

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A prestigious economic analysis commissioned by the Wall Street Journal shows that Arizona’s low-pressure immigration reform has raised Americans’ salaries and farmers’ productivity, and has also cut taxpayers’ welfare, medical, prison and housing costs.

The list of benefits is especially significant because the nation is heading into a 2016 election that is deeply shaped by raucous debate over the federal policy of annually inviting  1 million legal immigrants, 700,000 temporary workers, plus many illegal immigrants, to compete for jobs sought by the 4 million Americans who enter the job market each year. Both Donald Trump and Sen. Ted Cruz have posted ambitious immigration-reform plans.

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Arizona’s immigration reforms began in 2004, and the state’s population of roughly 450,000 illegals gradually dropped by roughly 180,000 people from 2007 to 2012, the WSJ reported.

Because of the 40 percent drop in illegal labor, the wages earned by Americans rose significantly, the analysis by Moody’s Analytics.

The median income of low-skilled whites who did manage to get jobs rose about 6% during that period, the economists estimate … wages rose about 15% for Arizona farmworkers and about 10% for construction between 2010 and 2014 … Some employers say their need for workers has increased since then, leading them to boost wages more rapidly and crimping their ability to expand … graduates [at a federal job-training center] now often mull two or three jobs offers from construction firms and occasionally start at $14.65 an hour instead of $10 …  At DTR Landscape Development LLC, the firm’s president, Dick Roberts, says he has increased his starting wage by 60% to $14.50 an hour because he is having trouble finding reliable workers.

The departure of foreign migrants also cut the state government’s welfare costs by roughly $430 million per year, the WSJ reported.

The number of students enrolled in intensive English courses in Arizona public schools fell from 150,000 in 2008 to 70,000 in 2012 and has remained constant since. Schooling 80,000 fewer students would save the state roughly $350 million a year, by one measure … annual emergency-room spending on noncitizens fell 37% to $106 million, from $167 million. And between 2010 and 2014, the annual cost to state prisons of incarcerating noncitizens convicted of felonies fell 11% to $180 million, from $202 million.

Housing costs also dropped, making it much easier for better-paid young Americans to marry, have children and launch themselves into a middle-class life. That’s likely a long-term boon for the local GOP, because family homeowners are much more likely to vote GOP.

“It was like, ‘Where did everybody go?’ ” says Teresa Acuna, a Phoenix real-estate agent who works in Latino neighborhoods. Real-estate agent Patti Gorski says her sales records show that prices of homes owned by Spanish-speaking customers fell by 63% between 2007 and 2010, compared with a 44% drop for English-speaking customers, a difference she attributes partly to financial pressure on owners who had been renting homes to immigrants who departed.

The rising in wages and loss of cheap labor also forced local companies to invent or buy new machinery that will boost productivity and allow farms to beat their low-wage, labor-intensive competition in Mexico.

After Arizona passed a series of tough anti-immigration laws, Rob Knorr couldn’t find enough Mexican field hands to pick his jalapeño peppers. He sharply reduced his acreage and invested $2 million developing a machine to remove pepper stems. His goal was to cut the number of laborers he needed by 90% and to hire higher-paid U.S. machinists instead …

He says mechanization is his future. He continues to pour time and money into a laser-guided device to remove stems from peppers, which pickers now do by hand in the field. Another farmer in the area developed a mechanical carrot harvester.

Mr. Knorr says he is willing to pay $20 an hour to operators of harvesters and other machines, compared with about $13 an hour for field hands. He says he can hire skilled machinists at community colleges, so he can rely less on migrant labor.

All those economic, social and technological benefits emerged from only a 40 percent drop in illegal population caused by the state’s modest reforms, and despite President Barack Obama’s refusal to seriously enforce popular federal laws intended to bar illegal migration. Also, there was no recorded drop in the annual inflow of legal immigrants. The state reforms only “barred [illegals] from receiving government benefits, including nonemergency hospital care … drivers’ licenses and … in-state tuition rates.”

The editors at the WSJ, which favors open-borders, however did highlight what they think is a greater economic harm to the overall economy caused by the reform. That harm was felt by major companies and the government because fewer illegal workers means higher wages, fewer consumers, lower profits and less tax revenue and fewer government employees who tend to vote Democratic.

Moody’s Analytics looked at Arizona’s economic output for The Wall Street Journal, with an eye toward distinguishing between the effects of the mass departures of illegal immigrants and the recession that hit the state hard beginning in 2008. It concluded that the [migrant] departures alone had reduced Arizona’s gross domestic product by an average of 2% a year between 2008 and 2015. Because of the departures, total employment in the state was 2.5% lower, on average, than it otherwise would have been between 2008 and 2015, according to Moody’s.

Immigration reformers have a simple response — what’s the harm if the pie is smaller when Americans are getting larger slices?

“Even if the size of the state’s [overall economy] decreased, the decrease in immigration redistributed income from employers to employees, particularly at the bottom end of the labor market,” says Steven Camarota, research director of the Center for Immigration Studies, in Washington, which favors reduced illegal immigration. “That’s a good deal.”

The report is likely to help advocates for reform, including Camarota’s CIS, which also favors a reduction in the annual inflow of 1 million legal immigrants per year.

Those 1 million immigrants compete for jobs – and so drive down wages — for the roughly 4 million Americans who join the workforce each year. The competition for jobs is also sharpened by President Barack Obama’s pro-immigrant policies, by the annual arrival of 700,000 temporary guest workers, and the long-term residence of roughly 650,000 foreign college-graduate guest-workers.

So far, both Donald Trump and Sen. Ted Cruz have promised to enforce immigration laws that would reduce the number of working foreign migrants in the United States. Both Trump and Cruz have put their immigration-reform plans online.

However, Trump’s campaign has recently stated he would support a reduction in legal immigration, down from the current inflow of 1 million per year. “I will support legislation to reduce the numbers, and will oppose legislation to increase the numbers … my suggested reforms include a requirement to give all open jobs to Americans first — instead of importing foreign replacements,” the Trump campaign told Breitbart.

In contrast, Obama and his business allies and his progressive allies wish to sharply increase immigration, and argue that Americans have no right to limit immigration.

“Sometimes we get attached to our particular tribe, our particular race, our particular religion, and then we start treating other folks differently,” Obama declared in 2014. ” That, sometimes, has been a bottleneck to how we think about immigration … there have been periods where the folks who were already here suddenly say, ‘Well, I don’t want those folks.’ Even though the only people who have the right to say that are some Native Americans.”

 

 


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