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National Academies Hides $500 Billion ‘Immigration Tax’ In 495-Page Report

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Officials at a prestigious private D.C.-based think-tank are trying to hide their data showing how immigration is imposing massive costs on wage-earners and on taxpayers.

The think-tank, titled The National Academies of Sciences, Engineering, and Medicine, is not a government-run agency. It is a privately run think-tank which writes politically influential reports for government and private-sector funders. For example, the group’s new Sept. 22 immigration study was funded by the pro-immigration John D. and Catherine T. MacArthur Foundation.

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The jargon-filled, much-caveated, 495-page report does show the information needed to measure how legal and illegal immigration transfers $500 billion a year from the wages paid to working-Americans towards companies, Wall Street investors and to new immigrants. But the report does not provide a dollar figure for the ‘immigration tax.’

Deep in the report, but not in the press release, it shows how each new unskilled immigrant costs state and local taxpayers $1,600 per year. It shows how the annual cost of legal and illegal immigration to state and local taxpayer is at least $57 billion, and that each unskilled immigrant is a net loss to taxpayers for the next 75 years.

Hundreds of pages inside the report, but not in the summary, it shows that the latest wave of legal and illegal immigrants are not integrating to the U.S. economy as fast as prior generations, and it shows that only university-trained foreign migrants pay more in taxes than they get in government aid once they win white-collar jobs sought by university-trained Americans.

The group’s hide-the-cost spin was copied by The New York Times and The Wall Street Journal — but the report was mostly ignored by other media outlets amid the turmoil in Charlotte and the 2016 presidential campaign. Also, Breitbart News detailed much of the bad news in the report, one day before it was published on Sept. 22.

The critical details are difficult to find in the long report, but a useful guide has been published by one member of the committee which wrote the report. Prof. George Borjas, a Harvard expert on immigration, posted his easy-to-use guide on his website. The guide says that,

Unfortunately the report does not give a transparent estimate of the size of the wealth transfer from workers to firms, reporting instead that, on average, wages went down by 5.2 percent. It would be better if they had reported the number of dollars involved in that transfer. That number, it turns out, would be about $500 billion.

Cheap immigrant labor creates an “immigration surplus” — but the surplus is only one-tenth the size of the transfer from wage-earners to investors, says the report.

To summarize, in this simple theoretical model of the labor market, the influx of immigrants initially drives down wages but native incomes still rise in the aggregate due to the immigration surplus … the immigration surplus arises because the labor supplied by new immigrants makes native-owned capital more productive. Restating, immigration raises the return to capital, making capital more productive and increasing income to owners of capital …  using this methodology, implies that the current stock of immigrants lowered wages by 5.2 percent and generated an immigration surplus of $54.2 billion, representing a 0.31 percent overall increase in income that accrues to the native population.

The report, says Robert Rector, an economist at the Heritage Foundation, also shows the only other gain from immigration is “through technology innovation generated by patents from technically educated immigration.” But, Rector said, few immigrants develop new technology.

The bottom line is that only about a fifth of immigrants coming in have a college degrees, so the overwhelming bulk of the immigration doesn’t have any relationship to technology change. So, by and large, they’re basically saying [in the report] that the bulk of immigration does not have positive effects.

Advocates of immigration, including the directors of the new study, are obscuring those aspects of the study by hiding the costs in vague languages, and by touting other aspects — that more immigrants increases the overall size of the economy or that wage-losses by some Americans are offset by the gains to other Americans who hire cheaper labor.

“To the extent that negative impacts occur, they are most likely to be found for prior immigrants or native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills,” said a statement from the National Academies of Sciences, Engineering and Medicine.

That vague and conditional sentence skirts a main conclusion that immigration cuts working Americans’ wages by roughly 5.2 percent per year, or a total of $500 billion per year. That $500 billion ‘immigration tax’ is scooped up by new low-wage immigrants and by the owners of companies which employ the new immigrants.

The committee’s leader added her pro-immigration spin to the press statement. “The panel’s comprehensive examination revealed many important benefits of immigration — including on economic growth, innovation, and entrepreneurship — with little to no negative effects on the overall wages or employment of native-born workers in the long term,” claimed Francine Blau, a professor at Cornell University. She did not describe the scale of the immigration tax or immigration’s impact on higher-skilled Americans.

When considering the costs to taxpayers, she hid her report’s data in more vague language. The “fiscal picture is more mixed, with negative effects especially evident at the state level when the costs of educating the children of immigrants are included,” she said.

But the study stretched out its economic forecast to three-quarters of a century, or 75 years, so that it could show some partial economic gains from low-skilled immigrants. “Projected over a future time horizon of 75 years, this analysis found that the fiscal impacts of immigrants are generally positive at the federal level and generally negative at the state and local level,” the statement said.  

Deep in the report, it says that state and local taxpayers lose at least $57 billion per year hosting the current wave of legal and illegal immigrants, because the migrants can’t earn enough money or pay enough taxes to fund the various benefits they and their children get from American taxpayers.

The group’s spin was accepted by The Wall Street Journal, which reported that;

“Immigration has little effect on the wages or employment levels of native-born Americans over the long haul and is a net benefit for long-term economic growth, according to one of the most comprehensive studies on the flow of workers into the U.S. …  The conclusion runs counter to a popular narrative suggesting immigrants take the jobs of U.S. citizens, though it does acknowledge some narrow costs. For example, the study highlights research showing that an influx of lower-skilled workers can lead to lower wages for earlier waves of immigrants and native-born high-school dropouts.

The New York Times also put a happy face on the report by printing the press statement’s description;

Do immigrants take jobs from Americans and lower their wages by working for less?

The answer, according to a report published on Wednesday by the National Academies of Sciences, Engineering and Medicine, is no, immigrants do not take American jobs — but with some caveats… 

• “We found little to no negative effects on overall wages and employment of native-born workers in the longer term,” said Francine D. Blau, an economics professor at Cornell University who led the group that produced the … report.

The Times‘ headline — “Immigrants Aren’t Taking Americans’ Jobs, New Study Finds” — is a diversion partly because the study’s main result was to show that Americans pay a huge cost for immigration via wage-cuts and increased tax expenditures, not via job losses. 

Outside immigration experts, such as Jason Richwine, for example, quickly summarized the government-spending side of the huge report.

In all eight of the NAS’s [economic] scenarios, immigrants without a high school degree have a negative long-term impact [on government budgets]. Immigrants with only a high school degree have a negative impact in seven out of eight scenarios. College graduates, by contrast, have positive impacts across the board. So despite the varying assumptions and wide-ranging findings, the NAS’s long-term fiscal analysis does have a consensus take-away: Low-skill immigration results in a net cost for taxpayers, while high-skill immigration produces a net gain. That’s a lot of work for a not-too-surprising finding.

Also, The Washington Times reported

Immigration drains the government, sapping as much as $296 billion a year from federal, state and local taxpayers while depressing wages, at least in the short run, according to an authoritative study released Wednesday by the National Academies of Science, Engineering and Medicine.

 Breitbart News has also shown how immigration slams white-collar workers.

 


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