Flawed Claims of Improved Earnings of Amnestied Aliens


The CAP Campaign to Counter Arguments against Amnesty

The left-wing Center for American Progress (CAP) recently released a polemic arguing that a general amnesty should again be adopted — like the one in 1986 — because it would be a boost to the U.S. economy.1 This campaign is an effort to counter the findings by FAIR, the Center for Immigration Studies and the Heritage Foundation that the amnesty proposal would have a profound negative budgetary impact. CAP relied on flawed analysis to justify its conclusion that an amnesty would benefit the economy. It treated illegal alien residents as if they were the same as legal immigrants and a benefit to the economy. This deliberate conflation of illegal aliens and legal immigrants is designed to support CAP's political goal of enacting another amnesty in 2013.

Illegal aliens have a very different economic profile than legal immigrants. The act of making illegal aliens into legal residents by an amnesty does not change their human capital and suddenly make them greater contributors to the economy the same as immigrants sponsored by an employer. While all workers contribute to the Gross Domestic Product, that is not the same as saying that low-wage workers contribute as much as middle or high-wage workers or that they are not a fiscal burden on the U.S. taxpayer.

One of the studies cited by the CAP report in support of its misleading assertion, was research by UCLA Professor Raúl Hinojosa-Ojeda published by CAP in 2010.2 Hinojosa argued that, "The historical experience of legalization under the 1986 Immigration Reform and Control Act, or IRCA indicates that comprehensive immigration reform would raise wages, increase consumption, create jobs, and generate additional tax revenue." The problem with that assessment of the IRCA amnesty is that it is counter-factual.

To support his rosy conclusion, Hinojosa cited a survey of the legalized IRCA beneficiaries done five years after the amnesty.3 But, he either did not understand the findings of that survey report or chose to mischaracterize them. The survey report did find that real wages for the amnesty recipients had increased, but they had not increased any more than they had for comparable U.S. workers (non-supervisory, non-farm, wage earners). Both groups experienced wage increases of 15 percent over the period. Therefore, it was the change in the general economy that produced wage gains, not the amnesty. Similarly, the survey found that the earnings gap between amnesty recipients and other wage earners continued to exist despite the intervening five years of legal status for the former illegal aliens.

Even more significant, the 1996 study found that there was a significant difference between the amnesty recipients who were visa overstayers — mostly foreign students — and those who entered without authorization. The former were better educated and were more likely to speak English well. These overstayers did experience some earnings benefit from the amnesty relative to other workers. However, the fact that this group gained while overall the amnesty beneficiaries did not gain, means that the non-overstayers lost ground economically over the five-year period following the amnesty. A possible explanation for that lost ground was the surge in new illegal immigration touched off by the adoption of the amnesty that created greater job competition for low-wage workers.

An even more troubling conclusion from the 1996 survey is that its findings related to an unrepresentative sample of the 1986 amnesty beneficiaries. Though not the fault of the administrators of the survey, it did not include data collected from the two-fifths of the amnesty recipients who gained legal status as a result of their working in the agriculture sector. It is reasonable to assume that the profile of those who entered the country illegally and were included in the survey was also representative of those who applied for amnesty as agricultural workers — though one could make the argument that agricultural workers as a group had even less education and work skills.

Accordingly, it is also reasonable to assume that the bulk of the amnesty recipients — combining the two-fifths not in the survey with those in the survey who had similar characteristics — lost ground economically when compared to others in the workforce. Recognition of this phenomenon is particularly relevant to the current amnesty discussion, because any new legislation is likely to again include special provisions for illegal aliens who have worked in agriculture.

Hinojosa would not have had to look far in the survey report to find evidence that it did not justify his rosy assessment. The following are quotes from the 1996 survey report:

"... by 1992, the likelihood of unemployment was higher for legalized than for other U.S. men — a reversal of the pattern seen prior to legalization."

"Legal status, employment, and long hours of work notwithstanding, many of those admitted under section 245A have had difficulty keeping their families out of poverty."

"Receiving only a grade school education in a non-English-speaking country is likely to afford the entrant little mobility in the U.S. labor market. IRCA-mandated English language classes have not altered this situation. In 1992, nearly one-quarter of all legalized adults still reported that they spoke no English."

"...data show that the sufficiently skilled were often able to find better jobs without work authorization, while the most unskilled could not do so even with appropriate documents."

 "...in 1991, 34 percent of legalization families, as compared with 17 percent of families nationwide, lived on annual incomes of less than $15,000."

 "Thus in 1992, after 5 years of legal U.S. residence, a disproportionate share of legalization families were still below the poverty threshold."

Conclusion

The data on the amnesty recipients five years after legalization clearly suggest a conclusion diametrically opposed to the characterization given to those findings by Hinojosa: Most beneficiaries of the 1986 amnesty had not become greater economic contributors as a result of the amnesty. Rather, their marginal participation in the economy meant that when they became eligible to draw on social service programs available to them after five years as legal residents, they became much more of a fiscal burden on the U.S. taxpayer at the federal, state and local level.

 

April 2013




  1. Fitz, Marshall et al., "Immigrants Are Makers, Not Takers," Center for American Progress, February 2, 2013.
  2. Hinojosa-Ojeda, Raul, "Raising the Floor for American Workers: the Economic Benefits of Comprehensive Immigration Reform," Center for American Progress, January 2010.
  3. Smith, Shirley, et al., op. cit.