Will The RAISE Act Raise Employment Prospects

Over the weekend the employment numbers for August were released; 156,000 jobs added might be okay if we are grading on a curve, but we are not. Despite the hyperbole that accompanied the release, 156,000 jobs (a number that will no doubt be adjusted downward as were June and July) underscores that our economy is treading water. In addition, wages were sluggish and according to CNBC, a drop in the length of the average work week means the average worker’s weekly paycheck shrank.

It is against this backdrop I want discuss again the RAISE Act. A month ago we did a blog focusing on the indirect environmental consequences of reducing immigration, ergo the benefits of the RAISE Act. Today, I would like to discuss in greater detail the Act’s benefits when it comes to labor, jobs and the economy.

Reforming American Immigration for Strong Employment, or RAISE Act as it’s title indicates is intended to create greater employment for US citizens by limiting the number of immigrants that arrive in the US each year. But is this feasible, even practicable? Perhaps it is, at least in the long run. For starters:

  • According to census data, immigrants admitted in the past two decades lacking a high school diploma have increased the size of the low-skilled workforce by roughly 25 percent. As a result, the earnings of this particularly vulnerable group dropped by between $800 and $1,500 each year.
  • Since 1970, the percentage of immigrants in the labor force has more than tripled.
  • In 2017, the labor force participation rate plummeted to its lowest level since 1977. Only 62.9% of the population held a job or was actively looking for one.
  • Between 1980 and 2000, immigration caused the wages of Americans without high school diplomas to decrease by over 7%, according to Harvard economist George Borjas.
  • High immigration cities like Los Angeles and Miami reduced low-skilled native workers’ wages by up to 3%, according to a University of California Berkeley study.
  • The unemployment rate for African-Americans is 9.1%, which is more than double the unemployment rate for immigrants at 4.4%
  • African American households earned a median income of $36,898 in 2015.  That is not only less than the median foreign-born household’s income of $52,295, it is less than the median noncitizen household income of $45,137.
  • When immigration increases the size of a worker group by 10%, African Americans’:
    • Employment rate drops 3.5%
    • Wages drop 4.0%
    • Incarceration rate increase 0.8%

The RAISE Act has several components that will certainly lower levels of immigration. In addition, the Act seeks to move immigration from a country quota system to a merit based system. There are of course pros and cons to the proposals put forward in the Bill and below is a summary of its major tenets:

Currently the US employs a “diversity” lottery program that admits green card applicants from traditionally low sending countries. The RAISE Act will eliminate this lottery that admits roughly 50,000 immigrants per year.

The Act will also cap refugee admissions at 50,000. This will be helpful. Given the US refugee program was a response to Cuban exiles in the 1950’s, Vietnam in the 1970’s, and strife in Lebanon and Latin America in the 1980’s and 1990’s, it makes sense to give the entire program a critical review.

This not a critique of the US asylum program. Asylies are typically reviewed on a case-by-case basis. But one must question large refugee admittance programs when it has been demonstrated that resources can be better used in sheltering refugees within bordering countries until such a time as hostilities cease and they can repatriate.

Another component of the bill is the curtailment of family reunification by eliminating family sponsorship beyond spouses and minor children of US citizens and/or permanent residents. In addition, the caps on family categories would drop from 226,000 to 88,000 green cards issued each year.

The RAISE Act will also introduce a point-based merit system into the process. Points are earned in several categories that include:

  • Age,
  • Education,
  • Extraordinary Achievement,
  • Job Prospects and,
  • Investment Potential.

For instance, a 19 year old with an associate’s degree, no job prospects, a working knowledge of English, and lacking $1.8 million to invest in a business that will employ 10 people will garner a total of 11 points. Contrast this to a 27 year old with a STEM master’s degree, fluent in English, and $1.8 million to invest in a business will garner 39 points. An applicant must have at least 30 points to qualify for admittance.

The US typically grants 1.5 to 1.25 million green cards each year. It is believed that the RAISE Act will drop those numbers 40% in the first year and by 50% over the course of 10 years. Immigrants are currently 13.3% of the US population, the highest rate in 105 years. 80% of US population growth is attributable to the immigrants and children of immigrants.

The consequences of unbridled immigration has led to:

  • Unabated and ever increasing loss of open space to development to make room for more housing, shopping and other types of support demanded by an ever increasingpopulation.
  • Wage stagnation and loss of hard won worker benefits and continued down ward spiral in our quality of life, i.e., happiness. These effects impact our most vulnerable populations.
  • Loss of democracy – greater populations but lower proportional representation and ever more alienated populations of new arrivals unable to effectively mobilize and work and stymie the plans of the corporatocracy.

From the 1924 through 1965, immigration to the US was restricted to less that 200,000 green cards issued each year. The Immigration Reform Act of 1965 created the unintended consequences that have increased immigration four fold.

Former Colorado governor Dick Lamm stated, “one of the great challenges to public policy is knowing when and how to change a successful policy grown obsolete.” The RAISE Act sponsored by senators Tom Cotton and David Perdue may be a way to meet the challenge of a public policy change that has outlived its usefulness.

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