Don’t expect a bigger paycheck anytime soon. Fed Chair Janet Yellen recently admitted there might be far more “slack” in the labor market than she and her colleagues realized, meaning that employers can attract all the workers they need without raising wages.
This is a longstanding problem. Inflation-adjusted wages have climbed just 0.2 percent annually since 1973.
Several lawmakers on Capitol Hill plan to end this wage stagnation by transitioning to a merit-based immigration system. Limiting low-skilled immigration would make it easier for working-class Americans to find jobs and negotiate raises.
Each year, the US gives out more than 1 million “green cards,” permanently allowing foreign-born individuals to live and work in the United States. Only 140,000 of those are for highly skilled immigrants.
The current immigration system reserves two-thirds of all green cards for foreigners who already have extended family in the country without accounting for immigrants’ economic potential.
Because so many extended family members of immigrants possess few skills, they compete with the most vulnerable Americans for jobs.
This influx of workers has pushed many less-educated Americans out of the job market entirely. In the 1960s, 95 percent of male high-school dropouts were working or actively looking for jobs; today, only 80 percent participate in the labor force.
American workers also take a pay cut. Harvard economist George Borjas found Americans lose $402 billion annually in foregone wages as a result of competition from immigrant laborers.
Congress may soon consider a bill, the Reforming American Immigration for a Strong Economy (RAISE) Act, to relieve these Americans. The RAISE Act would cut the number of green cards by 50 percent by scrapping family-sponsored green cards, with notable exceptions. Recent immigrants would still be able to obtain green cards for their minor children and spouses but no longer be able to bring adult children and siblings.
People will receive points if they have high-paying U.S. job offers, fluent English language skills, and college degrees.
The RAISE Act would eliminate slack in the labor market, giving workers more leverage to demand raises.
Some special interest groups have expressed skepticism. They needn’t be concerned.
American universities worry the RAISE Act would disadvantage foreign students. Actually, the RAISE Act would benefit them because currently, those students often struggle to obtain work visas once they earn degrees.
The new system would award extra points to graduates of U.S. universities, giving them a leg up on graduates from foreign institutions.
Some agricultural firms fear the RAISE Act would jeopardize their labor force. Those concerns are similarly misplaced.
The agricultural industry doesn’t depend on green card holders. Out of more than 1 million green cards distributed in 2015, less than 4,200 went to immigrants in farming, fishing, or forestry jobs. The H-2A visa program, which lets firms bring in an unlimited number of guest workers for farm work, would remain untouched under the RAISE Act.
Our economy is changing. It’s becoming tougher for less-educated Americans to find decent-paying jobs. Reforming the legal immigration system would help these citizens while still attracting the best and brightest from around the world.
Deena Flinchum is an IT worker who was employed by the AFL-CIO for 25 years before retiring. She is now a community volunteer in southwest Virginia.