Harvard Prof.: Immigration Is 'Just Another Redistribution System' of a Half-Trillion Dollars

Craig Bannister | March 16, 2016

Immigration robs Americans of a half-trillion dollar each year and redistributes those wages to immigrants, Harvard economist Dr. George J. Borjas told a Senate hearing today.

Immigration is “just another government redistribution system,” Dr. Borjas testified:

“When I talk about gains to immigration, I am talking the way most economists are talking about it, which is the gains accruing to natives. And, by natives, I really mean the pre-existing population. That gain is very small; it’s $50 billion a year, in an $18 trillion economy.

“Now, what tells me, after I’ve looked at this for a while now, is that, what immigration really does is, not so much increase the pie, as redistribute wealth.

“So, what I’ve learned from all of this, is that immigration happens to come out to be just another government redistribution system”

 And, that redistribution is to the tune of a half-trillion a year, the Harvard economist explained:

“If we look at the impact of immigration over the last few decades in the U.S., one rough rule of thumb that comes out is that when you increase supply of workers in a particular group by around ten percent, the wage of that group will go down by three percent, which is not a trivial number.”

“Now what that would imply in terms of the net gain, is that the net gain to the U.S. economy is only around fifty billion dollars a year, and that is a number that comes straightforwardly out of the laws of supply and demand. And one of the lessons from that model that’s actually very difficult to manipulate the model in a way that would make that number much bigger. “

“So, we have a fifty billion dollar gain on net that accrues to natives and a huge redistribution [of wealth] from the people who compete with immigrants to the people who use immigrants of around half a trillion dollars a year. And that’s what the laws of supply and demand tend to imply.”