Nov 21, 2014 3:39 PM

White House: Immigration steps would boost wages

The Associated Press

WASHINGTON (AP) President Barack Obama's moves on immigration would expand the labor force and increase worker productivity, according to a White House report Friday that estimates average wages would rise over a 10-year period.

The president's critics and even some labor allies dispute that claim.

Obama's Council of Economic Advisers forecasts that as a result of his administrative actions, the gross domestic product would grow by $90 billion, or 0.4 percent, over 10 years, and wages would rise by 0.3 percent by 2024.

Obama's actions could spare nearly 5 million immigrants illegally in the U.S. from deportation and make them eligible for work permits.

The report aims to counter critics such as Sen. Jeff Sessions of Alabama, the top Republican on the Senate Budget Committee, who says Obama's moves would lower wages and cost American workers' jobs. AFL-CIO President Richard Trumka also said the president's effort to provide access to temporary visas could suppress wages in the high-tech sector.

Obama's plan promises to streamline some of the rules governing skilled immigrants making it easier for them to change jobs, for example and to provide new but unspecified immigration options for foreign entrepreneurs.

But the plan fell short of satisfying the tech sector, which has lobbied hard to raise the current annual limit of 65,000 so-called "H-1B" visas for skilled workers.

"This does little to nothing when it comes to the innovation economy," said Carl Guardino, CEO of the Silicon Valley Leadership Group, a trade organization.

Congress would have to approve legislation to raise the H-1B visa cap. Guardino complained in an interview that Obama did not push hard enough, earlier in his presidency, for a package of reforms that included H-1B expansion. He said prospects for Congressional action now seem slim.

A comprehensive Senate immigration bill that Obama pressed for would have increased the cap on those high-skilled worker visas. The Republican-controlled House refused to consider that legislation.

Ed Black, CEO of the Computer and Communications Industry Association, said in a statement that the administrative changes "can potentially act as a tourniquet to stanch the loss of foreign talent to other countries. However, we still need the surgery that only Congress can provide to achieve a real recovery."

White House economists said an increase in high-skilled immigration "would raise the real annual earnings of native college graduates by 0.4 percent by 2024."

An analysis by the nonpartisan Congressional Budget Office last year of a comprehensive immigration bill approved by the Senate concluded that bill would reduce all wages by an average of 0.1 percent over the first 10 years. That study said wages would then rise in 2025 and beyond.

White House economists, however, said that the wage drop forecast in that report was driven by lower wages for immigrants.

The economists also said Obama's measures would increase the tax base by billions of dollars because two-thirds of immigrants illegally in the United States work, but do not pay taxes. Under Obama's actions, immigrants who seek protection from deportation would receive a three-year work permit that would require them to pay federal, state and local taxes.

AP Technology Writer Brandon Bailey in San Francisco contributed to this report


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