WSJ Editorials vs. Reality

The Wall Street Journal grabbed a study and ran off to a conclusion; unfortunately, the conclusion doesn't follow the results of the study.

While politicians haggle over immigration reform, the U.S. economy's demand for workers foreign and domestic continues to grow. On Monday U.S. officials began accepting applications for the 85,000 available H-1b visas -- the kind that go to foreign professionals -- for the fiscal year starting in October. By Tuesday, the quota had been filled, making this the third straight year that the cap was reached before the fiscal year had even begun.

It's another example of the disconnect between immigration policy and labor market realities. A common assumption of immigration critics is that alien workers are either stealing American jobs or reducing home-grown wages. But both notions are flawed, according to a new and illuminating study by economist Giovanni Peri for the Public Policy Institute of California.

...thus spake the WSJ.

And here speaks the informed observer, a faculty member at the very same U of Cal campus as Prof. Peri:

Peri's thesis is that immigrants and natives play complementary roles with respect to each other, rather than competing with each other. He makes this conclusion by observing certain patterns in the data, but actually the conclusion is invalid.

Let me explain why, using something the WSJ cites from the study, which is that larger percentages of immigrants have PhDs than do natives. Peri's point is that the data patterns show that a higher percentage of immigrants want to study for a PhD while a lesser percentage of natives do, so that they are complementing each other.

But as readers of this e-newsletter know, the governmental National Science Foundation brought in foreign students and foreign professionals for the express purpose of keeping PhD wages down. And most significantly, the NSF projected, quite correctly, that this suppression of wages would drive away Americans from pursuing doctoral study. So the immigrants and natives aren't playing complementary roles at all. --Norm Matloff, Ph.D., UC/San Diego

The WSJ doesn't mention that starting salaries for PhD (and MS) Electronics/Electrical engineers have not risen for the last several years. Surely, the Blatt das Kapital knows that prices rise in a shortage, no?