Below is a link to to the paper, after the executive summary there is an appendix which highlights some of the more pertinent information from the paper and Rob has blogged on the paper here.

Paper: The Impact of Immigration and Immigration Reform on the Wages of American Workers

Executive Summary

As the debate on comprehensive immigration reform has been rejoined, alarming amounts of misinformation are being presented as facts.  This report corrects some of this misinformation by reviewing the empirical evidence and evaluating the real economic effects of the recent waves of immigrants into the United States by analyzing the role of immigrants in our labor markets and economy.

This report presents an accurate portrait of our immigrant population, dispels misconceptions about undocumented immigrants, and reviews the evidence and analysis regarding the wage and other economic effects of both immigration and reforms to provide undocumented immigrants a path to legal status.

• Immigration Population Demographics: More than one-third of recent immigrants come from Asia and Europe, while less than 57 percent come from Mexico and Latin America. A substantially larger share of immigrants than native-born Americans lack a high school diploma; but roughly equal shares of both groups — between 28 percent and 30 percent – hold college or graduate degrees, and more than half of immigrants from Asia are college-educated or better.

• Misconceptions about Undocumented Immigrants: Two-thirds of immigrants are naturalized citizens or legal permanent resident aliens, 4 percent have legal status as temporary migrants, and 30 percent are undocumented. While undocumented male immigrants are generally low-skilled, they also have the highest labor participation rates in the nation: Among men age 18 to 64 years, 94 percent of undocumented immigrants work or actively seek work, compared to 83 percent of native-born Americans, and 85 percent of immigrants with legal status.

• Economic Analysis on the Impact of Immigration on Wages: A careful review shows that high levels of immigration have not slowed overall wage gains by average, native-born American workers. Most studies suggest that recent waves of new immigrants are associated with increases in the average wage of native-born Americans in the short-run and with even larger increases in the long term as capital investment rises to take account of the larger number of workers.

• The Wage Impact of Reforms to Provide a Path to Legal Status for Undocumented Immigrants: The largest effects of such reforms would be felt by immigrants themselves: After the 1986 immigration reforms, wages rose by 6 percent to 15 percent for previously-undocumented male immigrants and by 21 percent for previously-undocumented female immigrants. Those reforms also increased wages of previously legal immigrants. Research also suggests that those reforms led to modest wage gains by native-born Americans.

• Other Economic Effects of Immigration: Studies have found that immigrants are 30 percent more likely to start new businesses than native-born Americans; and even immigrants without high school diplomas, who account for 31 percent of all immigrants, comprise 27 percent of immigrant business owners. Various analyses of the fiscal effects of immigration have produced mixed results on the state and local levels; but studies show that immigrants have a net positive effect on the federal budget. Moreover, immigration reform would enhance these positive fiscal effects by indirectly raising the taxable incomes of immigrants and others.

Appendix: The Impact of Immigration and Immigration Reform on the Wages of American Workers

Executive Summary:

Fueled by huge waves of recent immigration from the Americas and the Caribbean, the rapid growth of the U.S. Hispanic community is perhaps the most important American demographic story of the 21st century. At 15% of the US population today, Hispanics are now America’s largest “minority” group. One in ten Americans today is of Mexican descent, and the US now has the 2nd largest Hispanic population of any nation in the Americas. Over time this fast-growing population will grow to almost 30% of the total U.S. population, and will be the central driver in turning America into a “majority minority” nation by 2050.

Not surprisingly, this very rapid and profound population change is shifting political alignments in the U.S. Early in this decade George W. Bush’s remarkable success with this new community and electorate was critical to both of his Presidential victories. In 2005, however, the national Republican Party repudiated the modern, successful Hispanic strategy championed by the Bush family, and adopted a much more anti-immigrant, anti-Hispanic strategy. This approach was instrumental in fueling the massive immigration rallies in the spring of 2006, and swinging Hispanics significantly to the Democrats and increasing their turnout in the 2006 elections. The Republican Party’s gains in this critical new part of the American electorate were lost.

The 2008 cycle saw a continuation of this new potent dynamic – an anti-immigrant, anti-Hispanic national GOP, and a Democratic Party embracing, tentatively, the new demographic realities of the 21st century and one of its most visible battlegrounds – immigration reform. Once again the Hispanic electorate stayed with the Democrats and increased their share of the overall electorate. This emergence of a new, highly energized and pro-Democratic Hispanic electorate had an enormous impact on the 2008 presidential election. In six battleground states critical to the Electoral College – Colorado, Florida, Indiana, New Mexico Nevada and Virginia – increases in Hispanic turnout and a significant vote swing to Democrats helped tip these states from Republican to Democrat. This swing of Latino votes—as it was for George Bush in 2000 and 2004—was instrumental in electing Barack Obama to the White House in 2008.

In the span of just the last three Presidential elections, the Hispanic share of the American electorate has grown 80 percent, from 5 percent in 2000 to 9 percent in 2008, a sweeping and historic development.

The evidence of the rising political and cultural influence of America’s growing Hispanic population is all around us. In the 2008 Presidential election, each political party conducted an entire Presidential debate in Spanish, the Democratic Party fielded the first major Hispanic Presidential candidate, added a heavily Hispanic state, Nevada, to its early primary mix, and held its convention in Denver, a central spot in the new Southwestern Latino battleground. In 2009 the first Hispanic in American history, Sonia Sotomayor, was appointed to the Supreme Court. President Obama has appointed a record number of Hispanics to his Administration, including prominent Cabinet positions. Florida Senator Mel Martinez recently served as Chairman of the Republican National Committee, and New Jersey Senator Bob Menendez now runs the Democratic Senatorial Campaign Committee. Spanish is now commonly spoken and used by leading politicians and their offices across the country. After years of protest, Time Warner had the good sense to remove Lou Dobbs, the most virulent anti-immigrant voice in mainstream media, from CNN. America’s relationship with Mexico—a country which has now provided so much of our population but long been distant in the American imagination—is going through an historic warming period. The coming reapportionment and redistricting will further shift political power to Hispanic regions of the country, and Hispanic regions within states.

Data from this election cycle show that the Hispanic community is still with President Obama and the Democrats and still wary of the GOP, but their intention to vote this fall trails far below the national average. For a community that has voted in very high numbers in recent elections, this is a change, and perhaps a sign of their disappointment in Washington’s continued inability to resolve the issue so close to their communities and their families – immigration reform. How the two political parties manage this issue this year and in the years ahead—particularly given the fuel a new law in Arizona has added to the fire—will be critical to shaping the Hispanic population’s future political path, and, given their numbers, perhaps the nation itself. This next chapter of “Hispanics Rising” has yet to be written, but may be the most important yet.

Electricity 2.0 (pdf)

America and the world stand on the brink of a revolution. That revolution—in how the world creates, trades, and consumes energy—has the potential not only to aid the environment but also to lower the risk of war, create wealth, democratize energy, and empower people everywhere as never before. While this revolution is generally associated with the term ‘clean energy’, the issue is deeper: How to reinvent the energy network and democratize global energy.

Many fuel sources make up the world’s energy supply, but at its heart lies one network—the electricity network. Electricity forms the backbone of the world’s wider system of energy exchange because it is electricity that links other networks, such as oil shipments, gas pipelines, and coal trains. It is electricity that converts the energy captured in prehistoric plants, rushing rivers, and the atom into flowing electrons and enables that energy to move not at the speed of a tanker or truck but virtually instantaneously. It is thus unique in allowing falling water in one time zone, for example, to light up a city in another.

Like other networks—the telecom network, the network of roads and rails, and commercial networks—the electricity network or ‘grid’ creates value by linking people. However, heavily regulated, undersized, short on intelligence, and long on red tape, today’s grid has become a barrier to the clean and efficient flow of energy.

While the network has many physical deficits, its real problem is not physical at all. Its real problem is systemic: It is supported by a system that, rather than encouraging change and innovation actively thwarts them. Many problems afflict the current system, including bias against new clean technologies and renewable power. But all such problems share a common solution: Tear down the walls to the energy network.

To understand why progress in the United States has been so elusive, NDN and the New Policy Institute embarked upon an extensive study of the implementation of clean power and technology in America. Our findings suggest that the slow progress to date is not due to a lack of will or money but, rather, to a central and pervasive problem—the structure of the power industry in the United States.

Our research suggests that key structural roadblocks are blocking progress. These roadblocks stem from the extraordinarily complex structure of the American power industry, and they are blocking the uptake of clean technology and the deployment of renewable resources.

Just today we learned that new residential construction fell again last month, while home foreclosures continue to rise.  It could hardly be otherwise: Washington has still done little to address the pressures from falling home prices colliding with rising mortgage payments, even though they were the largest single factor in the financial meltdown. We did warn that the government’s housing plan wouldn’t work:  A small government benefit to encourage banks to offer better terms to strapped homeowners couldn’t overcome the basic rule that anymore facing foreclosure becomes a poor credit risk, and banks don’t refinance mortgages for poor credit risks.  So, as jobs have continued to disappear and incomes fall, foreclosures continue to rise.  We could still declare a brief moratorium on foreclosures while putting in place some measures that might actually work – for example, directing Fannie Mae, which we taxpayers now own, to provide better terms to strapped homeowners whose mortgages are held there.

Washington also gave financial institutions hundreds of billions of tax dollars without ever requiring them to get rid of their toxic assets and reboot credit to businesses – and so, they largely didn’t.  Now, as foreclosures continue to rise, they face more losses from the mortgage-backed securities and their derivatives they still hold.  Those losses will continue to limit the credit flows needed to keep the economy going once the stimulus fades.  And that doesn’t factor in the increasing pressures on financial institutions from growing problems with commercial real estate.

And by the way, oil prices are up to $80 per-barrel again and headed higher if the dollar continues to weaken.  You may have forgotten, but it was the run-up in oil price in 2007 that actually triggered the recent recession, with the financial crisis coming a little later and making it so much worse.  If oil prices keep on rising now, on top of weak credit flows and anemic consumer spending, and the economy heads down again, its trajectory could well be even worse this time, since it will come in the context of already weak demand and high unemployment.

This possibility brings us to Washington’s largest failure of all – okay, the second largest after its astonishing incompetence dealing with the financial bubble and bust.  Throughout the last expansion, Washington sat on its hands as jobs continued to disappear for two years after the 2001 recession ended, and then finally began to grow but at less than half the rates seen in the 1990s and 1980s.  This political failure means that we now face double-digit unemployment for a long time, even if we manage to avoid returning to recession.

At least the administration and Congress finally are noticing the jobs problem.  What we don’t know is whether they’ll do anything effective to address it.  They have real options here.  For example, for the short-term, they can provide more money to states squeezed by falling revenues and balanced-budget requirements, so the states can keep their teachers, police and other employees working.  An even better idea would be to jumpstart new job creation by exempting the first few thousand dollars of wages from payroll taxes.  And they could pay for it with a small, Tobin-type tax on financial transactions.

What really scares me and some other economists, however, is the possibility of another large shock to the financial system.  For example, while it’s not likely, we could see a sudden collapse in the markets for securities backed by commercial mortgages.  The real nightmare on Wall Street, however, is an international crisis that suddenly drives up the dollar’s value.  That would present terrible problems, since much of the near-record profits being reported by Goldman “We’re doing God’s work” Sachs and others come from nearly a trillion dollars in complicated financial plays that depend on a weak dollar.

If this somehow should come to pass, Washington’s incapacity to deal effectively with the recent crisis will create very scary scenarios.  At a minimum, even President Obama’s legendary skills of persuasion won’t be enough to convince the public to bail out Wall Street a second time. It’s may not be too late, however, for the administration and the Fed to privately jawbone Wall Street to reduce this new risk exposure – and ours. Whether they’re willing to accept smaller bonuses, which usually come with less risk, could be a good test of whether they deserve to ever be rescued again.

This is yet another example of the very smart 21st Century Statecraft being plied by the Clinton Department of State. Rather than limiting ourselves to interacting strictly with the governments of foreign countries, we can engage directly with people around the world. By lending credence to China’s bloggers, we help them in their effort to become a respected and efficacious voice for change in their own country. Even in cases in which our own objectives don’t quite line up with the ideals of the bloggers themselves, empowering a multitude of voices is a big step in the right direction.

We do, naturally, seem to be getting a bit of pushback from Beijing. When he stops in Shanghai next week, President Obama is hoping to hold a town hall meeting with Chinese youth in his typical free-flowing, agenda-free format.  Rumors abound that the Chinese and U.S. officials are having some trouble agreeing on the terms for the event, and it may be scuttled as a result. Fine. I, for one, would rather see the town hall ditched than see a phony compromise event in which the attendees have no freedom to speak their mind.

A trailer for the film is below, and we’d encourage you to visit the film’s website to learn more about 9500 Liberty.

These are my thoughts, at least, reading a new piece from Eugene Steuerle, a tax economist at the Urban Institute with a knack for collecting data that can help us see the world in fresh ways.  From the data Steuerle presents, we can calculate that within just five or six years, the average middle-class family will have to devote nearly one-third of its income to health care costs.  That’s right: one-third.  According to the CBO, the average family will earn $54,000 a year in 2016, when a moderate-priced family policy will cost $14,700.  Employers will pay much of that insurance bill for most middle-class families; but that’s just a mask, since those employer payments come out of people’s wages, not a company’s profits.   In real effect, a middle class family’s earnings in 2016 will come to $68,700 ($54,000 + $14,700), of which $14,700 or 21.4 percent will go for health insurance.  And that won’t be their only health-related costs.  Their co-payments and other uninsured expenses, on average, will come to another $5,100.  They’ll also be paying taxes to help cover other people’s health care – 2.9 percent of their cash wages for Medicare ($1,566), plus perhaps $750 more in federal and state income taxes for Medicaid and for Medicare costs not covered by the 2.9 percent payroll tax.  Add up all of that, and it comes to $22,116, or 32.2 percent of the middle-class family’s adjusted income of $68,700.

While Steuerle is concerned – rightly so – about provisions in health care reform that will treat people with the same incomes differently, depending on the rules the legislation applies to employers, I’m more incensed about the current, raw deal for middle-class Americans.  Why should an average family expect to pay one-third of its income in 2016 on a health care system which, in that same year, should claim only 16 percent of our GDP?   The biggest part of this puzzle lies in the fact that most of the costs are roughly the same for most people, regardless of their income.  The worker earning $68,700, a manager who makes $100,000, and the company’s CEO who earns $1 million all will pay the same $14,700 for their families’ health coverage. Their out-of-pocket expenses do rise with income but not by very much; and while the manager and CEO pay more Medicare taxes than our average worker, they all pay at the same 2.9 percent rate.  There also are other factors which reduce the burden on other groups – and so tacitly increase it for those middle-class families.  For example, people on Medicare and Medicaid bear much lower insurance costs, although they also pay relatively more for their out-of-pocket expenses; and families without children pay relatively less for both insurance and out-of-pocket expenses.

Whatever the causes, the data show clearly that health care costs have become a core economic issue for middle-class Americans.  Unless we can contain them, and over time even reduce them, realistic prospects of upward mobility for most middle-class families will simply slip away.   Health care, in short, has to be an essential part of a new economic strategy.

The last political upheaval over the economic prospects of the middle class began with Proposition 13 in California and went on to fuel a conservative realignment that held sway for a quarter century.   The next one may well have begun already with these unsustainable health care costs.  President Obama, whose talent for reading the American mood equals Ronald Reagan’s, has tried to respond quickly with several reasonable ideas for cost containment.  His proposals went nowhere when healthcare providers and insurers countered by, in effect, threatening to withhold people’s care.  The next time, this issue will be recast in terms that everyone understands – people’s real incomes – and the results could be very different.

Last week, the Indian government walked back on technological freedoms in Kashmir, banning pre-paid mobile connections. In Kashmir, as in much of the developing world, pre-paid is a popular option thanks to its known costs, and low commitment; the new ban will take phones out of the hands of 3.8 million Kashmiris. Unsurprisingly, hundreds of Kashmiris have taken to the streets of Srinagar, the capital city, to protest the law in recent days.

The stated reasons for the prohibition are that mobile vendors are not conducting proper background checks on new subscribers, and that militants are using mobile phones to detonate bombs– a practice observed in Iraq and Afghanistan in recent years. I suspect the actual reasons are considerably more Machiavellian.

Srinagar is one of the most heavily-militarized cities in the world, and the dense presence of Indian troops has led to frequent clashes between Kashmiri civilians and the military. As the BBC documented earlier this year, young Kashmiris have been using their cell phones to bear witness to the disproportionate, often unprovoked violence of the Indian army. With a camera phone in every hand, every citizen is a journalist, and the explosion of photos, videos and other first-hand accounts of the violence in Kashmir has brought images of the violence to the world.

What’s more, the Indian intelligence services have met with some success finding and killing militants by monitoring the cell phone conversations of Kashmiris. The consistency and higher background-check requirements for post-paid cell phone plans makes it much easier to monitor those subscribers.

It’s my strong suspicion that the pre-paid ban in Kashmir has more to do with suppressing critical citizen media and monitoring civilian phone conversations than it does with preventing phone-bomb attacks. The ban consists of a suppression of basic freedoms and a violation of privacy in an already repressed state. Further, the government is denying citizens a valuable tool for economic development and access to the global ICT network– increasingly a fundamental right in itself.

FD: I spent some time reporting in Kashmir. My views are certainly informed by that experience. My reporting is published here.

We could even face more upheaval in financial markets already growing giddy again.  In fact, Nouriel Roubini, the NYU economist who warned us in 2006 and 2007 that the end of the housing bubble could wreck the financial markets, now sees a new bubble forming from trillions in new investments by financial institutions playing the declining dollar off of other currencies.  Moreover, he also sees an inevitable bust coming, with devastating new costs.  He’s certainly correct that currency plays are very risky, since exchange rates can turn unexpectedly on a dime.   That’s actually a variant of what happened to the Long Term Credit Management fund in the late-1990s.  The big bets placed by that single fund, and the liabilities of its Wall Street investors, nearly brought down the financial system.  What’s happening now is on a much bigger scale, and the underlying system is a lot more vulnerable.

If we do dodge Roubini’s latest bullet, the bad news eventually will run its course – though it probably will take at least another year, and longer than that for employment to recover.  By that time, it will be more obvious that we don’t have a national strategy to avoid another boom-and-bust cycle and produce sustained gains for most people.   It’s hard to face, but the Treasury and Congress have to give up their comforting assumption that the handful of financial institutions which dominate our capital markets are driven to behave in ways that ultimately produce good times for everyone.  In some periods, markets do work nearly as well as that – from the latter 1950s and through the 1960s, for example, and again in the latter 1980s and through the 1990s.  At other times, distorting new conditions bound the system, and markets go a little haywire.  That’s what unfolded in the latter 1920s and through the 1930s, again in the 1970s, and now it’s happening again.  So it’s time to retire the economic strategies of the last 25 years or so, which relied on efficient markets to drive those who run its largest institutions to work their will for everyone else’s benefit.

What we need now is a new debate over the terms of a new economic strategy.  One place to begin is by limiting some of the risks taken by institutions that dominate critical markets, which the rest of us also depend on.  It’s hard to do, because it’s very difficult to even measure and monitor those risks.  It also means effectively limiting the profits available to the society’s richest companies, and how often does that happen?

A greater challenge will involve facing up to the way that the fast-evolving global economy has undermined our capacity to create jobs and deliver rising incomes for most people.   It’s not about sending jobs to China.  Rather, it’s about how hard it’s become for many companies, facing intense competition from tens of thousands of new foreign and domestic businesses created in globalization, to raise their prices when their cost go up.  So as their health care and energy costs have marched up, they’ve cut other costs – starting with jobs and wages.  And whenever this crisis and downturn truly end, the intense competitive pressures that indirectly eat into the American incomes will be as strong as ever.

The debate has to begin with the recognition that in this period at least, markets won’t cure these problems.  If we truly want to restore steady wage gains, there will be no way to avoid serious government steps to slow future cost increases in health care and energy. A new strategy also has to acknowledge our only certain competitive edge in a global economy.  In the country where the idea-based economy took hold first, our companies and workers still do better than most of their counterparts elsewhere in developing powerful new innovations, adopting them across the economy, and adapting them to their own particular circumstances.   We have to generously fund both the seeds and the infrastructure of innovation.  And we should help everyone develop the flexibility demanded to operate effectively in innovation-dense workplaces, by funding universal opportunities for people to upgrade their skills and education every year.

To avoid getting pigeonholed in this less-lucrative corner of the market, Nokia has increasingly been moving into offering services built into their handsets. A year ago, they launched Nokia Life Tools in India– a suite of applications meant particularly for phone users in rural, disconnected areas, to give them access to agricultural information, educational services, and entertainment media. 

The services were evidently a hit, as Nokia is now rolling out the same Life Tools in Indonesia, starting later this year. The tools, which run off a graphically rich, multilingual interface, help users by enabling access to weather forecasts and market prices for their produce, test preparation and English-language training, and music, jokes, and movie reviews.

In addition, Nokia just announced five new low-cost phones intended for rural environments, including their cheapest model to date. The $30 Nokia 1280 has a slightly shorter battery life than its predecessor– 8.5 instead of 9 hours– but it has other built-in features that make it a useful tool for a typical villager, including a flashlight and an FM radio. My favorite aspect is that the new phone enables five separate phone books; in many poorer areas, phone-sharing is an increasingly common way for people to stay connected, and the separation of phone books is a feature that– irrelevant in the US– makes the phone more valuable, and more functional for a user in rural Indonesia. Another great insight from Jan Chipchase and his colleagues at Nokia.