Immigrant Workers Enhance and Expand the U.S. Economy

Over the years, more and more economists have come to the conclusion that immigrant workers “complement” the native-born majority of the labor force by bringing different sets of skills and different demographic profiles with them, both of which enhance and expand the economy as a whole. Immigration restrictionists, in defiance of this growing body of evidence, continue to claim that immigrant workers undercut wages and job prospects for the native-born workforce. However, the restrictionists are increasingly outnumbered by more serious scholars who understand the differences between immigrant and native-born workers, and how these differences play out in the labor force and the economy.

A recent example of this emerging economic consensus on the nature of the immigrant workforce is a report released on June 27 by the Bipartisan Policy Center. The report, Culprit or Scapegoat? Immigration’s Effect on Employment and Wages, concentrates on two powerful points:

  1. Employment among the native-born population has decreased in recent years because more natives are leaving the workforce to retire, go back to school, or go on disability. They are not being pushed into unemployment by competition from immigrant workers. This is apparent from the fact that the unemployment rates for native-born and immigrant workers have stayed roughly the same at the same time total employment among the native-born has declined.
  1. The wage differences between immigrant-heavy industries and native-heavy industries are explained by differences in the skill sets and education levels required by the industries; not ruinous suppression of native-born wages caused by competition from immigrants. Roughly half of the native-born and immigrant workforces are employed in different industries. Native-heavy industries pay more than immigrant-heavy industries because they require different levels of education and different skills. This difference in education and skill requirements explains most of the wage differential.

During a panel discussion accompanying the release of the report, three experts fleshed out other aspects of the relationship between the native-born and immigrant workforces:

  • Demographer Dowell Myers, a professor at the University of Southern California, emphasized the fact that roughly 60 million Baby Boomers are now in the process of retiring, and that their exit from the labor force will not be fully compensated for by increases in the numbers of native-born workers. Clearly, immigration will be needed to pick up some of the slack.
  • David Dyssegaard Kallick of the Fiscal Policy Institute pointed out that much of the so-called “controversy” over the economic impact of immigration is propagated by the media. Among economists, there is relatively little disagreement. Rather than repeat the same debate over and over, Kallick recommended a focus on how to help the small number of less-educated natives who are most likely to find themselves in competition with immigrants.
  • Daniel Costa of the Economic Policy Institute warned against trying to use immigration policy to compensate for the failings of wage and labor laws. For instance, replacing the poverty-level minimum wage with a living wage would benefit both immigrant and native-born workers in a way that no change in immigration policy could accomplish.

Both the panel and the report underscore a relatively simple truth: immigration is an economic resource that enhances the U.S. work force—not to mention the tax base and consumer base. The key to maximizing the economic power of immigration is the creation of rational policies that admit needed workers under labor-market conditions which ensure that neither the immigrant workers nor native-born workers are disadvantaged in the process.

Photo by Viewminder.

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