U.S. Immigration and Jobs

¶ … colonies and then the United States of America has been a home to immigrants from throughout the world. At some times, more people were allowed to come than others, but there has never been a time when no one was permitted. During different periods, there has also been more or less discrimination against immigrants, especially in area of labor. This is due, in part, by a fear that the immigrants will be taking jobs away from the natural born citizens. A number of studies and research, shows, however, that this is not the case.

A poll conducted in October 2004 by the Center for Governmental Services at Auburn University showed that more than half of individuals from Alabama surveyed believe immigrant workers are taking jobs away from Americans and do not bring needed skills to the state. The random telephone poll of 1,012 residents of Alabama of voting age found that 34% of those surveyed "strongly agree" and 23% "somewhat agree" that immigrants are taking this employment. The poll did not make a distinction between illegal and legal immigrants and had a margin of sampling error of plus or minus 3 percentage points. The other question, whether immigrants bring required skills to the state, 34% "strongly disagree" and 21% "somewhat disagree." Although 10% of those called stated they have seen immigrants making constructive contributions to the area, 42% accuse them for community-wide concerns, such as petty crime, housing violations and littering. In addition, 56% of those surveyed feel that Alabama should not give immigrants social welfare assistance.

Is this true? It appears at first thought that the argument's logic is cut and dry: There are only so many jobs available. Therefore, if immigrants obtain some of these employment openings, fewer of them will be available for others. In addition, so the argument goes, because immigrants will accept lower pay, they cause a competition of wages that decreases everyone else's salaries. Thus, even employed native citizens will be paid less.

Although this belief sounds logical, this argument is unsound for a number of reasons. In short, the truth of the statement is based on the assumption that natural citizens and immigrants compete in the same labor market. However, economists and demographers have agreed such as Bean, Telles and Lowell (1987) that these immigrants constitute a separate "low-skill labor pool with a tendency to fill jobs native workers disdain"

Also, these economists noted that immigrants may even cause a minor enhancement in the jobs and pay of natives, by providing goods and services at lower-than-usual costs. In addition, their wide-reaching employment maintains the continuance of supervisory positions that natives usually fill. Bean, Telles and Lowell (671) therefore concluded that "real wages of natives are increased" by the presence of such immigrant workers. Following a survey of other research, they state, "Studies of labor market impact have found that the effects of immigrants (both legal and undocumented) on the wages and earnings of other labor force groups are either nonexistent or small (and sometimes positive)"

These economists stressed that those are saying immigrants are taking growing numbers of jobs do not realize the complexities of the marketplace. The main point of these economists is that immigrants arriving in the United States do not just take jobs: They also enlarge the demand for goods and services, which means that more openings are created. In 1997, economist Julian Simon stated that even though it is simple to imagine an immigrant working on a machine and assuming a native's place, it is not so simple to imagine the small impact on the workers in the refrigerator manufacturing plant that the immigrant buys, at the transportation companies that move the refrigerators through the distribution channels, in the wholesaler's sales team or offices, in the number of retail sales clerks, and so on (218). Also, it should not be forgotten that immigrants establish new jobs not only by buying and consuming goods, but by their own entrepreneurial spirit. They start new firms that employ natives. While there has been no comprehensive study done of immigrant-owned businesses, there are countless examples: in Silicon Valley, companies begun by Chinese and Indian immigrants generated more than $19.5 billion in sales and nearly 73,000 jobs in 2000 (Brookings Institute 2000).

Studies by economists Vedder, Gallaway, and Moore (1994) found corresponding results: States with relatively high immigration actually experience low unemployment. Similarly, it was also recorded by the Brookings Institute that the largest wave of immigration to the United States since the early 1900s coincided with the lowest national unemployment rate and fastest economic growth. Immigrant entrepreneurs create jobs for American and foreign workers, and foreign-born students allow many United States' graduate programs to keep their doors open.

Responding to concerns about immigration in the United States, Congress in 1990 appointed a bipartisan Commission on Immigration Reform to review the nation's policies and laws and to recommend changes. In 1995, the commission asked the National Research Council to convene a panel of experts to assess the demographic, economic and fiscal consequences of immigration. It was specifically to address three questions: 1) What is the effect of immigration on the future size and composition of the U.S. population?; 2) What is the influence of immigration on the overall economy?; and, most important for the purposes of this paper, What is the fiscal impact of immigration on federal, state and local governments? The results were published in the report the New Americans (1997).

Using a basic economic model, the National Research Council noted results similar to those noted above: It found overall that immigration produces net economic gains for domestic residents for a number of reasons. At the most basic level, immigrants increase the supply of labor and help produce new goods and services. However, since they are paid less than the total value of these new goods and services, domestic workers must gain as a group (6).

The gains, stated the National Research Council, come from a number of sources. On the production side, immigration allows domestic workers to be used more productively, specializing in producing goods at which they relatively more efficient. Specialization in consumption also yields a gain. Thus, immigration breaks the rigid link between domestic consumption and domestic production (7). In this respect, then, the impact of immigration is similar to that of international trade. When trade is relatively free, any change in the number of immigrants will affect the incomes of domestic workers less than it would have without trade.

This does not mean, however, that the whole economy benefits. The Council recognizes that there are some groups of U.S. residents that gain more than others from immigration. For example, the gainers are those who are complementary with immigration labor with rising incomes -- or domestic, higher skilled workers and owners of capital. Those purchasing goods and services made by immigrant labor also benefit. On the other hand, the losers may be the less-skilled domestic workers who compete with immigrants and whose wages will fall. To the extent that immigrants specialize in activities that otherwise would not have existed domestically, immigration can be beneficial for all domestic residents. In such an instance, little substitution exists of new immigrant workers for domestic workers, and domestic consumers gain from the lower prices of services (7).

A more specific concern regarding immigration and labor is the effect that immigrants on native minorities. The focus on this topic is based, in part, on educational attainment. Although the educational distribution among immigrants shows the same relative concentration of highly educated persons as that among natives, it also shows a higher proportion of individuals with low educational attainment. In 1995, for instance, about 20% of both immigrants and natives had at least 16 years of education. However, approximately 41% of immigrants, in contrast with 62% of natives, noted 12 to 15 years of schooling and 38% of immigrants, compared with 18% of natives re ported less than 12 years (National Research Council 176).

Due to the fact that African-Americans and most other native minorities maintain lower levels of education compared to white natives (Hirschman, 2000), researchers are interested in the immigration impact on these minorities. This issue is also of concern because of economic conditions. African-Americans benefit from relatively tight labor market conditions, thus the question is what occurs when African-Americans and immigrants seek employment in such a labor market. According to research thus far, the impact of immigration on African-Americans and other minorities appears to have been small over the past several decades.

Similarly, in her study on immigration's impact on the wages and employment of black men, the Urban Institute's Maria E. Enchautegui (1993) concluded, "The results show that in the 1980s black men were not doing worse in areas of high immigration than in other areas and that their economic status in high-immigration areas did not deteriorate during that decade." Further, the National Research Council study the New Americans, while finding there may be some impact of immigration on some African-Americans locally, concluded that "While some have suspected that blacks suffer disproportionately from the inflow of low-skilled immigrants, none of the available evidence suggests that they have been particularly hard-hit on a national level."