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The Case That Immigrant Labor Doesn't Hurt Low-skill U.S. Workers

Immigrants actually raise the productivity of the economy, generating jobs en masse, including low-skill jobs for both American and immigrant workers.
 
 
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Photo Credit: Shutterstock.com/William Perugini

 
 
 
 

The heated debate over immigration reform continues in Washington. Much of the heat comes from one claim: immigration hurts low-skill US workers.

The idea is that immigration causes overall economic harm to low-skill US workers, because many immigrants are low-skill themselves and compete for the same jobs. This is a reasonable belief if all one has to go on is the kind of day-to-day experiences that everyone has—such as applying for jobs and competing with other applicants.

It is also wrong.

Many of the world’s best labor economists have spent the last quarter century exhaustively looking all over the world for negative effects of immigration on low-skill workers. They cannot find such effects. This is one of the most robust findings in the labor economics research literature.

These economists take two main approaches. The first is to look for sudden, large increases in immigration to a particular area, and track what happens to native workers in that area. These include massive inflows of  Cubans to Miami in 1980,  Algerians to France in 1962,  Russians to Israel in the early 1990s,  all immigrants to different regions of Germany in the 1980s and  to regions of the United Kingdom in the 80s and 90s, and  Former Yugoslavians to the rest of Europe. Not one detects substantial effects of immigration on wages or employment.

In the second approach, economists chop up the data differently. They divide workers in the migrant-destination country not into different geographic regions but into different groups of broadly similar people—for example, 25–29 year-old males with a high school degree, 30–34 year old females with a college degree, and so on. They then watch what happens to wages and employment among native workers in each group, across the whole country, upon the arrival of immigrants with those characteristics. With this method, the leading-edge research is by Gianmarco Ottaviano and Giovanni Peri. In  a paper published last year, they show that total, cumulative immigration to the United States between 1990 and 2006 had almost no net effect on the wages of American workers—including those with no high school degree.

How did our common-sense intuition get this crucial fact so wrong? Our best understanding now is that two broad forces yield this counterintuitive result. For the low-skill jobs that exist, there is extremely little competition between native workers and immigrant workers. And the indirect economic effects of low-skill immigrants’ work are the reason that many low-skill jobs exist in the first place, including the ones filled by native workers.

First, the vast majority of low-skill immigrants are not competing with any U.S. worker at all. The problem is not that Americans entering the labor force aren’t willing to take certain jobs. It’s that there aren’t enough Americans to do them.

In the next decade most of the fastest-growing occupations will be jobs that require less than high school education. The US Bureau of Labor Statistic  projects that between 2010 and 2020 there will be 3.6 million new, additional jobs in the US economy in home health care, basic childcare, and food service, and other low-skill industries. That is, the Census Bureau  reports, is more than double the total American workers age 25–54 who will enter the labor force in the same period: 1.7 million.

This point bears repeating: even if every single American entering the labor force in the next decade dropped out of high school and college to do low-skill work, they wouldn’t be able to fill half the labor positions America needs in these areas. And of course that isn’t going to happen: In that period  roughly 30 percent of Americans entering the labor force will have high school only, and under 10 percent will have less than high school. That means we can reasonably expect somewhere around 5–15 percent of these very low-skill jobs to be filled by American workers. For the rest, no American will be competing with immigrants.