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Immigrant Labor Improves Job Prospects For the Native Born

Immigrants aren’t stealing jobs from native-born U.S. citizens. In fact, they help the economy in a way that results in higher average wages for U.S. workers.

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Engler: Can you comment on the work of George Borjas, a Harvard economist who has argued that immigration does create downward pressure on wages for lower-wage workers. He’s contended that it resulted in a wage decrease of as much as 7.4 percent for the poorest tenth of the workforce between 1980 and 2000?

Peri: Borjas wrote a paper in 2003 that spurred a lot of academic debate. [The statistics have since been contested, but] people in the media often quote the old numbers. The more recent numbers that even Borjas would support suggest that there might be a negative 3 percent wage effect on the least educated workers. But even his work shows a positive effect on intermediate and more highly educated workers. So even his version is relative; it shows some negative effects and some positive effects.

I have taken issue with some of Borjas’ estimates, saying that he has not adequately taken into account the mechanism of complementarity. He has assumed that native and immigrant workers are perfectly substitutable at lower levels of education. My studies over the past three to four years show that, in fact, native and immigrant workers do take different jobs, do have some different skills, and do specialize in different productive tasks. And this reduces direct competition. If you account for that, you get a very small impact -- or no impact -- for those at the lowest levels of education.

In my most recent paper, I do an analysis based on an overall average [of wages throughout the workforce]. I don’t decompose the data to assess the impact of immigration on people of different skill levels. In other studies, I did decompose this and looked at distribution. When I did that, my study showed that the biggest benefits of immigration go to intermediate and highly educated workers; however, for the less-educated, it’s essentially a wash, or zero impact.  

I’m not alone in my position. David Card and other economists working on this also say that it’s hard to find the negative effect that George Borjas claims. All in all, I don’t dispute his idea that there’s a bigger benefit for the highly educated than for the less-educated. But I would say that immigration does not really create a loss even for the less-educated. It’s more of a wash.

Engler: How would you respond to those who argue that new immigrants undermine unions and job standards created by organized labor?

Peri: I would say that if what your union is defending is a specific job classification, in construction for example, immigration will create some difficulties for you. If you instead focus on protecting the worker, you allow native workers to move into higher-skilled construction jobs that might require more language and communications skills. If your sole focus is on keeping immigrants out, you’re not going to be able to capitalize on the gains on immigration.

Engler: It sounds like one of the points you are making is not so much that new immigrants hurt native workers, but that new immigrants themselves are the ones who end up with lower wages--that they are the ones who end up carrying that burden.

Peri: In some ways, immigrant workers are competing with themselves. Newer waves of workers, to some extent, are making things more difficult for the immigrants who came just before them. But for immigrant workers, the benefit is the big jump in wages they get over what they might have earned in their home countries, even if low by U.S. standards.

Engler: What do you think is the political relevance of your research?

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