Immigrant Laborers Strengthen American Workforce, Economy

workers statueThis Labor Day, we reflect on the many contributions workers make to the U.S.—including those of immigrant workers. While immigration restrictionists have long tried to demonize immigrant workers and blame them for high unemployment rates and other economic woes, the facts make it clear that immigrants actually create jobs and businesses and boost the wages of native-born workers. Research shows time and time again that immigration levels are positively correlated with economic output and growth.

According to the Fiscal Policy Institute, economic growth of the top 25 metropolitan areas and growth in the immigrant share of the workforce are closely connected. In the period studied, from 1990 to 2006, Phoenix, Dallas, and Houston saw the fastest growth in immigrant share of the labor force and had well above-average economic growth.  The three metropolitan areas with the slowest economic growth—Cleveland, Pittsburgh, and Detroit—had among the smallest increases in immigrant share of the labor force.

Immigrants add to the economy in a number of ways:

  • They complement the U.S. workforce which today is older and more educated than ever before.  Immigrant workers tend to be concentrated at the top and the bottom of the educational scale, while most Americans fall somewhere in the middle.  In other words, immigrants and native-born workers have different levels of education, work in different occupations, and live in different areas of the country.
  • Immigrant workers spend their wages in U.S. businesses—buying food, clothes, appliances, cars, etc.—which sustains the jobs of the workers employed by those businesses. Moreover, businesses respond to the presence of new workers and consumers by investing in new restaurants, stores, and production facilities.  The end result is more jobs for more workers
  • Finally, immigrants are entrepreneurial and more likely than natives to start their own businesses.  According to a report from the Kauffman Foundation, “immigrants were more than twice as likely to start businesses each month than were the native-born in 2010.”

Contrary to what many Americans believe, there is no evidence that immigrants work and contribute at the expense of wages for native workers.  In fact, a February 2010 report from the Economic Policy Institute (EPI) finds that the “effect of immigration from 1994 to 2007 was to raise the wages of U.S.-born workers, relative to foreign-born workers, by 0.4% (or $3.68 per week).” Even the small (and shrinking) number of “U.S.-born workers with less than a high school education saw a relative 0.3% increase in wages (or $1.58 per week)” as a result of immigration during this period.

michele waslinThis isn’t to say that the current system functions perfectly—far from it.  The employment-based immigration system created in 1990 hasn’t been updated for 21 years, and the antiquated and burdensome laws and regulations make it difficult for foreign workers to immigrate to the U.S.  There is evidence that more and more highly-skilled immigrant workers and entrepreneurs have decided to take their investments and skills to other countries that offer more attractive incentives.

This Labor Day, it’s important to think about how immigrants have and continue to contribute to our economy, but also about how our immigration system needs to change if America is to remain competitive in the global economy in the long run.

Michele Waslin
Immigration Impact

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Comments

  1. Angry Voter says

    Do Republicans really think that laying people off will somehow magically reduce unemployment?

    Do Democrats really think that adding more workers will somehow magically reduce unemployment.

    No, of course not.

    Illegals are here because the plutocrats want to keep the US workers scared and poor.

    Don’t want to work unpaid overtime? They will.

    Don’t want to take a pay cut? They will.

    Don’t want to sleep with the boss? They will.

    You will never have more rights than the serf they can replace you with.

  2. Itzamirakul says

    Something is bothering me. For the longest time we are told that immigrants are coming to this country to do the jobs that Americans will not do. But for the last several years, there are constant television commercials offing college training for people who acknowledge coming here from other places, evidently NOT to do the jobs that Americans supposedly will not do. So once they get this college training and go on to take jobs that American citizens should be offered, then we will have to continue to bring more and more immigrants here to DO THE JOBS THAT AMERICANS SUPPOSEDLY WILL NOT DO. Once the immigrants get here, their children, which they will eventually have, will not be willing to work for these slave labor wages and will want good executive positions like every other American citizen. So it is a never-ending cycle. Bring in more immigrants to work for substandard wages.

    What bothers me are the LIES. Immigrants are allowed to come here, legally and illegally mainly because they will work for salaries much less than American citizens will work for because Americans realize they cannot support their families on such substandard salaries whereas the immigrants will live 5-10 in a room just to be here to send money home. It is not going into our economy. Immigrants do not care about America. Be honest about it. They care, and rightly so, about their families back home.

    I have nothing against immigrants. One of my parents was an immigrant back in 1930, so how can I hold anything against anyone who wants to get ahead? But for God’s sake, stop lying to us! Tell the truth! It is not that Americans will not DO the jobs, it is because Americans cannot AFFORD to work for the salaries that immigrants are willing to work for! We MUST allow immigrants to come to America if for no other reason than we need a constant influx of fresh blood and ideas, but TELL THE DAMNED TRUTH about why they are coming!

  3. Ryder says

    Yet another article that totally fails to acknowledge the important difference between illegals and new Americans.

    Illegals not only fail to pay net income taxes… but receive tax CREDITS and actually take Billions each year… they consume important resources… like schools… driving down the quality of education for American children.

    illegals take many thousands of jobs… good jobs. By working the fields of California in a manner largely unchanged for centuries, they have prevented the modernization of agriculture… the same way that slavery prevented the modernization of cotton harvesting. This keeps modern ag businesses from forming, and leaves engineers, machinists, equipment operators, fabricators, software engineers, et. etc. etc. out of work, and keeps agriculture in the dark ages.

    It’s our fault, for not kicking them out… obviously, but with insane articles like this, it just perpetuates this situation.

  4. says

    Rick and Kevin:

    Please follow your own advice and look up the research on illegal immigration–anything NOT done by clearly politically-funded and partisan-owned organizations such as FAIR will probably be good. The current preponderance of this research concludes that even illegal immigration has a net positive effect on our economy, both in the short and long run. Illegal immigrants are quite a bit LESS likely to take advantage of any state/federal services than citizens are, and these immigrants are almost universally employed. Their wages pay taxes (believe it or not), and they pump their wages back into the American economy. They generally vote Republican and (ironically enough) support strong immigration restrictions. If their children get educated and naturalized, these “anchor babies” are likely to be productive members of society, filling and creating jobs, increasing GDP, and increasing the government’s bottom line through tax payments.

    Your statements on these points reflect a definite set of opinions, but they are in apparent ignorance of what we currently understand the facts to be.

    • says

      @ Bobby. Actually, I pretty much live my own advice. I have conducted research first hand as well as incorporate information from trusted/objective sources. The quote I made regarding the 3.5% negative impact on wages came from the Population Reference Bureau, a very respected non-partisan source. Moreover, you can click on this below link to hear the story of local tradesman and how illegal immigration has impacted him:

      http://www.vimeo.com/27677516

      Or click on this link and see how illegal immigration is impacting minorities here in Southern California:

      http://www.vimeo.com/27676161

      The amazing thing is you do not have to look very far for evidence to support the disruptive force (all but) unrestricted immigration has had in the US and in particular border states like California since the mid-1980’s.

      In closing Bobby, why haven’t you cited any sources to support what you “currently understand the facts to be.” Perhaps I can tell you why, YOU CAN’T!

    • MyLeftMind says

      Nonsense. “Net positive benefit” on the economy means the rich get richer while the middle class is stuck with the bill. The people who hire illegal aliens make big bucks by cheating both them and us, because we have to pay for the high cost of illegal immigration. Those studies you cite are erroneous because they don’t take into account the cost of educating, feeding, housing & paying for medical care for the “instant citizen” children of illegal aliens.

      “Illegal immigrants are quite a bit LESS likely to take advantage of any state/federal services than citizens are…”
      But their babies are “instant citizens,” which means they’re entitled to, and take advantage of all the public service programs we’ve created for our own citizens.

      “…and these immigrants are almost universally employed.”
      Yes, which is exactly why they take jobs away from Americans. And please don’t repeat that silly opinion that they only take jobs Americans don’t want. Illegal aliens have devastated the construction filed, forcing union qualified carpenters to work for a pittance of what they should be earning if not for the influx of cheap, illegal labor.

      “Their wages pay taxes (believe it or not), “
      NOT true. Many work under the table, which means neither they or their employers are paying taxes.

      “…and they pump their wages back into the American economy.”
      Again, NOT true. Many illegal aliens send their earnings out of the country to families back in Mexico and Latin America.

      “these “anchor babies” are …filling and creating jobs, increasing GDP, and increasing the government’s bottom line through tax payments.”

      These anchor babies are taking jobs from Americans, and if raised in the welfare culture, often continue to use and abuse public resources. But hey, they’re citizens now, so they deserve to get handouts from America’s workers, right?

  5. says

    This article is so obviously deceptive as to almost defy belief. I am not sure what business and ethnic lobbies are funding Michele, but they are not getting their money’s worth. I would have expected better from think tanker. . .

    First, the problem is not immigrant labor. The problem is illegal immigration.

    It is patently misleading to color those wanting to restrict immigration as being anti-immigrant. What these groups (myself included) are saying is we need to restrict and curtail illegal immigration because it is hurting us. No country on earth devises its immigration policies focusing on the rights of the immigrant over the citizen. And that is just what we have at the present.

    It is a fact, that for every 10% increase in the size a particular niche in the labor forcer, there is a corresponding 3.5% decrease in wages. And this does not take into account other factors such as benefits and work rules. This is simple supply and demand.

    Even Michele’s deep bias cannot hide the truth. The very meager wage gains made among unskilled workers ( the paltry 0.3%) doesn’t even begin to keep up with inflation.

    Yes, immigrants (legal) are twice as likely to be entrepreneurial. This was revealed in a significant study done in the late 1990’s when they looked at CEO’s Fortune 1000 companies and where they came from.

    When the study cited above first came out it made a lot of headlines then was quietly laid to rest. The reason is when one looked closely at where the immigrants come from who are boosting the economy by creating jobs, the majority of them are not coming from places where America receives its greatest number of immigrants.

    They are coming from first the Indian subcontinent, then Asia (China, Korea, Taiwan, Japan), then northern Europe, then Latin and South America. What is odd is 70% of immigrants (legal and illegal) come from Mexico. Given the numbers alone, why aren’t Mexican entrepreneurs heading the leading more fortune 1000 companies?

    Given the above one would think that the best way to craft immigration policy would be to replace country quotas with objective criteria. If it is educated and skilled immigrants that are boosting wages, then we should be bringing in more of them – RIGHT?? That is of course if we want immigration policies to work for the people and not the interests of business and ethnic lobbies. Interestingly, this exactly what the late, great legislator Barbara Jordan recommended in the 1990’s.

    In closing, the crux of my problem with this poorly researched article is it paints with very broad strokes the positives of immigration (legal and illegal) while not even addressing the negatives. Moreover, it attributes the rust belt to a lack of immigration when we all know very well it was the outsourcing of good manufacturing jobs overseas that has had the biggest impact of jobs in these areas.

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