New Study Shows Immigrants Boost Wages And Productivity

migrant workersTuesday, the Federal Reserve Bank of San Francisco released a report essentially debunking the right wing myth that immigrants steal jobs from U.S. citizen workers. In fact, the study concluded, “immigrants expand the U.S. economy’s productive capacity, stimulate investment, and promote specialization that in the long run boosts productivity.” The study conclusively states, “there is no evidence that these effects take place at the expense of jobs for workers born in the United States.”

The study produced three main findings:

  • Immigrants don’t “crowd out” U.S.-born workers in either the short or long run. In other words, immigrants aren’t taking jobs from Americans. Instead, the “economy absorbs immigrants by expanding job opportunities rather than by displacing workers born in the United States.” Immigrants in the workforce have “insignificant effects in the short run” and a “significant positive effect in the long run.”
  • The presence of immigrants is associated with increased output per worker. This is a long-term effect that happens as a result of businesses taking advantage of new immigrant labor. The study estimates that an inflow of immigrants equal to 1% of employment has the effect of increasing income per worker by 0.6% to 0.9%. It may not sound like a lot, but it apparently means that total immigration to the U.S. from 1990 to 2007 was associated with a 6.6% to 9.9% increase in real income per worker, or an increase of about $5,100 in the yearly income of the average U.S. worker.
  • Immigration is associated with increases in the efficiency and productivity of state economies. The increase in income mentioned above is a result of the boost in efficiency and productivity that new immigrants prompt. Once businesses adjust and expand their physical capital (equipment and structures) to take advantage of new immigrant labor, output increases.

Groups like the Center for Immigration Studies — which never find anything good to say about immigration at all — meanwhile insist that high unemployment among less-educated and younger U.S.-born workers should prompt the U.S. to kick its undocumented immigrants out and shut its doors to the world. However, the Federal Reserve Bank’s study explains that, “among less-educated workers, those born in the United States tend to have jobs in manufacturing or mining, while immigrants tend to have jobs in personal services and agriculture.” Also, U.S. citizens tend to have “relatively better English language skills” which means “they tend to specialize in communication tasks.” Immigrants usually specialize in manual labor. “This results in specialization and improved production efficiency,” states the report.

The report doesn’t distinguish between undocumented and documented immigrants, however, other studies that have uncovered similar findings have further concluded that enacting comprehensive immigration reform that puts undocumented immigrants on a path to legalization would amplify the positive effects of immigrant workers cited in this study.

Andrea Christina Nill

Reposted with permission from The Wonk Room.

Comments

  1. NYH says

    The study conclusively states, “there is no evidence that these effects take place at the expense of jobs for workers born in the United States.”  

     

    Right. What did they study, agricultural jobs for migrants? There’s “no evidence” because there’s no way to “study” jobs where employers use illegal aliens to cheat Americans.  

    Let me tell you what has happened to the construction field in the past 20-30 years, especially since the LAST amnesty the US government handed out to illegal aliens in the 1970s or 1980s. Carpenters and builders all over the country who belong to unions should be earning $30-$40/hour but instead, they have to compete with illegal aliens who are willing to work for $5-6/hour. “Undocumented workers” are willing to work under the table so the employers don’t have to pay taxes like FICA, Workers Compensation or health insurance or other benefits. That means the American workers have to either work under the table as well, or just not get the jobs. In the United States, we have created protections for employees that should be emulated all around the world. We have child labor laws preventing the exploitation of children. We have social security taxes that create a retirement system for employees. We have OSHA safety regulations that prevent employers from putting employees at risk in hazardous jobs. We have workers compensation taxes and laws that make employers responsible if their employees get hurt. And we have minimum wage laws and unemployment benefits.  

    Those of us who are immigrants and children of immigrants benefit from the employment laws that protect workers in this country. ILLEGAL aliens are destroying those gains by taking jobs at ridiculously low wages that allow employers to cheat and not pay employee taxes.  

    Liberals who pretend that this is about white versus darker skinned people are way off base. This has nothing to do with racism; it has to do with preventing illegal aliens from undermining the workers’ rights we have created in this country over the past century.

  2. Ryder says

    It seems to me that this is all pretty much propaganda… I know of a LOT of Americans that have lost their jobs in the construction trades because of illegals. For this article and report to say that illegals don’t cost Americans jobs is pretty hard to take for the Americans that have.

    And of course one in 5 Americans are now not working… and if we cut off (as opposed to extending) payments for unemployment (in other words, stopped paying people to not work), we would see a flood of very eager Americans trying very hard to find ANY work just to put food on the table (which they should be doing). This flood of people would come into direct conflict with the illegals that are here.

    It is only the fact that we pay people to not work at all that we are keeping this clash from happening.

    It is a false economy in that sense, due to the market distortions created by government programs.

  3. says

    Wow, Miss Nill writes like a real arch capitalist. Dick & Sharon should change the name from the LA Progressive to LA Conservative.

    Granted, the inflow of foreign workers has always accompanied more productive uses of resources such as technology, plants, and equipment, and has brought overall benefits to the U.S. economy in many respects. Why else would Wall Street still be raking in the cash while most of Main Street is still hurting.

    George Carlin once said of the “real owners of the country” that what they want is “more for them and less for us.” To that end the next best thing to shipping our manufacturing base overseas to drive down labor/regulatory costs and increase profits is to create a porous border and allow multitudes of cheap highly exploitable workers into the country.

    As I have stated before, Miss Nill is shill for the Corporatocracy. The goal of her organization is an open border and admittance of immigrants without consideration for credentials or impact on the current labor force. She just wants them to be brown. It’s a very cozy relationship between folks like Miss Nill and the corporations. She has no concern whatsoever for the most vulnerable members of our workforce.

    A mountain of evidence (some of which I site below) indicates that a 10 percent immigrant-induced increase in the labor supply is associated with a 3.5 percent decrease in wages, a 3 percent decrease in the employment rates of native born. Now given that 57 percent of illegal immigrants have less than a high school education and compete for low-skilled jobs with native workers. It is easy to see why wages have been plummeting for unskilled native born workers. In fact, for black workers have experienced a 4 percent decrease in wages and a 3.5 percent decrease in employment rates.

    An enormous cost is being born by unskilled and semi-skilled laborers in this country due to our porous border. People like Miss Nill must be fought every time they raise their head and cite studies that are at best misleading. I suggest the following sources for starters:

    Gordon Hanson, testimony, pp. 8–16. Briefing transcript of record before the U.S. Commission on CivilRights, Impact of Illegal Immigration on the Wages & Employment of Black Workers, Washington, DC, Apr.4, 2008.

    Borjas, Grogger and Hanson, “Immigration and African-American Employment Opportunities: The Response of Wages, Employment and Incarceration to Labor Supply Shocks,” 2006, NBER Working Paper12518, http://ksghome.harvard.edu/~GBorjas/Papers/Borjas,%20Grogger,%20Hanson,%202006.pdf; see alsoBorjas, Grogger and Hanson, “Immigration and the Economic Status of African-American Men,” January, 2009,http://irps.ucsd.edu/assets/027/9473.pdf, cf.

    Harry Holzer, “The Labor Market and Young Black Men,” September, 2007,
    http://www.urban.org/UploadedPDF/1001111_moynihan_perspective.pdf (accessed September 9, 2009).

  4. Marshall says

    I agree with a lot of this study, foreign farm workers do a lot of jobs US workers will not do. That work is hard and long and the pay is probably not what it should be. My point is that such workers should be here under the control of our governments, state and federal, and be here under legal means. I would exspand the progams that hire such workers and make such they do not take up full time residence here.

    As for non farm workers, not sure about that. There are a lot of construction wokers that might be displacing US workers. Also in meat houses, there are many low cost illegal workers. I feel non citizens should be linked to a certain job and not allowed to just up and move on to other jobs and locations.

    As for the drug crossings, They should attract high level attention and be taken out of the picture.

    • Ryder says

      “foreign farm workers do a lot of jobs US workers will not do.”

      This is a false statement.

      Two reasons: 1 – we pay Americans to NOT work. (unemployment). If we stopped doing this, those people would start to get very cold and hungry, experiencing the kind of life that “foreign farm workers” have experienced back home. Guess what… Americans would suddenly find that they can do those jobs too.

      Unemployment payments and welfare are what empowers Americans to not do those jobs, otherwise they would.

      Reason 2: It used to be that “regular Americans” would not pick cotton, so they had slaves do it. Then slavery became illegal. According to your reasoning, the cotton market would have failed at that point because “US workers” would not do it.

      This turns out to be false. America is the #1 cotton producer in the world… with record production. Why? Because Americans DO pick cotton… it’s just that they pick cotton in their own way. They pick cotton with engineers, machinists, heavy equipment operators and all of the rest of the activity surrounding a modern operation. These are excellent, well paying jobs… all made possible because we STOPPED using slaves.

      The same is true for agriculture. Illegals pick the grapes in the wine country of California. Americans COULD be doing this job, but because people like you are of the false belief that Americans (engineers, machinists, etc.) won’t pick grapes, this situation lives on. In Austraila, they have very successful modern wine/grape growing operations… but because they don’t have an endless supply of Mexicans, they have their engineering and machine professionals do it.

      Your attitude is keeping the US in the dark ages… working people in the fields like slaves… stopping efficient farming from happening as it has in cotton and in Austrailia and other countries.

      There is no excuse for it.

  5. Fritz Dahmus says

    Andrea,

    “The report doesn’t distinguish between undocumented and documented immigrants, however…”

    The whole right-wing “hate” for immigrants is based on the ILLEGAL ones. Can you please get that in your head!

    • stormkite says

      And the right-wing doesn’t really bother to distinguish “Legal” from “Illegal” except in its General Election rhetoric. On the streets and when running in primaries, anyone who’s more brown than pink, or who sounds like they might actually have non-native-English-speakers in their ancestry, is “illegal” until they prove otherwise – and sometimes even after, if there are political points to be scored with the nativist-bigot Party Base.

      The same people who get hysterical and rave at the thought of a national ID card or being stopped and asked to provide ID by law enforcement see no problem in demanding that any and every sepia- or brown-skinned resident be subject to arrest and deportation at any time if they’re not in possession of their official papers – regardless of where they were born.

      When the nutcases get upset because it’s not about race… ultimately it’s about race.

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