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Home Publications Blogs Beat the Press The Post's New Facts on the Economic Impact of Immigrants

The Post's New Facts on the Economic Impact of Immigrants

Sunday, 02 May 2010 14:33

The Post corrected "5 myths about immigration" in the Outlook section today. The first of the myths is that "immigrants take jobs from American workers." It dismissed this concern by telling us that: "economists also estimate that for each job an immigrant fills, an additional job is created." It might have been helpful it had included some names here of economists who hold this view. There are certainly some economists, such as Harvard Professor George Borjas, who see immigrant workers as having a substantial downward impact on the wages of less educated workers.

There also is an important question about who gets counted as an "American worker" in this story. Some analyses have concluded that immigrant workers have little impact on the wages of native born workers, however they do have a substantial negative impact on the wages of other immigrants. Of course many immigrants will become American citizens after being in the country for 10-15 years. So, if we count naturalized citizens as "American workers" then the Post's assertion is completely untrue.

It is worth noting that recent immigrants have had a much more difficult time in catching up with the wages of their native born counterparts than was true in 60s and 70s. This can be partially explained by the larger flow of immigrants in the last two decades.

It is also worth noting that there may be a difference between the marginal impact of more immigrants and the impact of a larger flow over time. In industries like residential construction and meatpacking, native workers have been largely displaced by immigrants over the last three decades. These industries had provided relatively well-paying jobs to workers with little education. They also had a substantial union presence.

This is less true today as wages and conditions in these industries have worsened considerably, as they became almost entirely non-union. At this point, more immigrants are likely to primarily depress the wages of other immigrants working in these sectors, although if there had not been a sharp uptick in immigration over the last three decades it is reasonable to assume that these industries would still employ native born workers at a better wage than they would have been able to receive in other industries.

Comments (11)Add Comment
written by Anthony, May 02, 2010 5:12
Using the large variation in the inflow of immigrants across US states we analyze the impact of immigration on state employment, average hours worked, physical capital accumulation and, most importantly, total factor productivity and its skill bias. We use the location of a state relative to the Mexican border and to the main ports of entry, as well as the existence of communities of immigrants before 1960, as instruments. We find no evidence that immigrants crowded-out employment and hours worked by natives. At the same time we find robust evidence that they increased total factor productivity, on the one hand, while they decreased capital intensity and the skill-bias of production technologies, on the other. These results are robust to controlling for several other determinants of productivity that may vary with geography such as R&D spending, computer adoption, international competition in the form of exports and sector composition. Our results suggest that immigrants promoted efficient task specialization, thus increasing TFP and, at the same time, promoted the adoption of unskilled-biased technology as the theory of directed technologial change would predict. Combining these effects, an increase in employment in a US state of 1% due to immigrants produced an increase in income per worker of 0.5% in that state.
written by Anthony, May 02, 2010 5:28
It's ironic that Krugman and Baker along with the racist Right solely cite Borjas who has aligned himself with the Center for Immigration Studies (CIS), which is a hate group: http://www.splcenter.org/get-i...ts-a-look-
meatpacking union jobs
written by Michael Radosevich, May 02, 2010 11:56
This post is one of the few times I've seen any professional economist mention union meatpacking jobs & immigration. In the 1960s & 70s, a good friend's father drove 40 miles each way to work at a John Morrell meatpacking plant. He was paid $22-28 per hour at the time, a wage similar to that paid to union autoworkers.

Now, meatpacking jobs pay $6 or $7 per hour. The jobs are dangerous & somewhat disgusting. No one except illegal immigrants will do the work for that pay - see, e.g., the recent debacle in Postville Iowa.

People in Mexico were just as poor [or poorer] in the 1960s & 70s as they are today, yet illegal immigration was not a major problem. What changed? The destruction of the unions, which changed well-paying jobs to minimum wage jobs, created a demand for illegal immigrants. People responded to the demand. In the mean time, big business has been laughing its way to the bank.
written by diesel, May 03, 2010 12:58
"Combining these effects, an increase in employment in a US state of 1% due to immigrants, produced an increase in income per worker of 0.5% in that state."

How was that 0.5% increase in income per worker distributed across the class spectrum?

How did heavy immigration to the border states affect the economies of states farther away?

Do you really believe that the pay scale for non-union immigrant carpenters (to use Dean's example) is as high as that for union carpenters?

Can you not see that our lax immigration laws are one tool the wealthy elite have employed to destroy the bargaining power of labor, the upshot of which is to leave the workforce disorganized, at odds with itself, insecure, ignorant of its rights and desperate?

And finally, your equation contains no factor for worker satisfaction or contentment with life.
Americans are dumb and lazy, then...
written by purple, May 03, 2010 8:04
According to the Post, Americans are too lazy to meatpack and too dumb to learn computer programming (H1B).

The Arizona law has a 50 % approval rate nationally, despite condemnation from the entire mainstream political class. It's a horrid law, but it does reveal a vast disconnect between the desires of big business and what has happened to wages in the US over the last 30 years.
written by purple, May 03, 2010 8:07
If you can't condense research in a straightforward manner, then you probably don't understand it yourself. Using the word 'robust' a lot does not prove anything.
written by Jeanne, May 03, 2010 4:23
There seems to be an ongoing myth that immigrants take only low income jobs from 'Americans'. I am US born, 3rd generation and very often in job interviews, I have encountered Indian/Arab men that now appear to be dominating the US Information Systems market.
At a recent job fair at a large corporation, 50% of the IT department representatives were foreigners of Arab and Indian decent. Most of them did not speak English well enough to be understood. The other 50% were asian, african american and white. 3% of that group were women. I have reduced my salary by 50% (and more) and often had to waitress rather than working in a profession that I had worked in for 15-20 years. Everyone I know, at all levels of employment except the very top is effected by the large influx of immigrants - and in the economic sense, every impact is negative.
written by John Emerson, May 03, 2010 7:36
I don't see how the combination of jobs going overseas to get cheap labor, and cheap labor immigrating to the US, could possibly NOT have a negative effect on American labor (especially but not only unskilled and semiskilled labor).

In some of the things I've read, there were two underlying messages: a.) not very many people will be hurt (not quantified more precisely than that) and b.) The ones who will be hurt aren't really worth much anyway.

written by John Emerson, May 03, 2010 7:41
"According to the Post, Americans are too lazy to meatpack"

In 1985 there was a bitter strike in Austin Minnesota. The strikers had been working there forever, and they wanted to continue, but they wanted union wages. Hormel wanted to hire cheap non-union immigrant labor. The strike was broken and this was a milestone in Reaganite labor relations.
written by Queen of Sheba, May 04, 2010 10:56
The right wing corporatocracy has been propagandizing its way to cheap labor as long as I can remember, and I remember back to the '50s and '60s. I lived in Oklahoma back then, and I remember when the Right to Work bandwagon came to the state. My father was a union worker, and there were many discussion in my house about how this law, if passed, would eventually destroy the unions. After the law finally passed, I asked my father how people could vote for something that was so obviously detrimental to their own well-being. He told me that the voters had been made to believe two things: that requiring someone to join a union to get a job was manifestly unfair and that employers would look out for the best interests of their workers without a union. In other words, that voters had believed the lies that people with money had told them.

Some things never change.
written by Robert Hume, May 05, 2010 2:58
When I came to DC metro area in the 60's construction workers were white and black. Now they are all Hispanic except for the top bosses. Unemployment in blacks approaches 50% and there are very few working-class white males except truckers, electricians, plumbers, and HVAC. Other working class whites have left the metro area for W. Virginia and other "country" areas. The country and bluegrass music live performance culture of DC has disappeared.

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.