Do Immigrants Really Take Jobs Americans Won't Do?

This article was originally published by Newhouse News Service on Wednesday, January 21, 2004.

By Katherine Reynolds Lewis

True or false: Many foreign-born workers come to the United States for jobs that Americans don't want.

The argument surfaces again and again in the immigration debate, most recently in President Bush's new plan to allow more temporary foreign workers. Without immigrants, it goes, there would be nobody to slaughter cattle, work in the fields, put up drywall or clean bathrooms.

"It's a misleading and false myth," said Harvard University economics professor George Borjas.

In fact, under standard economic theory, there's no such thing as a labor shortage, merely a shortage at the wage being offered, said Jeffrey Passel, a demographer at the Urban Institute, a Washington think tank. Without immigrants, American companies would have to offer higher pay to attract prospective employees.


But an immigrant need not take a specific job from an American in order to have a negative impact. The inflow of foreign-born laborers depresses wages of all workers by some $190 billion a year, in Borjas' estimation.

To be sure, the United States benefits from immigration. Cheap labor lowers the cost of goods and services for all. Immigrants bolster the economy as consumers and as taxpayers, not to mention their unquantifiable social and cultural contributions.

But immigrants compete directly for jobs with less-educated Americans who can barely support a family on their earnings. "The losers are the low-skilled workers in the United States, who are disproportionately minorities, women and youth," said Vernon Briggs, professor of labor economics at Cornell University in Ithaca, N.Y.

Companies often argue that paying the higher wages that draw American workers would make them less competitive, particularly in a globalizing economy.

This is a crutch, said Mark Krikorian, executive director of the Center for Immigration Studies, a Washington-based organization that favors restricting immigration. Many businesses unwilling to add workers at higher pay could use technology or other innovations to make their existing labor force more productive, he said.

"In those industries where foreign workers are concentrated, their presence slows mechanization," Krikorian said. "There are plenty of ways of replacing unskilled labor."

Many employers prefer to hire immigrants because the foreign-born are unlikely to demand more money, benefits or better working conditions if they are working illegally or have to be employed to stay in the country. Uunscrupulous businesses also hire illegal immigrants in order to dodge taxes, the minimum wage and costly labor laws.

"It's just not plausible to think that an American's going to do a job that an illegal worker does living five guys to a one-bedroom apartment, working under the books, with no thoughts of retirement or expecting benefits," said Dan Stein, executive director of the Federation for American Immigration Reform, another Washington group that favors curbs on immigration.

Consider the circumstances of two Washington-area men: one an immigrant, one American-born.

On a frigid January day, Portillo Mercedes Alvarez, 47, stands on a street corner in Alexandria, Va., hoping a contractor drives by with a day job painting or doing carpentry. He has a temporary work permit and is looking to make $8 or $10 an hour. In a good month he can send $100 or $200 to his wife and five children in El Salvador, although often he just breaks even.

"With a million wishes I would like to have everyone here," Alvarez said through a translator.

As many as 100 day laborers gather at the corner when the weather is warm, despite the risks associated with such casual employment. Sometimes the people who pick up Alvarez refuse to pay him at the end of the day. In his wallet, he carries two bounced checks for $320 that he should have been paid in November.

The same day, Hubert Pegues, 43, waits his turn at the nearby Virginia Employment Commission office. He was laid off from his food service job in November and hasn't been able to find work since, so he has applied for unemployment benefits.

Immigrants now take most of the jobs in his industry, which used to go predominantly to African-Americans, Pegues said. He opposes easing restrictions on immigration.

"We don't have enough work for those who are here," he said.

Of the 19.1 million foreign-born workers in the United States as of March 2003, 10.4 million had no more than a high school education, according to the Center for Immigration Studies. That month, the unemployment rate for immigrants overall was 7.4 percent, and 9.7 percent for the least educated group. Those figures compared with 6 percent for native-born Americans overall, and 9.2 percent for those with a high school education or less.

Research finds that immigrants, like the poor in general, burden public resources such as schools and hospitals.

According to a 1997 National Research Council study, immigrants cost state and local governments more than they contribute in taxes or other economic benefits. The most dramatic effect was felt in California, where the native-born resident paid an average $1,174 more in order to cover the costs of immigrants. In New Jersey, the average was $229 per person.

On the other hand, immigrant workers often pay into a Social Security system from which they never collect. In 1999, employers paid $4.8 billion on $39 billion of earnings that the government can't match with actual persons, said Mark Lassiter, a Social Security Administration spokesman. A total of $374 billion in unaccounted-for wages was reported to the government between 1937 and 2000.

"That's money that the U.S. is absconding with because these workers will never get any benefit," said Eliseo Medina, an executive vice president with the Service Employees International Union, which represents public sector, health care and building service workers.

James Smith, chairman of the panel that produced the National Research Council report, believes the overall benefits from immigration outweigh the costs. "When immigrants come in, we as a nation gain from that," Smith said. "We win because our goods will be cheaper. Many more people will gain than lose."

Instead of trying to restrict immigration to protect low-skilled American workers, the government should "give those native-born Americans the education and skills to move up the income ladder," said Daniel T. Griswold, an immigration expert at the Cato Institute, a Washington think tank that supports greater immigration. "Important sectors of our economy would be in deep trouble if they were overnight deprived of their foreign-born workers, legal and illegal."

There will be an even greater need for workers in 10 or 15 years, as the baby boomers retire and the U.S. population continues to attain higher levels of education that will make low-skill jobs even less attractive, said Joseph McKinney, a professor of international economics at Baylor University in Waco, Texas.