Report: Immigrants may not hurt wages

[Judi Lynn]

Nov. 16, 2005, 11:59PM

Report: Immigrants may not hurt wages
By JESSICA HOLZER
Copyright 2005 Houston Chronicle Washington Bureau

WASHINGTON - There is no clear evidence that an influx of immigrant workers hurts the earnings of U.S.-born workers over the long term, the Congressional Budget Office director told a House committee Wednesday.

"It might seem obvious that the arrival of immigrants would lower the wages of native workers," Douglas Holtz-Eakin said, but "the ultimate impact is very difficult to quantify."

The economy adjusts to the new workers, the report found.

Businesses make capital investments as immigrants become available to work, while native workers may choose to pursue more education to compete better in the job market.

During the past decade, the number of foreign-born workers in the United States has ballooned to 21 million from 13 million, accounting for about half the growth in the labor force.
(snip/...)

http://www.chron.com/cs/CDA/ssistory.mpl/business/3466653
(Free registration required)

[Name removed]

1. Deleted message

Message removed by moderator. Click here to review the message board rules.

[RedRocco]

2. and cigarettes may not cause lung cancer n/t

[QC]

3. Praise be to Dear Leader and the Glorious People's Revolution!

The law of supply and demand has been repealed!

[pinerow]

4. The dominant culture in the U.S has, historically, relegated mew-comers

to the 'bottom' tiered jobs...it is a no-brainer to suggest that recent arrivals are more willing to work at lesser paying jobs than "native" workers...and just what is a "native" worker...sounds like a line out of "Gangs of New York"...

[pinerow]

5. I meant "new-comers" not 'mew-comers"

nt

[Gormy Cuss]

6. Full text available at CBO site

http://www.cbo.gov/ftpdocs/68xx/doc6853/11-10-Immigration.pdf

Interesting read, especially the efforts to segregate effects based on educational attainment of the foreign born and workforce participation.

Quantified comparisons of the Latin American immigrants, legal and not, who are much more likely to have less years of schooling and Asians, who are more likely to be legal and have graduate level training.

I have only skimmed it so I can't comment in detail.

[Massacure]

7. A big thank you to captain obvious.

Of course the economy changes. Un the long run, there is no difference if the average person makes $20,000 a year and pays $2 for a loaf of bread or makes $30,000 a year and pays $3. But while wages and prices are adjusting to each other, it hurts...

[Bridget Burke]

8. Sounds like the Budget Office has been reading Ottaviano & Peri

Last Thursday, I found this in the Houston Chronicle:

Immigrants may increase wages of U.S.-born workers
Study's findings run contrary to popular claims
By JESSICA HOLZER
Copyright 2005 Houston Chronicle Washington Bureau

WASHINGTON - Contrary to popular wisdom, large-scale immigration to the United States may boost rather than dampen the wages of U.S.-born workers, according to a study by two university economists.

The influx of about 8 million immigrants from 1990 to 2000 pushed up the average wage of U.S.-born workers by 2.7 percent, economists Gianmarco I.P. Ottaviano of the University of Bologna and Giovanni Peri of the University of California at Davis found.

Businesses expanded to make use of the new workers, the economists said, and the immigrants, legal and illegal, tended to choose work that complemented the jobs of native workers.

www.chron.com/cs/CDA/ssistory.mpl/nation/3453776
(Use Bugmenot if you don't want to register.)

Here's the abstract of their paper, with a link to the whole thing in PDF. (A bit complex!)
www.nber.org/papers/w11672

[lovuian]

9. Oh the fiction is still going!!! This is ridiculous!!!

Liar 1 Believers 0

[wookie294]

10. Competing with third world labor

Median income of full-time, year-round workers, by sex and age group: Various years, 1955 to 2002

[1932]

28. Work creates wealth. Globalization concentrates wealth.

The net economic effect of putting someone to work is that wealth increases. That's the whole point of putting people to work.

Exploiting workers, whether it's by globalization or by creating a second class of workers at home (women, immigrants, uneducated, or whatever) concentrates the wealth created by their labor in the pockets of the economically powerful employers.

[Romigi]

11. Immigrants don't hurt wages as long as they're legal....

the problem is that there are many jobs here where I live in Mississippi that our natives are losing out to illegals. Don't get me wrong, I just got back from a conference in L.A. and I know that in larger urban areas illegals are needed for low-skill/low-pay jobs. However, many construction jobs and landscaping jobs where I live ARE being taken from native workers. And that's causing more to take unemployment benefits. So it's a mixed bag of candy.

[sofa king]

15. So isn't that really a problem with employers willing to hire illegals?

Illegal immigrants aren't streaming over the border for jobs that don't exist. Someone is willing to employ them. Someone is doing an excellent job of misdirecting public ire from the employers that rely upon illegal labor to the laborers themselves.

So here's a novel idea: make corporations liable for subcontractors which hire illegal immigrants.

I wonder why this isn't being done?

[raccoon]

30. Maybe the powerful are the ones who want to hire the illegals? nt

[primavera]

32. 1986 Immigration Reform and Control Act supposedly does just that

That was the major change in US immigration law back in 1986. Before that time, enforcement efforts were directed entirely against undocumented workers. IRCA introduced the notion that employers who hire undocumented workers also ought to bear a share of the responsibility. The problem, of course, was that corporations were the must-have campaign contributors everyone needed, so legislators soft-balled the employer sanctions provisions. Whole segments of the economy were exempted from the employer sanctions provisions, most notably, the agricultural sector which uses the greatest number of undocumented aliens. They also stipulated that employers had to knowingly be hiring undocumented aliens before the government could prosecute them. So you wound up with situations like that of Tyson's Chicken, which was not only employing undocumented aliens, but was retaining the services of alien smugglers to bring undocumented workers across the border to work in their plants. Yet, when the INS went after them, the senior management feigned ignorance of the matter, threw the INS a couple of low level supervisors as sacrifical lambs, and that was that - no one of any rank within the company could be touched.

The other issue is documentation. Aliens can submit forged Social Security Cards, fraudulent drivers licenses, and get hired. Fraudulent documents make it almost impossible to enforce the 86 employer sanctions provisions, as employers can claim that they had no way of knowing whether the documents submitted to them were legitimate or not. That's one of the reasons why there is so much emphasis nowadays on creating these high tech identity dcuments linked to superdatabases: if employers have a way of determining with certainty who is and who is not entitled to work in the US, they have no excuse for hiring someone who isn't eligible to work.

[daleo]

12. "There is no clear evidence"

You can hide a lot behind this phrase in economics or the social sciences. Truly conclusive (i.e. "clear") evidence is always hard to come by in these fields.

[Triana]

13. L00k! Pigs fly!

;)

[athena]

14. Legal immigrants in the long run provide more jobs for everybody.

Some of the people who have posted to this thread should read http://www.amazon.com/gp/product/0671015206/104-1374652-4483903?v=glance&n=283155&v=glance">"The Millionnaire Next Door." The ratio of millionnaires in America is higher among immigrants than among non-immigrants. Immigrants start businesses at much higher rates than non-immigrants; they are willing to take risks that people born in America would hesitate to take. They are motivated; they want a better future for their children, and they work hard. The businesses they start provide jobs for the idiots who whine about immigrants supposedly taking away their jobs.

Think about all the Asian, Greek, Italian and Middle-Eastern restaurants. Nearly all of them were started by immigrants.

[anotherdrew]

19. no one is complaining about legal immigrants fer god's sake

[athena]

20. Oh really? Well, illegal immigrants should be legalized.

It's as simple as that. If they were legalized, corporations would not be able to take advantage of them and pay them less than the minimum wage, among other things.

Furthermore, I'm not convinced that "no one is complaining about legal immigrants." The statistics quoted are for legal immigrants, not for illegal immigrants.

Here are some good articles about illegal immigrants, and why it's hypocritical, especially for people calling themselves democrats, to scapegoat them.
http://www.thenation.com/doc/20031110/scheer1028

If we really wanted to stop illegal immigrant workers from coming into this country, it would be straightforward and simple: require a tamper-proof identity card for any applicant for a job in this country and impose stiff criminal penalties on employers who hire people who do not provide the requisite card. But enforceable sanctions would be opposed by most major business associations because employers would no longer be able to find a vulnerable labor force to exploit. Undocumented immigrants come here to work. If jobs didn't exist, the number crossing the border, mostly from Latin America, would plummet.

That's how you "seal the borders."

But the cost for ending those jobs would be high. Ending the endemic use of undocumented workers in low-wage, dead-end jobs would force employers to pay real wages and offer real benefits to attract "real Americans" to do the work, and some jobs would simply leave the country. Prices for food, clothing and any product that relies on dirt-cheap labor would rise for everybody, and those middle- and upper-class families that count on don't-ask, don't-tell relationships with undocumented housekeepers, gardeners, nannies and elder-care workers would be affected.

http://www.thenation.com/doc/20051024/bacon

Inequality is the most important product of US immigration policy, and a conscious one. The current spate of guest-worker proposals all assume that immigrants should not be treated as the equals of the people around them, or have the same rights. Among the crucial rights denied them is the right to community--both to live in communities of their own creation and to be part of the broader community around them.

http://www.thenation.com/doc/20040927/bacon

In a world in which some 175 million people live outside the countries in which they were born, the flow of people across borders is inexorable, and growing. Immigration policy, rather than halting this process, affects the status of migrants in their new host countries. The UN Convention on Migrants Rights tries to guarantee a new set of rights for migrants corresponding to this new era of heightened global migration. It holds both sending and receiving countries responsible for their welfare, and proposes the goal of equal status of migrant and nonmigrant people. Predictably, countries sending migrants have ratified it, and those receiving them have not.

Despite the name, in guest-worker programs, "people are treated neither as guests nor as workers," says Andrew McGuffin, "but as slaves for rent." Rather than competing for workers by raising wages, employers seek a less expensive, more vulnerable labor force. If supplying this labor force is a primary goal of immigration policy, then legal protections for guest workers cannot be guaranteed, since they contradict its essential purpose.

[anotherdrew]

26. I agree! the "cost" of paying real prices for labor is one we can bear

if oil prices can more than double and we shake it off, for sure hourly wages for a segment of the population can do the same. Sure, it's gonna reduce the profit margin on some things and raise some prices... if that makes the enterprise not worth doing, then those businessmen who feel that way can get out of the way and let someone who can deal with it take over. Business in general needs to stop being/thinking "in debt to capital" then they would see that endless growth isn't necessary to have a useful economic activity.

[superconnected]

24. I love that book.

Excellent recommendation.

[northzax]

16. yes, over the long term, IF

and that's a big if, the opportunities exist for advancement through education for the previous wave of immigrants.

First things first: Immigrants, in general, do better, economically, than non-immigrants, over a 30 year period, and significantly better in the second generation than same age and beginning socio-economic level non-immigrants (I hate the word 'native') for several reasons. Basically, immigrants, in general, take more risks and work harder, it's a self selecting population, only the ambitious are likely to leave everything they know and move to a new country. It takes balls to drop everything and chase after something better. That self selection helps.

second off. you cannot move up the economic ladder if the education opportunities don't exist. plain and simple. And now, for the lowest levels of the economic ladder, they simply don't.

[VegasWolf]

17. Right! and outsourcing our jobs to China and India is just wonderful!!!nt

[athena]

21. Immigration has nothing to do with outsourcing.

Workers in China don't spend money here the way immigrants do. They don't start businesses here the way immigrants do. They don't pay taxes here the way immigrants do.

Really, I'm amazed at the level of illogical knee-jerk reactions here.

[primavera]

31. Bingo!

That's really the crux of the issue: immigrants, both legal and illegal, spend money while they're here, the overwhelming majority pay taxes, and therefore create jobs even as they consume them; in other words, the economy grows.

This is why quantifying the cost of immigration is so difficult to pin down: yes, there are costs, but there is also economic growth as a direct consequence of migration. White supremacist groups like the Federation for American Immigration Reform and the Center for Immigration Studies produce dramatic numbers on the costs of immigration by choosing to examine only the costs without calculating in the benefits. And that's just absurd, that's like saying it costs X amount of money to start a new business, ergo, no one should ever start a new business. Well, sure, if you only look at the costs, but what about the Y amount of money the new business generated? If Y>X, starting the business was a good move. Whether, in this case, Y does in fact exceed X is a valid question, but to pretend that immigration only generates costs and no revenues is a totally flawed way of looking at the matter, yet, sadly, it seems to be how a great many people choose to look on it.

[anotherdrew]

18. bullshit... bullshit... bullshit...

how does a man with no income no place to live pursue education?

How does that man get a decent job if all the light construction work is going to illegals? Meanwhile the illegals are ruthlessly exploited as near slave labor. Bullshit.

[superconnected]

23. this means the problem isn't the immigrants, it's the business owners.

stiffer fines for hiring illegals, could be in order.

[anotherdrew]

25. exactly, a lot cheaper to enforce that way too

with no ready job market the few illegals that would come anyway would be small. enforce the laws we have against known violators. Food production in my state openly hires illegal workers and pays them squat, because they "can't afford to" pay a living wage to people who only produce our food. Maybe I should tell my landlord I can't afford the rent so will only be paying half from now on. Billions a year in farm subsidies, yet no money to pay people to make the stuff, it's insanity.

[Robert Oak]

22. hmmm, separate illegal versus legal versus temp?

It's been proven in multiple studies that illegal does hurt wages
as well as temp VISAs like the H-1B.

It's also been proven in studies that legal immigration, and why
there is a limit on the number of entries, does increase overall
to the economy and does not hurt native workers and does not decrease wages overall.

This issue is so mis-understood all we need is another study to skew things more.

What happened to objectivity?

[padia]

27. We lived through the 1800's

our own history shows us that within 3 generations people become acculturated. It is when we decide to despise those who are not pigmently challenged that they create prosperous enclaves. Yet the boats in the harbor still float. Labor issues like this have more to do with racism and splitting the proletariat than they do anything else.

[1932]

29. Whether someone "acculturates" shouldn't matter. Go to any highschool

in America and look at the variety of "cultures" among non-immigrants and you realize that a lot of Americans aren't really "acculturating."

What matters is if people are being responsible citizens and making valuable contributions to society through their labor. The vast majority of people in this country, regardless of citizenship, are doing just that.