Why Immigrants Boost American Jobs

NDN’s Globalization Initiative and our Hispanic Strategy Centre tend to roam in different parts of the forest. But we join in our interest in story’s like this morning’s Post piece saying that immigrants don’t destroy American jobs. Why is this news? Apocalyptic visions of House Republicans certainly has more to do with it than any earth shattering economic revelation. It is worth restating, nevertheless, that there is no reason in theory to think that immigrants “take American jobs.” (See the “Lump of Labor fallacy for more on this.) In fact, there are some reasons to think that immigrants can increase employment. A recent study of immigrant workers in North Carolina found that Latino immigrants did cost $100m more in services than they paid in taxes, something which shouldn’t really be too surprising given the profile of public assistance users generally. But the same group contributed nearly $10 bn – yes, ten billion – in spending, or approximately 90,000 extra jobs.

Wages are a thornier issue. In theory, low skilled immigrants lower the wages of low skilled Americans, for instance high school dropouts or illiterate adults. Whether they do or not is hotly contested in academic literature. But the wider point is that the type of wage stagnation discussed in Rob and Simon's NDN memo earlier this month has, say most economists, almost nothing to do with immigration levels. (Most agree that this is a long-term term trend born of changing returns to skills, new technologies and patterns of trade.) The best overview i've seen of all of this is the excellent Economist Economics Focus for the pros and cons. But note in particular the final line:

None of these studies is decisive, but taken together they suggest that immigration, in the long run, has had only a small negative effect on the pay of America's least skilled and even that is arguable. If Congress wants to reduce wage inequality, building border walls is a bad way of going about it.

Nicely said. I wonder if anyone is listening?