Are immigrants taking jobs away from US workers, and lowering wages? It’s an age old question, one that many people use to fuel their distrust and dislike of immigrants and migrant workers, and it’s being furiously debated once again, just as it was during the 2016 election by a very polarized Trump and Clinton.
At that time, a study was published from the National Academies of Sciences, Engineering and Medicine , that looked at the research of 14 lead economists, and offered research from both sides of the debate. It presented one of the most balanced and thorough viewpoints on the topic to date. Since the number of immigrants in the US had increased from 24.5 million in 2005 to over 43 million in 2014, it seems like an important point to get right.
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But that’s not the only study on immigrants in the workforce
In 2017 the National Academy of Sciences, Engineering and Medicine put out a study called The Economic and Fiscal Consequences of Immigration.
The document – which was an update of one done in 1995- found that immigration has a positive effect on the economy.
Highlights of the study include the following:
- While fears of immigration often include that they are “taking jobs and money away from US citizens,” the long-term impact of immigration on the wages and employment of native-born workers overall is very small.
- Any negative impact on wages were most likely to be found for prior immigrants who had become naturalized, or native-born high school dropouts.
- Immigration enlarges the economy while leaving the native population better off, on average.
- Highly skilled immigrants with university degrees and specialized skills that benefit the economy through innovation and entrepreneurship drive up wages and job opportunities for both immigrants and US citizens.
Programs like DACA provide a path for immigrants to become integrated, contributing and tax paying members of our society, as well as adding to our general wellbeing.
In fact as I wrote about in another post about DACA , recent research by the Center for American Progress shows that cancellation of DACA would reduce the gross domestic product of the US by 433 billion in ten years!
Finally, a more recently in a study from 2022, called Immigration and Entrepreneurship In the United States took a closer look at how immigration shapes the economy. They analyzed immigrants’ contributions as both employees and founders, focusing on both the number and the size of companies that immigrants start.
Do immigrants take jobs away from US workers?
According to Francine D. Blau, an economics professor at Cornell University who led the group that produced the original 550-page report from 2016, “We found little to no negative effects on overall wages and employment of native-born workers in the longer term.”
Wage and employment outcomes were tied to the extent to which new arrivals ( or new immigrants) compliment or substitute for workers already established in the labour market.
[It is only]when new arrivals compete with those already in the labour force – for example if unskilled immigrants and native-born teenagers (or earlier immigrants) are applying for the same fast-food jobs wages and job opportunities for the latter may be negatively impacted…in the short run.
As I have written about before, many immigrants take low paying, or physically demanding jobs that many US citizens don’t want to do. In these cases, which represent a significant portion, the immigrants are actually beneficial to the economy in that they are filling in a labor demand that our citizens can’t or don’t want to fill. In fact the study found that new immigrants really only had the potential to negatively economically impact two demographics:
- US Teenagers who had not competed high school: less working hours, but didn’t affect their ability to find jobs
- Immigrants who had been here longer, but hadn’t moved out of their initial forms of low-wage labor. New immigrants would be competing for the same jobs.
Immigrants that don’t fit into those categories are normally highly skilled, and are brought in because those skills can’t be found in the US already.
In fact immigrants can add jobs and wage gains for all
When it comes to skilled labor, and specialized areas of study, immigrants have positively impacted our economy in measurable ways. As the report states: “The prospects for long-run economic growth in the United States would be considerably dimmed without the contributions of high-skilled immigrants.”
When we invite or allow immigrants into our country who are bringing skills or specializations that we are not currently filling, the outcome is job creation and a boost to wages becomes a “likely outcome”. The report found a positive relationship between immigration and economic growth saying:
Long run growth requires infusions of labor, various forms of capital – both physical and human capital – and technology. Given native born fertility rates, and age profiles in the United States, immigrants are the most likely candidates for generating net labor force growth. Likewise [immigrants] contribute to capitol innovation and formation, which also shapes the way and the pace at which growth unfolds.
Immigrants are more job creators, than job takers
The authors of the most recent study from 2022 are Azoulay, who is the International Programs Professor of Management at MIT Sloan; Benjamin Jones, the Gordon and Llura Gund Professor of Entrepreneurship and a professor of strategy at Northwestern University’s Kellogg School of Management; J. Daniel Kim PhD ’20, an assistant professor of management at the University of Pennsylvania’s Wharton School; and Javier Miranda, a principal economist at the U.S. Census Bureau.
They looked at data from more than a million businesses, as well as using data from both the U.S. census and Fortune 500 companies.
What did they find?
Per capita, immigrant-owned firms hired on average 1% more employees than those started by native-born citizens.
Immigrants also display entrepreneurial rates higher than native-born populations, and historically play a key role in small scale retailing like nail salons, ethnic restaurants, child and elder care etc…that help revitalize urban (and sometimes rural) centers.
The findings from the study suggest that immigrants act more as “job creators” than “job takers” and play outsized roles in US high-growth entrepreneurship.
“[Immigrants] create more firms pretty much in every size bucket,” said Azoulay”They create more small firms, they create more medium sized firms. They create more firms that will grow up to be very large.”
The Fortune 500 list is full of immigrants
Immigrants are not only filling lower income jobs that many Americans don’t want, they are also creating jobs, businesses, and wealth at the top tier. According to the Fortune 500 list, 1 in 5 Fortune 500 companies were started by an immigrant. If you include the children of immigrants, the list swells to represent over 40% of all Fortune 500 companies.
Each of these companies was found to employ an average of 67,580 workers per company – and new immigrant companies employed an average of 20% more employees than non immigrant companies, in over 68 different fields.
Immigrants are a part of what makes America great
CURRENT STATISTICS SAY THAT 1 IN 4 AMERICANS ARE EITHER IMMIGRANTS OR CHILDREN/GRANDCHILDREN OF IMMIGRANTS. AND AS THIS REPORT PROVES, IMMIGRATION NOT ONLY ADDS TO THE FABRIC OF OUR SOCIETY, IT ACTUALLY HELPS US GROW.
If you have any questions about this or any other immigration related topic, please do not hesitate to contact me at Harlan York & Associates.
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