National Immigration Economics: Who's Right?
By Cardiff de Alejo Garcia

In addition to disagreements over national security and human rights, a substantial part of the escalating debate over immigration policy is the impact of immigration on the American economy — and, more contentiously, on the American worker.

Does immigration help or harm the economy? Do immigrants take jobs from native-born Americans? Or are they doing the kind of low-skilled and low-paying jobs that Americans don’t want?

The answers to these and other questions depend on which politician, economist, survey or study you choose to believe. Although plenty of economic research has been done on the subject, some of it is contradictory. And understanding the economics of immigration is inherently complex. Consider just a few of the variables that must be accounted for: whether the immigrants under discussion are skilled or unskilled; the broad impact on the national economy versus specific regions; and the education and wage levels of both the immigrants and native-born workers.

The debate in the U.S. revolves mostly around immigration’s impact on low-wage and lesser-educated Americans. Economists and researchers have pushed beyond the simplistic commentary of politicians and pundits to understand this impact. But different economists use different methodologies to arrive at their conclusions, making comparison difficult.

“The trouble with all this empirical work is that it sometimes tends to be all over the place,” said Jagdish Bhagwati, a Columbia University economist and author who supports policies that integrate immigrants into the workforce.

Immigration opponents argue that immigrants take jobs from native workers and depress wages – especially for less-educated and lower-skilled Americans. "I don't think you need a professor to understand that when you import substantial cheap labor, it displaces American workers," Sen. Byron Dorgan (D-N.D.) told The Washington Post.   

These critics emphasize the harmful effects on certain communities and population segments, especially low-wage workers. Their logic is that because immigrants to the U.S. are mostly poor and uneducated, they represent competition for similarly poor and uneducated Americans for jobs. 

In a 2004 study, Harvard’s George Borjas supported this argument by concluding that immigration reduced the wages of high school dropouts — roughly the poorest 10 percent of American workers — by 7.4 percent.

“The argument that America needs illegal aliens and high levels of legal immigration only makes sense if one ignores the plight of less-educated native-born Americans,” wrote Stephen A. Camarota of the Center for Immigration Studies, a think tank that supports less immigration, in a March 2006 report.  “In areas of the country with the largest increase in the number of less-educated immigrant workers, less-educated natives have seen the biggest decline in labor force participation,” he concluded.  

Immigration’s supporters, however, argue that the matter is not so simple.  The economic research opposing immigration is “ignoring the role that immigrants play in expanding the economy and stimulating labor demand through their consumer purchases and investments,” said Dan Siciliano, executive director of Stanford Law School’s Program in Law, Economics, and Business, in testimony to the U.S. House of Representatives last November.

“Many of the jobs that would be harder to fill without this labor supply are already associated with immigrant labor: construction, agriculture, meatpacking, and hospitality,” Siciliano said.  He cited data from the U.S. Bureau of Labor Statistics demonstrating the important role that immigrants will play as an additional source of labor over the next decade. 

Proponents of immigration also point to a 1997 study by the National Research Council saying that immigration may add up to $10 billion in Gross Domestic Product to the U.S. economy, increasing overall production and helping to keep consumer prices down. 

More recently, two economic studies have determined that immigration has little to no impact on low-wage American workers.  “Overall, evidence that immigrants have harmed the opportunities of less educated natives is scant,” writes David Card of the National Bureau of Economic Research in a report.

A study completed earlier this year by economists Gianmarco Ottaviano and Giovanni Peri maintained that from 1980 to 2000 immigration actually increased the average wages of native workers by about 2 percent. Rather than competing for the same jobs, immigrants tend to take jobs that complement those of native workers, Ottaviano and Peri said.  This leaves both groups in better shape.