Low Paid American Workers Have Borne the Heaviest Impact of Immigration
Americas Quarterly, Spring 2007
The United States needs fewer immigrants, not more. Lower levels of immigration, both legal and illegal make sense for my country because the growing number of undereducated people crossing our borders have hurt less educated native-born workers. The U.S. needs to focus on reducing overall immigration levels. This means a drop in the number of immigrants from Latin America, which accounts for half of the new arrivals, many of them at the lower end of the educational spectrum.
The number of immigrants - legal and illegal - living in the U.S., is growing at an unprecedented rate. U.S. Census Bureau data indicate that 1.6 million legal and illegal immigrants settle in the country each year. IN 2006, the immigrant, or foreign-born population, reached about 38 million in the United States. Roughly 12 million of these were illegal aliens. Legal and illegal immigrants now account for one out of every eight persons living in the United States. As recently as 1970 the proportion was one in twenty residents. The U.S. has never confronted an immigrant population that has grown this much, this fast.
Low-paid American workers have borne the heaviest impact of immigration. This is largely because of the educational profile of the bulk of today's immigrants. Nine percent of adult native-born Americans (ages 18 to 64) were high school dropouts in 2006, while 34 percent of recent adult immigrants had not completed high school. (The rate was 60 percent for illegal immigrants.)
Common sense, economic theory, and a fair reading of the research on this question indicate that allowing in so many immigrants (legal and illegal) with relatively little education reduces the wages and job prospects for Americans with little education. These are the Americans who are already the poorest workers. Between 2000 and 2005, the number of jobless natives (age 18 to 64) with no education beyond a high school degree increased by over two million, to 23 million, according to the Current Population Survey. During the same period, the number of less-educated immigrants (legal and illegal) holding a job grew 1.5 million.
Of greater concern, the percentage of employed native-born without a high school degree fell from 53 to 48 percent in the last five years. African Americans have particularly been affected. A September 2006 National Bureau of Economic Research paper found that immigration accounted for about a third of the decline in the employment rate of the least-educated African American men over the last few decades.
The disproportionate flow of undereducated immigrants to the U.S. has also depressed wages for native-born workers on the lower rungs of the economic ladder. In the last two-and-a-half decades, average hourly wages for male workers with less than a high school education declined more than 20 percent relative to inflation. For those with only a high school degree they are down almost 10 percent.
Typically, pro-immigration voices argue that immigration is essential because there are not enough Americans to fill all the low wage jobs. But if this were so, then the wages and employment rates of such workers should be rising as employers try desperately to retain and attract workers. Yet quantitative evidence for such a phenomenon doesn't exist. The only evidence of a labor shortage comes from the employers.
In addition to harming the poorest and least educated American workers, our immigration system has created a large burden for taxpayers. The best predictor of poverty and welfare dependence in modern America is education level. Given the low educational levels of most recent immigrants, we would expect them to be a greater drain on public coffers than the immigrants who came before them. Indeed this is the case. In 1997 the National Academy of Sciences (NAS) estimated that immigrant households consumed $20 billion more in public services than they paid in taxes each year. Adjusted for inflation, with the current size of the immigrant population today, this figure would be over $40 billion.
Immigrants from Latin America place an especially heavy burden on American taxpayers. For example, 57 percent of household headed by Dominican immigrants in 2004 used at least one major welfare program; 43 percent of Mexicans took advantage of at least one welfare program; and about a third of the households headed by immigrants from Central America, Cuba and Columbia use the welfare system. In contrast only 18 percent of native households receive welfare assistance.
The biggest problem for taxpayers is not illegal aliens - though they are a drain. The biggest problem is less-educated legal immigrants, who represent the majority of the immigrants from Mexico and Central America. My own research indicates that the net costs (taxes paid minus services used) to the federal government alone would roughly triple if illegal aliens were legalized and began to use services and pay taxes like legal immigrants with the same level of education.
Even if one conceded that allowing in less-educated immigrants is bad for less-educated Americans, are there any economic benefits from immigration? The best research on the subject shows that if there is a benefit it is tiny or "miniscule," in the words of the nation's top immigration economist, George Borjas of Harvard University. The NAS study found that by reducing the wages of the least-educated Americans (about 10 percent of the population), immigration generated an economic benefit for the rest of society equal to just two-tenths of one percent of their income.
One common argument for immigration is that American society is aging. We are told that we need young workers. But demographers have found that immigration actually has only a small impact on this problem. The 2000 Census showed that 66.2 percent of the population was of working age (15 to 64). If all post-1980 immigrants (legal and illegal) and their U.S.-born children are not counted, the working-age share would still have been 65.9 percent in 2000.
The current system, which allows people into the country if they have a family member here, is simply not sustainable. The goal of reform should be an immigration system that allows in fewer low-skilled immigrants. Actually enforcing current immigration laws would be a good first step.
Steven Camarota is Director of Research at the Center for Immigration Studies.