Immigrant Job Gains and Native Job Losses 2000 to 2004

By Steven A. Camarota on May 4, 2005

Testimony Prepared for the House Judiciary Committee
Subcommittee on Immigration, Border Security and Claims

May 4, 2005

This testimony is drawn directly from a Center's October 2004 report entitled A Jobless Recovery? Immigrant Gains and Native Losses.

Steven A. Camarota
Director of Research, Center for Immigration Studies

Mr. Chairman and members of the subcommittee: Thank you for inviting me to testify on the impact of immigration on the labor market during the recent economic slow down. My name is Steven Camarota, and I am Director of Research at the Center for Immigration Studies, a non-partisan think tank here in Washington.

Prior to the economic slowdown that began in 2000, I had generally assumed that the primary impact of immigration would have been to reduce wages and perhaps benefits for native-born workers but not overall employment. An important study published in 2003 in the Quarterly Journal of Economics showed that immigration reduces wages by 4 percent for all workers and 7 percent for those without a high school education.1 A significant effect to be sure.

However, after a careful examination of recent employment data, I have become increasingly concerned that immigration may also be reducing employment as well as wages for American workers. A study by the Center for immigration Studies published last year shows that between March 2000 and March 2004 the number of unemployed adult natives increased by 2.3 million, but at the same time the number of employed immigrants increased by 2.3 million.2 By adults I mean persons 18 and older. About half the growth in immigrant employment was from illegal immigration. And overall the level of new immigration, legal and illegal, does not seem to have slowed appreciably since 2000. By remaining so high at a time when the economy was not creating as many new jobs, immigration almost certainly has reduced job opportunities for natives and immigrants already here.

Of course, it would be a mistake to assume that every job taken by an immigrant is a job lost by a native, but the statistics are striking. And they should give serious pause to those who want to legalize illegal aliens instead of enforcing the law and reducing the supply of workers. Not only did native unemployment increase by 2.3 million, but we also found that the number of working-age natives who said they are not even looking for work increased by 4 million. Detailed analysis shows that the increase was not due to early retirement, increased college enrollment, or new moms staying home with their babies.

Our analysis also shows little evidence that immigrants only take jobs Americans don't want. For one thing, immigrant job gains have been throughout the labor market, with more than two-thirds of their employment gains in jobs that require at least a high school degree. However, it is true that immigration has its biggest impact at the bottom end of the labor market in relatively low paying jobs typically occupied by less-educated workers. But such jobs still employ millions of native-born workers.

In job categories such as construction labor, building maintenance, and food preparation, immigration added 1.1 million adult workers in the last 4 years, but there were nearly 2 million unemployed adult natives in these very same occupations in 2004. About two-thirds of the new immigrant workers in these occupations are illegal aliens. Those arguing for high levels of immigration on the grounds that it helps to alleviate the pressure of tight labor markets in low-wage, less-skilled jobs are ignoring the very high rate of native unemployment in these job categorizes, averaging 10 percent in 2004.

Not only is native unemployment highest in occupations which saw the largest immigrant influx, the available evidence also shows that the employment picture for natives looks worst in those parts of the country that saw the largest increase in immigrants. For example, in states were immigrants increased their share of workers by 5 percentage points or more, the number of native workers actually fell by about 3 percent on average. But in states where the immigrant share of workers increased by less than one percentage point, the number of natives holding a job actually went up by 1.4 percent. This is exactly the kind of pattern we would expect to see if immigration was adversely impacting native employment.

Of course, businesses will continue to say that, "immigrants only take jobs Americans don't want." But what they really mean is that given what they would like to pay, and how they would like to treat their workers, they cannot find enough Americans. Therefore, employers want the government to continually increase the supply of labor by non-enforcement of immigration laws.

I would argue forcefully that one of the best things we can do for less-educated natives, and legal immigrants already here is strictly enforce our immigration laws and reduce the number of illegal aliens in the country. We should also consider reducing unskilled legal immigration.

This would greatly enhance worker bargaining power vis-a-vis their employers and would result in lower unemployment rates and increased wages and better working conditions for American workers, immigrant and native alike.