“A simple supply-and-demand framework is useful for considering the potential effect of immigrants on employment opportunities for workers already in the United States.” This simple statement from the Congressional Budget Office (CBO) report, “The Role of Immigrants in the U.S. Labor Market,” encapsulates the issue at hand: whether or not immigrants are a boon or detriment to the American economy. Supply and demand is a simple framework for viewing a complex and emotional problem. The common and widely held misconceptions related to the economic instabilities and native job loss created by immigrants, both legal and unauthorized, most often fail to take into account the facts surrounding the actual available supply of native born workers and the demand that pulls foreign born workers into our economy.
There are two commonly held misconceptions that are bandied among national and local media, lawmakers and many members of the public. First, that illegal immigrants are “taking all of our jobs,” and, second, that illegal immigrants are, basically, wards of the state because of their over-consumption of state welfare services.
The first misconception relies heavily upon anecdotal evidence. In a typical day spent traveling around the Metro Denver area, one can see Spanish-speaking persons of Hispanic or Indigenous Central and South American descent engaged in many openly visible occupations: road and construction crews, janitors, food service workers, and other low-income occupations. The jobs are not hidden away, closeted in wealthy homes as maids and nannies only, instead, the work that is being done by this segment of the population is visible to all and, as such, creates a misconception about the effect on native born workers.
However, research shows that most foreign-born workers are limited to low income occupations by their education levels; while the numbers of native-born persons who do not complete high school is shrinking, the number of foreign born workers who have not completed high school is overwhelming. The effect on U.S. workers is only negative for a small percentage of the population and that percentage is shrinking each year. The concern that immigrants are taking all of the jobs away from U.S. citizens and lowering the wages of jobs that U.S. citizens do are unfounded. In fact, the Bell Policy Center report titled, “Immigration: Effects on Colorado and the Nation,” relates the fact that, “The NRC found that immigrants have little overall effect on wages paid to native workers, including skilled and unskilled, male and female, and minority and white. The NRC found that immigration reduced wages of competing native-born workers by 1 or 2 percent.”
The second misconception assumes that immigrants come to the United States mainly to use our services, while contributing little else. Once again the Bell Policy Center says, “The fiscal balance for immigrants, particularly undocumented immigrants, is one of the most hotly debated aspects of the immigration issue.” The report defines the fiscal balance as, “The difference between what people pay in taxes compared to the cost of public services used”. The report goes on to detail the actual impacts of foreign-born persons on our public assistance systems. The most interesting detail in the report is the fact that unauthorized immigrants use the least amount of services for fear of deportation. This is in direct contradiction to most commonly held perceptions about this population. Another point of interest is that fact that legal immigrants pose a revenue benefit to the federal government and country as a whole, but generally provide an added cost to local and state governments in k-12 education and healthcare services. While this commonly held misconception plays a major role in rhetoric related to immigration reform, conservative, mainstream and liberal analyses all seem to conclude that revoking access to services is not an effective way to reform immigration. Because health and education services cannot be denied to children, revoking services from unauthorized immigrants will only slightly reduce the costs involved in serving them while raising the costs associated with the programs themselves in the form of more paperwork and litigation.
In a Center for Immigration Studies report, Stephen Camerota states that, “Because illegals are not even supposed to be in the country, many Americans are angered by the fact that they receive any services at all. […] Most illegal aliens come for jobs, and the vast majority are in fact employed. But low levels of education mean they unavoidably create large costs for taxpayers.” This statement supports the supposition that it is the illegality and the perceived unfairness of unauthorized immigrants use of services that creates a level of tension and bias among the American public, not necessarily a fact-based understanding of the impacts of unauthorized immigrants upon the system.
Overall, the effect of immigrants on the economy can be evaluated based upon the supply and demand model. The jobs that immigrants fill are jobs that only a small segment of our population can or are willing to fill. The conclusion of the report by the CBO asks:
How would those jobs have been filled in the absence of the new immigrants? Presumably, some of those jobs would have been filled by other workers; in that case, employers might have been required to pay higher wages or to find other ways of making the jobs more attractive. Some jobs might not have been filled at all if employers were not ready to pay the required compensation; in that case, the goods and services would not have been produced. In other cases, employers might have changed the way that they produced those goods and services—for example, by automating or changing the mix of needed skills to better reflect those of the available labor pool.
The jobs created and filled for employers by immigrant workers are jobs that stimulate our economy. A restaurant that is built by immigrant labor will employ native born persons as waitstaff and management, buy produce and supplies from local farms and national vendors, serve food to local patrons, pay taxes to local, state and federal government, and, in some cases, raise surrounding property values. If the restaurant owner had been required to hire only native-born persons to build or remodel her new establishment, the cost may have been prohibitive or she may not have been able to find the labor she needed at all. The loss over time in jobs and local spending would have far outweighed the public cost of the immigrants who worked on the project.
The impact of immigrants on the economy must be evaluated under the same rubric that citizens of this country are evaluated under: consumer spending. Although, immigrants spend less than native born consumers, they contribute to the local economy through spending on necessities, a tortilla salesman mentioned in “Shadowed Lives,” by Leo Chavez, who sold more tortillas to unauthorized workers than to all of his other restaurants combined comes to mind, and through creating new opportunities for Americans to spend. The CBO report cites the creation of new opportunities for American women because of low-cost child-care from immigrant woman. A higher educated American woman in the workforce will pay higher taxes and contribute more to the economy because she can afford her childcare. The report goes on, “Likewise, the additional immigrants may induce greater demand because their presence either generates more demand for the product or attracts more capital”
While immigrants might create a drain on local economies in the form of services for their children, overall they contribute to the economy in the form of job production and goods produced. The public outcry over the loss of jobs is based upon a misconception that has been prevalent in this country almost since its founding.
There is no way to truly isolate the effects of immigration upon our economy. Our country functions under an economic system that literally relies upon the cheap labor provided by immigrants. Without that labor, much of our economic growth would be slowed. Another point, that must be made, is the fact the children born to immigrants generally reach higher education levels than their parents, thus over an immigrant’s lifetime their family contribution to the economy will be positive because of higher pay and higher tax contributions by their succeeding generations. While it is of great concern to state officials that immigrant children are causing a drain on resources, over the long-term, those same children will contribute to the overall economy of the states as adults.
The negative effects of immigrants on our national revenue are nonexistent. Studies show that the income and revenue generated far outweigh the costs. The negative effects on the Colorado economy are in the form of services rendered mostly to children, which cannot be addressed through fiscal policy. Instead those issues can only be addressed through immigration reform in the form of better border security. Even so, if immigration reform includes a guest worker program there is nothing that can stop immigrants from having children in the country, thus the problem cannot truly be solved in regards to services. Instead, legalization and a better work program will allow immigrants to pay more in taxes and also allow them to come out of the shadows to purchase more goods without fear of deportation.
(I have sources available to support all of my claims if anyone is interested.)
Just as a side note: It is not possible for a person to be “illegal.” It is possible for a person to commit an illegal or criminal act. Immigrating to the United States without permission is not a felony offense. When we refer to people as “illegals” it is easy to dehumanize them and not treat their existence with the same respect that we treat others. Likewise, “illegal aliens” results in the same problem. A better term might be “unauthorized.”
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