Dec 05, 2014 - 1:45pm

Immigrants are Good for the Economy


Senior Editor, Digital Content

Are immigrants good for the economy?

In the debate over immigration reform, we come back to this argument again and again. The answer is still, "Yes."

The latest salvo involves a paper by Steven Camarota and Karen Zeigler of the Center for Immigration Studies that is part of series of papers by the Center trying to show that job growth is only going to immigrants. In their paper looking at New Hampshire’s labor market, Camarota and Zeigler conclude that foreign-born workers take jobs away from native-born workers. 

A former chief economist for the Labor Department dismantles their argument. In a study on immigration and economic growth, Diana Furchtgott-Roth,a senior fellow at the Manhattan Institute, finds major flaws.

The biggest problem is that Camarota and Zeigler treat labor as homogenous, which isn’t the case:

As Current Population Survey data show (the same used by the authors), immigrants select different occupations from those of natives. In addition, Camarota and Ziegler ignore the U-shape distribution of immigrants’ education, incorrectly assuming that low-skill immigrants compete with low-skill Americans. (In reality, superior English language skills usually make low-skill Americans relatively more skilled than their immigrant counterparts.)

Nor is it likely that most undocumented immigrants compete with American high school graduates for jobs. Undocumented immigrants tend to work in jobs that do not require interaction with customers, such as dishwashing, lawn care, and house care. (If anything, low-skill immigrants might displace high school dropouts, but as BLS data show, this group has seen increased labor-force participation since 2000.) On the other hand, Americans with high school degrees usually have the skills to find work in service and sales jobs: Camarota and Ziegler fail to demonstrate that there are native job seekers available to take those jobs (whether high- or low-skill) where immigrant employment increased.

What's more, Furchtgott-Roth notes that the authors didn’t account for New Hampshire’s unique geography:

The number of New Hampshire residents who work in Massachusetts has grown significantly in the past decade. This trend has not, however, snatched employment opportunities away from natives in the more localized New Hampshire labor market but rather brought preexisting employment and incomes into the state.

Oddly, too, Camarota and Zeigler count Massachusetts workers who move to New Hampshire as “immigrants,” as part of their 21,000-person figure of the number of employed immigrants living in New Hampshire. The authors compare this figure with the 8,700 increase in native-born employed persons living in New Hampshire and then cite an increase of 41,000 “non-working” native-born New Hampshire residents between 2000 and 2014—arguing that the growth of immigrant employment came at the expense of native employment.

Camarota and Zeigler also mistakenly mix the unemployed—those able and looking for work--with those who are not employed for an assortment of reasons—retired, students, the disabled, etc. 

In contrast to the conclusions of Camarota and Zeigler, academic research has found that immigration “leads to higher economic growth.” This is because “immigrants complement rather than substitute for native-born workers, with capital moving accordingly to maximize available labor,” writes Furchtgott-Roth.

For instance, immigrants and native workers pursue different careers:

Low-skill immigrants are disproportionately represented in the service, construction, and agricultural sectors—prominent in occupations such as janitors, landscapers, tailors, plasterers, stucco masons, and farmworkers….

Similarly, high-skill immigrants tend to prefer certain types of high-skill occupations (research scientists, dentists, computer engineers, etc.) and are less prominent in other high-skill fields (lawyers, judges, education administrators, etc.) favored by high-skill Americans.

What's more, immigrants also help the economy grow faster, because they’re more likely to be entrepreneurs:

Immigrants are disproportionately entrepreneurial, boosting tax revenue and creating more jobs for Americans, according to Tim Bolin of the University of California at Berkeley. Some 44 percent of high-tech Silicon Valley businesses had at least one immigrant founder. In 2012, U.S. engineering and technology firms founded by immigrants in the 2006–12 period employed approximately 560,000 workers, generating $63 billion in sales.

Despite their best attempts, immigration reform critics can’t refute the abundant research available showing that immigrants create jobs and strengthen our economy. All the more reason to fix our broken immigration system.

More Articles On: 

About the Author

About the Author

Sean Hackbarth standing in front of oil pumps near Baker, Montana.
Senior Editor, Digital Content

Sean has written for various Chamber properties since 2012. In 1999, Sean launched a “weblog” and never looked back, becoming a self-proclaimed pioneer of the medium.