Don't Blame Immigrants For Poverty Wages

Our love-hate relationship with foreign-born workers has once again taken center stage in the national drama over immigration, only now it's set against a backdrop of heightened concerns over national security and an unprecedented geographic dispersal of the foreign-born. Legal as well as undocumented immigrants are widely blamed for displacing U.S. workers and driving down wages.

Yet even as vigilante groups organize to patrol the U.S.Mexico border, and even as local ordinances restricting employment, housing, and services for undocumented workers proliferate, millions of unskilled foreign-born workers secure jobs in U.S. construction, hospitality and extraction industries, and miscellaneous dwelling-repair and domestic services -- jobs that American employers have a hard time filling with native-born workers. The Migration Policy Institute reports that about 14 percent of U.S. workers today are foreign-born -- a total of 20 million, of which 7 million, or 5 percent of the total labor force, are estimated to be unauthorized, according to the Pew Hispanic Center. Immigrants filled half of all new U.S. jobs created during the 1990s, and at least 60 percent since 2000, which further demonstrates our growing reliance on foreign labor.

If experts disagree about the extent of labor-market competition between foreign- and native-born workers, there is general consensus that immigrants largely complement the skills of domestic workers, with the possible exception of high-school dropouts. About one in five low-wage workers today are foreign-born, as are roughly 40 percent of workers with less than a high-school education. This means that fully 60 percent of low-skill workers are made in America. Their declining fortunes may be aggravated modestly by unskilled immigration, but global competition -- through trade and advances in technology -- are the main culprits. Still, immigrants serve as scapegoats for the plight of less-educated native workers because, unlike macro-economic forces, they can be identified -- and because millions lack legal status, and therefore rights. Thousands of employers take advantage of this status handicap, but it can be remedied if immigrants are allowed a pathway to citizenship.

For their long hours of hard work at difficult and often dangerous jobs, legal immigrants average $700 weekly, compared with $930 for naturalized citizens, and a meager $350 for recently arrived undocumented immigrants, according to recent estimates by the Pew Hispanic Center. Unauthorized migrants who have lived in the United States for five years or more reap a bonus for U.S. work experience, averaging $480 per week. The unstable nature of the jobs that many unskilled immigrants hold makes it difficult for studies to estimate annual earnings, but an optimistic scenario of 50 weeks at the average wage guarantees below-poverty annual incomes: $17,500 to $24,000 for recent and established undocumented immigrants, compared with $46,000 for naturalized immigrants.

These economic disparities bear a key policy lesson and suggest a straightforward remedy that must be factored into legislation crafted to revamp the U.S. immigration system and realign it with basic principles of a liberal democracy. First, legal status profoundly affects the economic and social mobility of millions of foreign-born workers. The Immigration and Reform Control Act of 1986 and its amnesty program provided incentives for undocumented workers to upgrade their skills and eliminated the wage penalty for illegal status. Using data from the last legalization program, George Borjas of Harvard's Kennedy School and I estimated that legal immigrants averaged 30 percent higher earnings than their undocumented counterparts from the same regional origin; economists Sherrie Kossoudji and Deborah Cobb-Clark calculated the wage penalty for being unauthorized during the 1980s at 14 percent to 24 percent, and the benefit of legalization around 6 percent. With 7 million workers eligible for status adjustment today, this represents a formidable economic stimulus, which can also produce significant multiplier effects through consumption.

Second, our need for foreign-born workers is not likely to abate anytime soon, given irreversible trends in population aging. This is precisely why important sectors, especially in services, have turned to low-skill immigrant workers to fill persistent vacancies. The remedy for low wages in these sectors is not to scapegoat immigrants, but to restore worker bargaining rights and wage protections for immigrant and native workers alike.That unskilled immigrants compete with U.S.-born high-school dropouts in some labor markets hardly warrants crafting immigration policy around the plight of our low-educated workers. A more enlightened response, and one that could also help strengthen the U.S. economy generally, would focus on upgrading skills of all workers, native- and foreign-born alike, as a hedge against the intensifying headwinds of global competition. Because immigrants add to the U.S. economy in myriad ways -- through high rates of labor-force activity, through job creation, through consumption, and through scientific innovation -- human capital investment is the soundest antipoverty policy. For immigrants, it has the added advantage of promoting civic integration. Equalizing labor rights by creating a pathway to citizenship for those already working in the United States is the necessary first step in this direction. We ignore this opportunity to secure our future at the peril of losing our status as the world's leading economy.