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Immigration Policy: No, That Immigrant Is Not Taking Your Job Or Keeping You From One

July 30th, 2014

immigrationJonathan H. Todd:  I would be delighted to follow up my appearance on Midpoint: Question Everything with Ed Berliner, in which Ed and I discussed the economic issues around immigration policy, with a few points and references.

On the question of exactly how low-skill, low-wage migrant workers can improve the economy – even in spite of the fact that there is a large pool of already low-skill, low-wage American workers – one must look at exactly how each of those labor pools function, and in which industries and segments of the economy in which they tend to cluster. According to research done by the Brookings Institute, immigrant workers tend to take jobs in industries such as food services, construction, agriculture, and private household labor, whereas domestic workers skew towards utilities, public administration, and arts and entertainment. That is to say, these labor pools operate almost completely distinctively from each other, so by and large, domestic workers and foreign workers are not competing for the same job. That’s a view shared by the American Enterprise Institute, as well.

Distinctly different labor pools for domestic vs. foreign workers Source: Brookings

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Distinctly different labor pools for domestic vs. foreign workers
Source: Brookings

Another statistic that I came across in my research is that 6 million jobs have been created since the year 2000. Since then, 5.9 million jobs have been filled by immigrants – legal or illegal. That is a somewhat misleading statistic, because this effect is largely driven by demographics. That is, baby boomers, who first reached retirement age around 2007, have been leaving the workforce in droves – by 10,000 a day, by some measures – and they are largely a native-born population. In their place, younger workers, who have a larger share of immigrants in their population, have been filling in those jobs left, so by definition, the workforce is becoming more immigrant-heavy.

Also, according to the CBO, the native born labor force has grown by less than 1%, compared to over 5% in the first half of the 2000s, down to a bit over 2% now. Regardless, economic growth depends on two factors – growth in the labor force, and growth in productivity. Because productivity growth has fallen below average, and labor force growth has fallen off sharply in recent years, we have to fix either side of the equation to sustain long-term economic growth.

Are immigrants displacing Americans from jobs?

It’s a bit misleading to say that immigrants have taken all the jobs – it’s more of a function of an aging native-born population.

Of course, this demographic factor that can’t be the exclusive cause of this. Another reason immigrants have been more successful in the job market (they have higher labor force participation rates, and by some measures lower rates of unemployment), is that they are a much more flexible portion of the labor force than native workers.

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