Robert L. Sharp: The net effect of immigration

June 6, 2009 

As predictable as how gravity works, people will flow toward opportunities that improve their lives and that of their families.

However, people believe immigrants take jobs away from American workers, collect an excess of government benefits, are a burden on our schools, health care and public services and, in general, represent a drain on the economy.

During the Bush administration, a U.S. Department of Labor study noted that the perception that immigrants take jobs away from American workers is "the most persistent fallacy about immigration in popular thought" because it is based on the mistaken assumption that there are only a fixed number of jobs in the economy.

It is not understood the economy is not static, but rather geographic and industrial sectors are shifting and expanding or contracting all the time.

According to a 1992 Los Angeles Times analysis summarizing the best available research, "Immigrants contribute mightily to the economy, by paying billions in annual taxes, by filling low-wage jobs that keep domestic industry competitive, and by spurring investment and job-creation, revitalizing once-decaying communities. Many social scientists conclude that the newcomers, rather than drain government treasuries, contribute overall far more than they utilize in services."

Studies by the RAND Corp., the University of Maryland, the Council of Economic Advisors, the National Research Council and the Urban Institute all show that immigrants do not have a negative effect on the earnings and employment opportunities of native-born Americans.

Americans can see the jobs immigrants fill, but not the jobs they create through productivity, capital formation and demand for goods and services.

A key point is an increased supply of migrants is likely to push native workers up into jobs where they perform supervisory, managerial, training and interactive and coordinating tasks, which makes them more productive. Language skills explain a lot of this.

Moreover, the presence of new workers also implies higher demand for consumption, so that immigration might simply increase total production and demand without depressing wages.

The nonpartisan Public Policy Institute of California published an economic analysis by Giovanni Peri of UC Davis in 2007 looking at how immigrants affect the jobs and wages of U.S.-born workers in California.

It found U.S.-born workers were not displaced because of immigrants moving into the state.

Between 1990 and 2004, the real wages of U.S.-born workers received a positive boost -- an estimated 3 to 5 percent -- from the presence of immigrants in the workforce. The amount that wages increased varied, depending on age and education, but almost without exception, the results were positive for U.S.-born workers.

Immigrants pay more than $90 billion in taxes every year and receive only $5 billion in welfare. Mind you, it depends on where you stand. If you are a local councilman or county supervisor, you see the draw on local services, but not the income received by the IRS.

If educating the children of illegal immigrants is included in the equation, there is a large drain on public funds. However, most children of illegal immigrants were born in the United States, are U.S. citizens and are thus entitled to be educated in the public schools

As to illegal immigrants, they come to this country for two understandable reasons: jobs and family reunification. Family members, many of whom are U.S. citizens, can provide housing and information about jobs.

The vast majority of illegal immigrants in the U.S. are Latino. Over half are from Mexico. Another 24 percent are from other Latin American countries, most notably El Salvador, Guatemala, Honduras, Colombia, Ecuador and the Dominican Republic.

Although their share of the total is low, hundreds of thousands of illegal immigrants also come from Asia and Europe. In Asia, the leading countries of origin are China, the Philippines and India.

Ironically, as for Latinos, increased border enforcement has had the unintended consequence of increasing the number of illegal immigrants living here. Many who once came to work seasonally and returned home now cannot do that as easily.

We make a lot of noise about immigration, legal and illegal, but ultimately do nothing about it. Why? Because loss of these people would be a blow to our economy. More to the point, we can't do anything about it.

Think about your gardener, your favorite restaurant and the truck drivers who bring goods from the ports. Everywhere you look, we depend on an infrastructure supported by immigrants.

Robert L. Sharp grew up in Linden and spent most of the following 30 years as an international banker in Asia including four years as a Naval officer in that part of the world.

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