HispanicVista Columnists

As economy continues to produce jobs with low formal education requirements, immigrants will fill gaps in labor force

A new report from the Immigration Policy Center (IPC), a Washington, DC-based think tank, finds that continued flows of immigrants will be an important part of future economic growth in the United States. The report examines demographic changes in the native-born population and compares the gaps created by those changes to the labor provided by immigrant workers.
“As the native-born workforce becomes older and better educated, gaps are created in our workforce for those jobs that favor younger and less educated workers,” said Benjamin Johnson, IPC Director. “The trend toward a better educated workforce is not something we want to reverse, but it clearly poses a challenge for an economy that continues to experience significant growth in jobs that require very little education or training.”
According to Bureau of Labor Statistics (BLS) projections, many of the 58 mostly service industries projected to have faster than average employment growth between 2002 and 2012 employ workers in less-skilled jobs. For instance, BLS projects that employment services, doctors’ offices, food services, and construction, will account for 5.3 million additional jobs, or a quarter of the total expected to be added by 2012.
According to IPC’s analysis of BLS and Census data, current rates of immigration are consistent with BLS assumptions on the average numbers of arrivals needed to create a workforce of 162 million in 2012. However, recent studies indicate that more than half of today's immigration is coming outside the system through undocumented immigration. As a result, absent a change in U.S. immigration law, undocumented immigrants are likely to account for more than 12 percent, or one-in-eight new entrants to the labor force between 2002 and 2012.
“One of the most important functions of an immigration system is to fill the gaps between native labor supply and domestic labor demand. Unfortunately, the current immigration system is failing on that score. We are getting the immigrants we need, but far too many are arriving outside of the system,” said Johnson. “The large flow of undocumented immigrants is the predictable result of an immigration policy that is out of step with the economic realities of today. What we are seeing is a struggle between economics and immigration policy, and economics is winning. Until our immigration system is better able to respond to the need for these workers, undocumented immigration will continue to be a problem,” said Johnson.
The report also examines economic arguments that the presence of immigrant workers in the labor force greatly depresses wages for native-born workers. According to the report, the age and education profiles of most immigrant workers mean they compliment the native workforce rather than compete with U.S. workers, decreasing any effect on wages. Furthermore, the report explains that immigration critics often use a flawed economic analysis to justify their conclusions.
“It seems like a natural consequence of supply and demand,” said Johnson. “More workers to fill jobs translate into lower wages, but economic reality is not that simple. For the most part, immigrants and native workers aren't competing for the same jobs, and the presence of immigrants does more than increase the supply of labor; it increases the demand for labor as well.”
IPC’s analysis determined that the presence of immigrants increases labor demand because immigrants serve not only as producers of goods, but also as consumers.
“They buy groceries, rent apartments, and buy homes, cars, and clothes. All of those purchases put upward pressure on wages, greatly mitigating any impact of the increased labor supply,” according to Johnson.
The report concludes that the U.S. economy will depend upon the continued presence of immigrants to sustain its current growth rate.
According to Johnson, “Economic growth has real consequences for American living standards. Immigrants are a vital part of our workforce and it is important that policymakers recognize that reality and implement pragmatic policies that address these future demographic challenges while securing the border. Immigration policy has to focus on who we want to let in, as well as who we want to keep out. If the current laws did a better job of letting the workers we need to come in, the government would have an easier time figuring out who we wanted to exclude.”
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Mike Chittenden mchittenden@ailf.org 202-742-5608
IPC RESEARCH FELLOW DAN SICILIANO, LEAD AUTHOR OF THIS REPORT WILL TESTIFY BEFORE THE UNITED STATES HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE ON WEDNESDAY, NOVEMBER 16, 2005 REGARDING THE REPORT'S FINDINGS. FOR COPIES OF MR. SICILIANO'S TESTIMONY, PLEASE CONTACT MIKE CHITTENDEN AT MCHITTENDEN@AILF.ORG.