New York Times: Don’t Blame Immigration

Judging by the spate of recent articles on the subject, foreign-born entrepreneurs and STEM workers are finally getting due recognition for their contributions to the U.S. economy: starting high-tech businesses and creating entirely new industries – and jobs – in the process. Although the pace of immigrant entrepreneurship has slowed slightly, according to the latest Kauffman Foundation study, it is hard to miss the larger message, that highly-skilled immigrant workers are an engine of economic growth in this country. [See Kauffman: Immigrant Entrepreneurship Slows Overall, Zooms Among Indians, MurthyBlog, 23.Oct.2012.]

On Capitol Hill, members of Congress are waking up, however belatedly, to the twin realizations that: (a) for the world’s best and brightest, America is no longer the only game in town, and therefore, (b) we have to work harder to attract and retain these smart, creative workers. Before adjourning for the remainder of campaign season, the U.S. House of Representatives tried, and failed, to pass a bill that would have provided more green cards to foreign STEM workers. Election-year politics ensured that the measure “would be a political football instead of an actual law,” according to analysis published by the Bloomberg wire service. [See Blame Politics for the U.S. Engineer Shortage, by Evan Soltas, Bloomberg, 23.Oct.2012.]

When Congress can’t even pass small-scale immigration reforms like this – the necessity of which is widely agreed upon – one has to wonder why. Could it be that years of anti-immigrant rhetoric, though aimed at undocumented immigrants from Mexico and Central America, have made any immigration reform politically impossible, at least in an election year?

Quite possibly – and economic fears may be at the bottom of this. Despite continuing signs of economic recovery, U.S. job growth has yet to return to pre-recession levels, prompting many to wonder where all the jobs have gone. Pundits and politicians have been quick to blame undocumented immigrants for the shortage of jobs – too quick, according to a recent piece in the New York Times by Eduardo Porter. [See Immigration and American Jobs, by Eduardo Porter, New York Times, Economix blog, 19.Oct.2012.]

Porter says it’s understandable that the “blame immigrants” narrative has gained traction during the recession:

“Of all the economic dynamics buffeting the American middle class, immigration might seem the easiest to explain: as millions of poor immigrants from Latin American poured illegally into the country seeking work, the conventional wisdom goes, they competed with more expensive American workers, displacing them from their jobs and undercutting their wages.”

But it’s not that simple, Porter contends, citing research by economists Giovanni Peri, of UC Davis, and Chad Sparber, of Colgate University. At the low-skill end of the labor market, they find, American and foreign workers tend not to compete head-to-head. While Americans gravitate toward jobs that require better communication skills – read: English fluency – immigrants tend to take jobs as manual laborers. Even at the low end of the labor market, Porter points out, “immigration can produce domestic jobs,” without any significant effect on wages for American workers.

The take-home message is this: we already know that immigration at the high-skilled end of the labor market is good for innovation and job creation; we also know that immigration doesn’t displace lower-skilled American workers to any significant extent, and may actually improve wages slightly. In short: don’t blame immigrants for unemployment and other economic problems. If anything, we should be thankful for their contributions to our economic wellbeing!

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