Eric Ruark's picture

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  by  Eric Ruark

Julia Preston wrote an article for The New York Times with the headline “Immigrants Aren’t Taking Americans’ Jobs, New Study Finds.” The study referred to was just put out by the National Academy of Sciences (NAS) entitled The Economic and Fiscal Consequences of Immigration. Note the absence in the title of any mention of “Labor Market,” “Employment,” or “Jobs.” That is because the purpose of the NAS study was to examine the effects of immigration on the size of the U.S. economy, the wages of native workers, and the balance of government budgets. The NAS was not trying to determine if immigrants “take Americans’ jobs.”

The headline of the Times article is a gross mischaracterization, but it adequately conveys the substance of Preston’s reporting, which deliberately misleads her readers. She writes that the NAS researchers asked the question, “Do immigrants take jobs from Americans and lower their wages by working for less,?” and found that the answer was “no.” This sentence is completely false. The NAS did not take up the job displacement issue, and it did, in fact, find a reduction in wages for Americans who compete most directly with immigrants for jobs.

Here is what the report actually said:

…the evidence suggests that groups comparable to the immigrants in terms of their skill may experience a wage reduction as a result of immigration-induced increases in labor supply, although there are still a number of studies that suggest small to zero effects (p. 189).

In its conclusion on wage effects, the NAS recognized there was a divergence of opinion, but it did not find research pointing to "small to zero effects” on wages compelling. Instead, it decided the weight of evidence suggests that when there is a concentration of immigrants in certain occupations, Americans working in those occupations suffer wage losses.

The NAS even calculated the magnitude of those losses, at 5.2 percent, or $493.9 billion annually (See the CIS analysis). It also tallied what it referred to as the “immigration surplus,” which is calculated by subtracting the wage losses suffered by American workers from the gains enjoyed by U.S. employers who hire immigrants ($548.1 billion). This comes out to $54.2 billion, “a 0.31 percent overall increase in income that accrues to the native population” (p. 128).

The “immigration surplus,” which is basically the rise in the Gross Domestic Product caused by adding more immigrants to the population, is very small in relation to the overall size of the U.S. economy ($17.95 trillion GDP in 2015), but the economic gains from immigration are concentrated in hands of those who directly benefit from the influx of lower wage immigrant labor.

In the words of George Borjas, an Harvard economist who was one of the research panel members:

Those who compete with immigrants are effectively sending billions and billions of dollars annually to those who use [the labor of] immigrants.

Preston’s article makes no mention of this vast income redistribution from poorer Americans to wealthier ones.

The NAS went even further in its findings on wage losses:

…native dropouts tend to be more negatively affected by immigration than better-educated natives. Some research also suggests that, among those with low skill levels, the negative effect on native’s wages may be larger for disadvantaged minorities and Hispanic high school dropouts with poor English skills.

Can anyone imagine another area of public policy besides immigration wherein a panel of experts releases a study finding that current practices have disproportionately negative effects on poor and minority Americans, and that not being The New York Times lede?

Tags:  
wages
wage depression

Updated: Wed, Nov 2nd 2016 @ 9:05am EDT

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