- Nov 10, 2003
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Immigrants claim pivotal role in economy
Updated 4/11/2006 2:07 AM ET
By David J. Lynch and Chris Woodyard, USA TODAY
On a typical workday, Jose Castro figures he hefts about 400 boxes full of industrial parts. Each container weighs an average of 75 pounds. Add it up and Castro, a "pack man" earning $8 an hour at an Irvine, Calif., distributor, totes the equivalent of 15 tons every working day.
"All the heavy stuff they don't want to pack, they give to me," he says of his co-workers.
Castro, 24, came to the United States from Mexico six years ago and, like an estimated 500,000 migrants each year, he came without a visa. That puts him at the center of a fierce clash over the nation's estimated 11.6 million undocumented or illegal immigrants.
Monday, hundreds of thousands of immigrants and their supporters filled the streets of dozens of cities, including Atlanta, Washington, New York and Houston, in opposition to a House-passed bill that would make felons of those in the country without proper papers. After sometimes rancorous debate, the Senate on Friday failed to agree on an alternative measure that would have provided most of the nation's undocumented population an eventual path to citizenship.
The largely Hispanic demonstrators say they deserve a shot at the American dream no matter how they came here because of their essential role in keeping the U.S. economy humming. To prove the point, in North Carolina and Dallas, there were calls for Latinos to observe a one-day economic boycott, and the Agriculture Department said cattle slaughter was down 28% from a week ago as immigrant workers spent the day marching rather than working.
For some Americans, however, illegal immigrants loom as a direct threat to their livelihood. Jobless for three months, construction worker Michael Williams, 49, says the immigrant workers he sees gathered outside Los Angeles area Home Depots will work for half his customary $100 daily wage. "You have a lot of illegal aliens here," says Williams. "It takes food off the table."
Measured against the passions it arouses, immigration's economic consequences are surprisingly modest, economists say. Less than 5% of the nation's 148 million workers are illegal immigrants, according to the Pew Hispanic Center. By one estimate, immigrants raise total economic output by $21.5 billion equivalent to less than one day of extra output each year. "We know that the net benefit of immigration is very small," says George Borjas, an economist at Harvard University who specializes in the subject.
Transfer of wealth
Yet, that tiny economywide number masks a major redistribution of wealth. The cross-border movement of generally low-skilled, low-educated immigrants has depressed wages for unskilled native workers while helping keep consumer prices under control and inflating profits for employers.
Borjas estimates that workers lose $278 billion because of immigration, while employers gain $300 billion. "There's a huge redistribution away from workers to people who use immigrants. ... That's what people are arguing about," says Borjas, an immigration specialist.
The immigration controversy revolves around questions of national identity, security in a post-Sept.-11 world and the workings of a $12 trillion economy. Illegal immigrants are essential workers on American farms, in hotels and restaurants and on construction sites. An estimated 7.2 million illegals provide much of the unskilled muscle that the USA's Information Age economy requires: 36% of insulation workers, 29% of farm hands and 27% of butchers.
That's nothing new. Historically, the contributions of the Irish, Germans, Italians, Mexicans and other groups to the American edifice are essential elements of the national belief system. Immigrants labored, often under harsh conditions, in New England paper mills, Midwestern steel plants and along the transcontinental railroads.
Yet, for every person inspired by the Statue of Liberty's welcome for "the huddled masses yearning to breathe free," there were those who saw the newcomers as alien and even threatening. From the nativist Know-Nothing Party of the 1850s to the "No-Irish-Need-Apply" advertisements of the late 19th century, xenophobia marched hand-in-hand with dependence upon the foreign-born.
Experts dispute the cost to government of illegal immigrants. Between 55% and 65% of illegal migrants have income and Social Security taxes withheld from their pay, says Jeffrey Passel of the Pew Hispanic Center. Those who buy or rent homes also pay property taxes. In communities that impose sales taxes, they pay those, too.
However, illegal households also use government services, especially education and health care. The Center for Immigration Studies, which seeks tighter immigration controls, says each illegal household costs the federal government $2,700 annually. But Passel says other estimates show a small net benefit to society.
Impact on lowest rung
Surging immigration inflates unemployment for native workers on the lowest rungs of the economic ladder and appears to be driving some out of the labor force altogether, says Steven Camarota of CIS.
From 2000 to 2005, the percentage of the least-educated workers who left the labor force rose from 40.9% to 43.7%, while the share of foreign-born dropouts barely changed.
"Natives with relatively little education are leaving the labor market in droves," Camarota says. "This should not look like this at this point in an economic recovery."
States where immigrants' share of the labor force jumped the most from 2000 to 2005 have seen some of the sharpest declines in labor force participation by less-educated Americans. In Maryland, the percentage of unskilled Americans working fell from 73.2% to 65.5%, while immigrants as a share of the workforce rose from 12.7% to 22.1%, Camarota says. Similar sharp increases were noted in North Carolina, Tennessee and Georgia.
Do immigrants take jobs from Americans? Wednesday, President Bush urged the Senate to endorse his guest worker proposal, saying: "There are people here working hard for jobs Americans won't do."
But Census Bureau data show that 17 million less-educated Americans work in occupations where immigrants are heavily represented. Example: 1.7 million immigrants and 1.2 million Americans work in building cleaning and maintenance. Replacements for the foreign-born workers could be found among the 362,000 native workers with experience in that field who remain unemployed, Camarota says.
Put another way, there are 2.3 million unemployed Americans who last worked in one of five job categories such as food preparation, farming or construction that currently employ 7.9 million immigrants.
Jose Castro insists he isn't taking anyone's job. Like the majority of migrants, Castro was lured to the USA by the prospect of a better life. He grew up on Mexico's Pacific coast in Los Mochis, a railroad town founded in the 19th century by a fortune seeker from Pennsylvania.
As a boy, he never knew his father, and his mother left the family when he was 5 years old. Along with two brothers, he was raised by other family members. When he finished school at age 17, he headed for the USA.
The lack of proper documentation was no problem. Border guards took one look at the light-skinned 6-footer and waved him through.
Since then, he's married an American citizen, paid his taxes and stayed out of trouble. As the national controversy dominates the airwaves, he remains focused on making enough money for his wife's college studies. They can't afford a child or a car.
Standing on the outskirts of a recent pro-immigrant rally in Costa Mesa, Calif., he says he's seen Americans of all races take jobs alongside him only to leave once they see how backbreaking the work is.
"I've seen them quit after one week," Castro says. "You get sweaty. You get dirty. Your back hurts. ... They just don't want to do it."
Preserving some jobs
Still, finding immigration's economic bottom line is more complex than a static analysis of who's holding what job. In some cases, the choice isn't between native worker and illegal immigrant, but between keeping a job in the USA or seeing it shift overseas.
In North Carolina, where the immigrant share of workers with a high school degree or less doubled in the past five years, surging immigration has depressed wages for low-skilled native workers and cost some their jobs, says John Kasarda, a professor at the University of North Carolina's business school.
The state's traditional manufacturing industries, hard hit by low-cost foreign competition, shed 327,470 workers in the decade ending in 2005, even as the number of Hispanic manufacturing workers grew in that period by 14,786. That means it's likely that a significant number of immigrants replaced native workers in some factories.
Yet, there's a silver lining in the workforce transformation, Kasarda says. The money employers saved by adopting more Hispanic labor allowed at least some factories in embattled industries to keep working. On average, the Hispanic workers earned much lower salaries: $24,391, vs. $39,951 for non-Hispanics.
That preserved jobs for thousands of Americans, both on still-humming assembly lines and in related businesses that benefit from their presence. Overall, the state's fast-rising Hispanic population, almost evenly divided between legal and illegal migrants, funnels about $9 billion in purchases and taxes into North Carolina's economy each year, Kasarda says.
"Few people would argue that Hispanics do not depress wages," he says. "But there is another side to the coin."
Text
Updated 4/11/2006 2:07 AM ET
By David J. Lynch and Chris Woodyard, USA TODAY
On a typical workday, Jose Castro figures he hefts about 400 boxes full of industrial parts. Each container weighs an average of 75 pounds. Add it up and Castro, a "pack man" earning $8 an hour at an Irvine, Calif., distributor, totes the equivalent of 15 tons every working day.
"All the heavy stuff they don't want to pack, they give to me," he says of his co-workers.
Castro, 24, came to the United States from Mexico six years ago and, like an estimated 500,000 migrants each year, he came without a visa. That puts him at the center of a fierce clash over the nation's estimated 11.6 million undocumented or illegal immigrants.
Monday, hundreds of thousands of immigrants and their supporters filled the streets of dozens of cities, including Atlanta, Washington, New York and Houston, in opposition to a House-passed bill that would make felons of those in the country without proper papers. After sometimes rancorous debate, the Senate on Friday failed to agree on an alternative measure that would have provided most of the nation's undocumented population an eventual path to citizenship.
The largely Hispanic demonstrators say they deserve a shot at the American dream no matter how they came here because of their essential role in keeping the U.S. economy humming. To prove the point, in North Carolina and Dallas, there were calls for Latinos to observe a one-day economic boycott, and the Agriculture Department said cattle slaughter was down 28% from a week ago as immigrant workers spent the day marching rather than working.
For some Americans, however, illegal immigrants loom as a direct threat to their livelihood. Jobless for three months, construction worker Michael Williams, 49, says the immigrant workers he sees gathered outside Los Angeles area Home Depots will work for half his customary $100 daily wage. "You have a lot of illegal aliens here," says Williams. "It takes food off the table."
Measured against the passions it arouses, immigration's economic consequences are surprisingly modest, economists say. Less than 5% of the nation's 148 million workers are illegal immigrants, according to the Pew Hispanic Center. By one estimate, immigrants raise total economic output by $21.5 billion equivalent to less than one day of extra output each year. "We know that the net benefit of immigration is very small," says George Borjas, an economist at Harvard University who specializes in the subject.
Transfer of wealth
Yet, that tiny economywide number masks a major redistribution of wealth. The cross-border movement of generally low-skilled, low-educated immigrants has depressed wages for unskilled native workers while helping keep consumer prices under control and inflating profits for employers.
Borjas estimates that workers lose $278 billion because of immigration, while employers gain $300 billion. "There's a huge redistribution away from workers to people who use immigrants. ... That's what people are arguing about," says Borjas, an immigration specialist.
The immigration controversy revolves around questions of national identity, security in a post-Sept.-11 world and the workings of a $12 trillion economy. Illegal immigrants are essential workers on American farms, in hotels and restaurants and on construction sites. An estimated 7.2 million illegals provide much of the unskilled muscle that the USA's Information Age economy requires: 36% of insulation workers, 29% of farm hands and 27% of butchers.
That's nothing new. Historically, the contributions of the Irish, Germans, Italians, Mexicans and other groups to the American edifice are essential elements of the national belief system. Immigrants labored, often under harsh conditions, in New England paper mills, Midwestern steel plants and along the transcontinental railroads.
Yet, for every person inspired by the Statue of Liberty's welcome for "the huddled masses yearning to breathe free," there were those who saw the newcomers as alien and even threatening. From the nativist Know-Nothing Party of the 1850s to the "No-Irish-Need-Apply" advertisements of the late 19th century, xenophobia marched hand-in-hand with dependence upon the foreign-born.
Experts dispute the cost to government of illegal immigrants. Between 55% and 65% of illegal migrants have income and Social Security taxes withheld from their pay, says Jeffrey Passel of the Pew Hispanic Center. Those who buy or rent homes also pay property taxes. In communities that impose sales taxes, they pay those, too.
However, illegal households also use government services, especially education and health care. The Center for Immigration Studies, which seeks tighter immigration controls, says each illegal household costs the federal government $2,700 annually. But Passel says other estimates show a small net benefit to society.
Impact on lowest rung
Surging immigration inflates unemployment for native workers on the lowest rungs of the economic ladder and appears to be driving some out of the labor force altogether, says Steven Camarota of CIS.
From 2000 to 2005, the percentage of the least-educated workers who left the labor force rose from 40.9% to 43.7%, while the share of foreign-born dropouts barely changed.
"Natives with relatively little education are leaving the labor market in droves," Camarota says. "This should not look like this at this point in an economic recovery."
States where immigrants' share of the labor force jumped the most from 2000 to 2005 have seen some of the sharpest declines in labor force participation by less-educated Americans. In Maryland, the percentage of unskilled Americans working fell from 73.2% to 65.5%, while immigrants as a share of the workforce rose from 12.7% to 22.1%, Camarota says. Similar sharp increases were noted in North Carolina, Tennessee and Georgia.
Do immigrants take jobs from Americans? Wednesday, President Bush urged the Senate to endorse his guest worker proposal, saying: "There are people here working hard for jobs Americans won't do."
But Census Bureau data show that 17 million less-educated Americans work in occupations where immigrants are heavily represented. Example: 1.7 million immigrants and 1.2 million Americans work in building cleaning and maintenance. Replacements for the foreign-born workers could be found among the 362,000 native workers with experience in that field who remain unemployed, Camarota says.
Put another way, there are 2.3 million unemployed Americans who last worked in one of five job categories such as food preparation, farming or construction that currently employ 7.9 million immigrants.
Jose Castro insists he isn't taking anyone's job. Like the majority of migrants, Castro was lured to the USA by the prospect of a better life. He grew up on Mexico's Pacific coast in Los Mochis, a railroad town founded in the 19th century by a fortune seeker from Pennsylvania.
As a boy, he never knew his father, and his mother left the family when he was 5 years old. Along with two brothers, he was raised by other family members. When he finished school at age 17, he headed for the USA.
The lack of proper documentation was no problem. Border guards took one look at the light-skinned 6-footer and waved him through.
Since then, he's married an American citizen, paid his taxes and stayed out of trouble. As the national controversy dominates the airwaves, he remains focused on making enough money for his wife's college studies. They can't afford a child or a car.
Standing on the outskirts of a recent pro-immigrant rally in Costa Mesa, Calif., he says he's seen Americans of all races take jobs alongside him only to leave once they see how backbreaking the work is.
"I've seen them quit after one week," Castro says. "You get sweaty. You get dirty. Your back hurts. ... They just don't want to do it."
Preserving some jobs
Still, finding immigration's economic bottom line is more complex than a static analysis of who's holding what job. In some cases, the choice isn't between native worker and illegal immigrant, but between keeping a job in the USA or seeing it shift overseas.
In North Carolina, where the immigrant share of workers with a high school degree or less doubled in the past five years, surging immigration has depressed wages for low-skilled native workers and cost some their jobs, says John Kasarda, a professor at the University of North Carolina's business school.
The state's traditional manufacturing industries, hard hit by low-cost foreign competition, shed 327,470 workers in the decade ending in 2005, even as the number of Hispanic manufacturing workers grew in that period by 14,786. That means it's likely that a significant number of immigrants replaced native workers in some factories.
Yet, there's a silver lining in the workforce transformation, Kasarda says. The money employers saved by adopting more Hispanic labor allowed at least some factories in embattled industries to keep working. On average, the Hispanic workers earned much lower salaries: $24,391, vs. $39,951 for non-Hispanics.
That preserved jobs for thousands of Americans, both on still-humming assembly lines and in related businesses that benefit from their presence. Overall, the state's fast-rising Hispanic population, almost evenly divided between legal and illegal migrants, funnels about $9 billion in purchases and taxes into North Carolina's economy each year, Kasarda says.
"Few people would argue that Hispanics do not depress wages," he says. "But there is another side to the coin."
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