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Economists Disagree on Immigrant Employment Puzzle

Around Hoopers Island, Md., there is a shortage of labor.

Thirteen years ago, Bryan Hall began hiring migrant workers to pick crab meat from April to December. Now, he relies on 25 to 30 seasonal immigrant workers as the young locals he used to employ moved away.

Then, earlier this year, when the visas for seasonal workers were snatched up before Hall got his employees, he feared his seafood company, G.W. Hall & Sons, would go out of business.

It took an act of Congress, led by Maryland Democratic Sen. Barbara Mikulski, which allowed more seasonal worker visas to bring his employees back, some of whom have returned every year for 10 years.

Hall's situation illustrates one side of the continuing debate about immigrant labor: Are immigrants taking American jobs, or are native workers unwilling to take on the low-paying arduous tasks often performed by immigrants? Even economists disagree on the issue.

One sentiment almost everyone agrees on is the United States needs immigrant labor, but there is no consensus on how much or in what way that affects native workers.

About 40 percent of foreign-born workers are from Mexico and Central America, according to a report by the Congressional Budget Office, and 75 percent of them work jobs requiring little education, including manufacturing and housekeeping. They represent the fastest-growing segment of the U.S. labor force.

It's a fact that more Americans are finishing high school and becoming more qualified for higher-skilled positions, which creates a demand in the low-skilled workforce.

The influx of cheap immigrant labor could also be pushing Americans to finish high school because of the increased competition for low-skilled jobs, according to the CBO report.

Unskilled immigrant workers compete for work with other immigrants and Americans with little education, so the brunt of the impact is felt in the low-wage sector. Economists disagree as to whether an abundance of low-wage immigrant workers drive down wages for Americans in the same skill level.

Studies on the national level show cheap labor slightly depresses wages, but David Card, professor of economics at the University of California, Berkeley, found little if any effect on wages in cities and localized areas. The wages in locations with a high concentration of immigrants grew at the same rate as cities with low rates of immigration.

Additionally, without cheap immigrant labor, certain industries in this country would cease to exist, Card said, such as textile manufacturers and sugar beet farmers, because only the high-end companies could afford American workers.

"The economy is changing all the time," Card said. "There are jobs that don't exist here anymore."

Just as the elevator operator has all but disappeared, so, too, would the hand car-wash without immigrant labor, he said. Many vineyards in California use hand-picked grapes to make wine, but "if there were no Mexicans, that would all be mechanized."

Small town meat-packing plants, once staffed with unionized Americans, have become primarily immigrant workplaces, Card said. The shift probably occurred as Americans finishing high school in small towns where meat-packing is the only option moved to find better jobs in cities. American workers in that position have an advantage over immigrants with little education and no English ability.

The influx of unskilled workers in the United States can also be a good thing for consumers. The CBO report notes that a large number of low-wage workers allows employers to keep production costs down, thus bringing lower prices to consumers.

Immigration proponents cannot argue that a strong supply of cheap labor drives down prices for consumers without hurting the wages of low-skilled workers, said Steven Camarota, director of research for the Center for Immigration Studies. It's contradictory because the only way for savings to be passed on to consumers is if the wages are lowered, he said.

As for the other side of the debate - that immigrants are taking American jobs - it's too simple to say Americans don't want those jobs, said Fred Feinstein, a visiting professor at the University of Maryland School of Public Policy in College Park.

"There is no job that just immigrants will take and Americans won't take," Feinstein said. There are many Americans who work those low-skill jobs, who need those jobs, who work full-time and still live in poverty.

It is not the nature of the work involved in maintenance and meat-packing that turns Americans off, Feinstein said. It is the low pay and lack of benefits that cause Americans to turn elsewhere.

Perhaps immigrants are more willing to take those jobs because they are accustomed to much worse conditions in their native country, he said, or perhaps they're more desperate for work or have fewer options because they are in the United States illegally.

Businesses that cannot afford to pay higher wages cause another problem for taxpayers, Camarota said, because those workers require more social services.

Immigrant workers make up 35 percent of building cleaning and maintenance positions in the country, and 3.1 million non-immigrant Americans work the same jobs, according to the Center for Immigration Studies.

Using the unemployment rate and considering people such as stay-at-home moms and college students who are not looking for work, Camarota said, there are probably about 4 million Americans who could be employed if it weren't for immigrant workers.

It is difficult to determine if unemployment is related to immigrant labor, he said, and some economists say there is no correlation, but he said the millions of unemployed Americans with a high school diploma or less could be working if it weren't for an overabundance of immigrant labor.

"It leaves me scratching my head," Camarota said. "It's just very hard to make the case that there's a huge shortage of labor."

College-educated people in the middle-and upper-income brackets are the ones who say immigrants take jobs Americans don't want, Camarota said.

"What they're really saying is, 'They do jobs I don't want,'" he said.

On the same note, he added, employers who say they can't find Americans who want those jobs are really saying they don't want to offer the pay and treatment Americans expect from a job.

Hall could not pay more and stay in business, he said, because of the intense competition for crab meat from foreign companies.

His workers, 90 percent of whom are immigrants, make about $100 per day picking crab meat, he said.

When he didn't think he would get his seasonal workers this year, Hall tried newspaper ads, job fairs and prisons but found no one who would give up their home to work seasonally in a remote area.

"We can't find nobody that will drive an hour and a half to two hours to go to work every day."

Capital News Service contributed to this report.