The Labor Market Impact of Immigration: A Review of Recent Studies


It is often suggested that immigrants "only take jobs natives don't want," implying that the entry of 900,000 legal and 400,000 illegal immigrants each year has no effect on the wages or job prospects of native workers. In fact, a number of recent studies have come to a contrary conclusion. This research indicates that immigration does reduce the labor market prospects of natives, primarily those with few years of schooling. In addition, it contradicts other studies done by Butcher and Card (1990), Altonji and Card (1991), and Borjas (1983, 1984), which concluded that immigration does not have a significant negative impact on natives.

This Backgrounder summarizes these recent studies, some of which have not yet been published. It is not intended as a complete literature review of every study dealing with the labor market implications of immigration, but instead focuses only on recent quantitative studies that have found a negative effect from immigration on the labor market opportunities available to natives. It includes a brief discussion of these issues surrounding immigration's effect on the labor market and several tables on the labor market characteristics of immigrants. The tables contain summary information about the distribution of immigrants across educational categories and earnings deciles as well as other information. Since the impact of immigration is dependent upon the concentration of immigrants in various segments of the work force, these tables provide insight into the likely effects of immigration.


Recent Studies

Research From Policy-oriented
Think Tanks and Other Organizations

Brookings Institution
"How Much Do Immigration and Trade Affect Labor Market Outcomes?"
Brookings Paper #1: 1997
By George Borjas, Richard Freeman, and Lawrence Katz
(Harvard University, 1997)

National Research Council
The New Americans: Economic, Demographic, and Fiscal Effects of Immigration
(National Academy Press, 1997)

The Brookings study findings are based on research using the factor-proportions approach. This method estimates the wage effects of immigration brought about by immigration nationally by measuring the increase in one category of worker relative to others. An increase in the relative supply of one type of worker is assumed to lower wages for those natives in competition with immigrants. The primary advantage of this approach is that it avoids the problems associated with cross-city comparisons (See Discussion.)

The New Americans does not contain original research on the labor effects of immigration. Instead, after reviewing a number of recent studies, the authors accept that the likely wage effects of immigration are in the range determined by the factor-proportions approach used by Borjas, Freeman, and Katz.

The results of Borjas et. al's analysis indicate that the wages of high school dropouts are about 5 percent lower due to immigration. Put another way, immigration explains about 44 percent of the decline in wages for dropouts relative to other workers between 1980 and 1995. These losses should generate economic benefits for owners of capital, consumers, and other workers who can now be paid more. The income of those who benefit from immigration is thought to increase by about two-tenths of one percent. Because this gain is larger in absolute terms than the 5 percent loss suffered by dropouts, some have argued that The New Americans concludes that immigration is beneficial to the economy.

While the argument that immigration creates a net economic benefit is technically correct, it is also misleading. As the above estimates show, because the benefit is spread out over such a large proportion of the population (90 percent) and the loss concentrated on only high school dropouts (10 percent), the harm done to each individual in the second group is much greater than the benefits enjoyed by the rest of the population. This is especially true since those harmed by immigration have such low incomes to begin with. The estimates indicate that the group of workers that roughly corresponds to the poorest 10 percent of the workforce (about 14 million workers) is made roughly $13 billion per year poorer so that the rest of the population can be made two-tenths of one percent richer. Moreover, the size of this net gain is smaller than the estimate of the fiscal burden (tax revenue minus expenditures) from immigrant households contained in The New Americans. Thus, it is not entirely accurate to say that the study concludes that there is a net benefit to natives from immigration.

It is also worth remembering how counterproductive this kind of redistribution can be in pursuing other important social goals. For example, two-thirds of long-term welfare recipients are dropouts — thus, immigration certainly makes it more difficult for this group to find jobs that pay a living wage. In addition, any reduction in wages for dropouts is likely to have a disproportionately large effect on native-born African-Americans because they are 33 percent more likely than whites to lack a high school degree.


Immigration in a Changing Economy: California's Experience
By Kevin F. McCarthy and George Vernez
(RAND, 1997)

This study focused only on California and concluded that, while immigration has created a small net benefit to California overall, this is unlikely to continue without a change in immigration policy. The study concludes that immigration is increasingly out of step with the needs of the economy because too many low-skilled and unskilled immigrants are admitted each year even though the state's economy is creating few if any new jobs that require little education. Such a situation may not only limit employment opportunities for natives, it is also likely to limit the social mobility of immigrants and perhaps their descendants.

The analysis of the employment effects in the RAND study indicates that immigration had a significant negative effect on both high school dropouts and the much larger group of workers who have only a high school degree. Unlike Borjas et. al., the author's findings indicate that the negative effect of immigration primarily takes the form of unemployment and reductions in labor force participation, not wage losses.*

The study report that, in 1990, competition with immigrants for jobs caused between 128,200 and 194,000 workers in California to withdraw from the workforce. Almost all of these individuals were either high school dropouts or had only a high school degree. Additionally, most of these workers were either women or minorities, with African American women being the most adversely affected. The authors acknowledge that this effect probably would be greater if not for the fact that so many low-skilled and unskilled natives left California due to this increased competition.

The study also examined wages and found no negative impact in the 1980s. Only in the 1970s did immigration seem to adversely affect the wages of natives. Moreover, the effect was confined primarily to high school dropouts whose wages would have been 10 to 16 percent higher ($2,250 to 3,800) in 1979 had it not been for immigration. In the 1980s there was no such effect. Again, because immigration leads to outmigration, this is not entirely unexpected when looking at just one state.

*The term "labor force participation" refers to those individuals who are either employed or say they are looking for work. A decline in the labor force participation is seen as problematic since it implies that people have given up looking for a job. It is especially troubling for men because they seldom voluntarily drop out of the labor force during their prime working years in order to raise children.


Center for Immigration Studies
The Wages of Immigration: The Effect on the Low-Skilled Labor Market
(Center for Immigration Studies, 1998)

The Effect of Immigrants on the Earnings of Low-skilled Native Workers: Evidence from the June 1991 Current Population Survey"
Social Science Quarterly
by Steven A. Camarota
(Center for Immigration Studies, 1998)

The Social Science Quarterly article and the "Wages of Immigration" study were based on the same research. The primary difference between the two is that the study contains a more extensive analysis of the likely effect immigration has on different demographic groups. Both sought to determine whether there is a relationship between the concentration of immigrants in an occupation nationally and the wages of natives in that occupation. By treating the entire nation as one labor market and comparing the effects of immigration across occupations, this approach avoids many of the problems associated with cross-city comparison. Additionally, this method measures the effects of immigration directly by comparing the actual wages of natives in occupations with different proportions of immigrants, instead of inferring the effects based on changes in the relative supply of labor, as is the case with the factor-proportions approach used by Borjas et al.

The study focused primarily on workers employed in occupations that generally require only a high school degree or less — about 25 million workers. The results indicate that a 1 percent increase in the immigration composition of an occupation reduces the wages of natives in that occupation by 0.8 percent. Since immigrants account for 15 percent of these occupations, immigration may reduce the wages of the average native in a low-skilled occupation by perhaps 12 percent or $1,915 a year.

Not surprisingly, the study also found that, because native born minorities, especially African Americans, are heavily concentrated in the adversely affected occupations, a much higher percentage of them are negatively affected by immigration. Additionally, the wage loss resulting from immigration is likely to represent a more significant reduction in material prosperity for minorities because their wages are lower than those of white natives.


Articles in Peer-reviewed Journals

Social Science Quarterly
"The Effect of Immigrants on the Earnings of Low-skilled Native Workers: Evidence from the June 1991 Current Population Survey"
by Steven A. Camarota
(1998)

See discussion above.

The Quarterly Review of Economics and Finance
"Trends in U.S. Income Inequality: Evidence from a Panel of States"
by Mark D. Partridge,
St. Cloud University;
by Dick Rickman and William Levernier,
Georgia Southern Univeristy
(1996)

This study did not deal directly with the wage effects of immigration. Instead, the authors focused on the closely related questions of the distribution of income and the rise in icome inequality between 1960 and 1990. They compared differences in the distribution of income across states and found that, even after controlling for a wide variety of factors, the percentage of a state's population made up of recent immigrants is one of the few factors that increases inequality. Factors such as deindustrialization were not found to have a significant effect on the distribution of income.

Immigration can increase income inequality in two ways. First, immigrants are poorer than natives on average. Increasing the size of the poor population increases inequality even if there is no effect on low-income natives. Second, this study also suggests that immigration reduces the wages of lower-skilled natives and increases those of higher-skilled natives — the basic conclusion of the National Academy of Sciences study. Because the inequality measure used by the authors provides information about the entire population, it is not possible to determine which of these two factors accounts for the increase in income inequality associated with immigration. It seems likely, however, that immigration both increases the size of the low-income population and redistributes wages from lower- to higher-skilled natives.


American Economic Review
"Regional Labor Markets and the Determinants of Wage Inequality"
by Robert Topel
University of Chicago
(1994)

In this brief article, well-respected University of Chicago economist Robert Topel examines the effect of immigration on income inequality by comparing differences across regions of the country. Like the much more extensive article summarized above, Topel found that immigration has contributed to the growth in income inequality in the western United States, the area which experienced the most rapid increase in inequality between 1972 and 1990 — the years of his study.

Topel goes further than Partridge and his associates and argues that immigration adversely affects low-skilled natives. He states, "In the west, the data indicate that increased migration of less-skilled Hispanic and Asian workers has adversely affected the wages of natives." (Topel, 17) Thus, Topel suggests that immigration is not just increasing the size of the poor population, but is also reducing wages for less-skilled natives.


Ethnic and Racial Studies
"The Impact of Immigration on Unemployment and Earnings
Among Racial Minorities in the United States"
by Augustine J. Kposowa
University of California at Riverside
(1995)

This study compares earnings and employment for racial minorities across metropolitan areas from 1940 to 1980. The results for the 1980 period seem to be the most revealing: Kposowa found that a 1 percent increase in the immigrant composition of a metropolitan area reduced the wages of minorities by an average of $25.32 a year.

The author concludes, "Non-whites appear to lose jobs to immigrants and their earnings are depressed by immigrants." And, while the author was reluctant to say anthing negative about immigration policy, she did say, "Findings from this sutdy indicate that the effect of immigrants on minorities (non-whites) in the United States cannot be underestimated by policymakers." (Kposowa, 625)


Conference Papers and Forthcoming Publications

U.S. Department of Labor: Bureau of Labor Statistics
"Skill Differences and the Effect of Immigrants on the Wages of Natives: Working Paper 273"
by David A. Jaeger
(1996)

This study used the factor-proportions approach relied on by Borjas et al. and confirmed their findings concerning the wage effects of immigration on high school dropouts. Jaeger found that, in the 50 largest urban areas, immigration was responsible for half the decline in wages for dropouts between 1980 and 1990. He also compared the labor market substitutability of unskilled natives and immigrants and found that the two groups are almost perfect substitutes for each other in the labor market. In other words, they compete directly with one another for the same jobs. This is relevant to the immigration debate because one often-made criticism of the factor proportions approach is that it assumes that immigrants compete directly with natives having the same general skill profile without first showing that this in fact the case.

RAND
The Effect of Immigrants on the Employment and Wages of Native Workers: Evidence from the 1970s and 1980s
(Unpublished Manuscript)
by Robert F. Schoeni
(1997)

This study compared differences in wages, unemployment, and labor force participation across cities nationally. While the stud is subject to the problems associated with cross-city comparisons, the author did employ a number of methods to correct for man of these problems. Unlike much of the previous research that compares differences across cities, the author attempted to control for cost of living differences among cities.

The findings indicate that, in the 1980s, the negative effects of immigration primarily took the form of increased unemployment and reduced labor force participation among low-skilled and unskilled workers. For white-male dropouts, immigration reduced workforce participation and increased unemployment by about one-half of one percent. As is the case with McCarthy and Vernez (1998), only in the 1970s was there a significant negative effect on wages. For African-American men, there was no negative effect on labor force participation, but immigration in the 1980s increased unemployment by 1.18 percentage points for this group. To see why this is significant, consider the following: Unemployment rose from 15.6 percent for African-American dropouts in 1980 to 22.2 percent in 1990, implying that immigration was responsible for about one-fifth of the rise. Like white-male dropouts, there was a large effect on wages in the 1970s but not in the 1980s. For Hispanic-male dropouts, the negative effect was confined mostly to labor force participation, which was about twice as large as the effect on white-male dropouts.

For female dropouts the picture is somewhat different. The negative effects of immigration for both African American and white women took the form of reduced labor force participation in the 1970s and 1980s for both groups and wage losses only for African American women in the 1980s. For Hispanic dropout women, the negative effect took the form of reduced labor force participation in the 1980s, but not in the 1970s, and reduced wages in the 1970s, but not in the 1980s.

Like the RAND study above, this study also found a negative effect on those workers with only a high school degree. With the exception of African-American male high school graduates, however, the size of the negative effect on workforce participation is somewhat smaller than it is for dropouts. Overall, this study concludes that the negative effect from immigrant competition primarily takes the form of increased unemployment or non-work, especially in the 1980s. Since both studies used a similar approach, it is not surprising that a similar conclusion is reached.

Kansas State University
"The Effect of Immigration on Domestic Wages: Evidence from Longitudinal Data"
(Unpublished Manuscript)
by Brent Bratsberg
(1997)

This study used a number of sophisticated methods to compare changes in wages for certain demographic groups across counties (not metropolitan areas) in the United States between 1983 and 1993. Like Schoeni, the author attempted to control for the out-migration of natives in response to immigration.

Overall the found that young, less-skilled African-Americans and Hispanics are harmed by immigrant competition. Increasingly, his results suggest that there is an "optimal" level of immigration. That is, as long as the level of immigration is not too high in a county (around 2 to 3 percent of the total population), immigrants either have no effect on wages or a positive effect. Past this point, however, the wage effects become negative for the groups listed above. The overall effect is found to be similar in size to estimates using the factor-proportions approach.

Russell Sage Foundation
"Unskilled Immigration and Changes in the Wage Distributions of Black, Mexican American, and Non-Hispanic White Male Dropouts"
In Help or Hindrance? The Economic Implications of Immigration for African-Americans
by Cordelia W. Reimers
(1998)

The negative effects found in this study do not appear to be large; however, since it is a cross-city comparison, it seems likely that Reimers understates the effect of immigration. She examined the distribution of income among high school dropouts and found that African-American and white high school dropouts do experience a reduction in wages as the percentage of immigrants increases in a metropolitan area. While it is not clear why, the negative effect is concentrated on higher-paid dropouts — union members or those with seniority.

Russell Sage Foundation
"The Effects of Immigrants on African-American Earnings: A Jobs-Level Analysis of the New York City Labor Market"
by David R. Howell and Elizabeth Mueller
(1998, chapter in an as-yet untitled book forthcoming from the Russell Sage Foundation)

Howell and Mueller treated New York City and some of its inner suburbs as one large labor market. They compared the distribution of immigrants and native-born African-American workers across jobs and industries and found that the two groups are often employed in the same occupations. Thus, at least when occupations are compared, immigrants and African-Americans seem to be in direct competition with each other. Like Jaeger's work, this refutes the often-made argument that "immigrants only take jobs natives don't want."

Many of the jobs that have a high representation of African-Americans and immigrants are lower-skilled, such as taxi driver, child care worker, and cook. Comparisons of these occupations between 1980 and 1990 reveal that, as whites left these jobs, they were replaced by immigrants while the African-American percentage held relatively constant. This trend helps to explain why it is often so difficult to measure the effect of immigration on the labor market prospects of natives: The exit of whites from these jobs would probably have happened even without immigration. Immigrants simply replaced departing whites and the jobs continued to pay relatively low wages. Thus, wage comparisons over time in these occupations may show little impact from immigration. It seems very likely, however, that had fewer immigrants been available to fill the jobs vacated by whites, wages would almost certainly have increased in these occupations.

After comparing the concentration of immigrants and African-Americans across occupations, the authors attempted to measure the wage impact of immigrant competition on native-born African-Americans. By studying 1980 and 1990 separately, they found that in both 1980 and 1990 a 1 percent increase in the immigrant composition of an occupation lowered the average earnings of native born African-American men in that occupation by roughly 5 percent. The separate 1980 and 1990 results for native-born African-American women are contradictory and not very strong.

The authors also compared changes in average earnings for African-American men and women in these same occupations between the 1980 and 1990 Censuses. They found that if the percentage of immigrants in an occupation increased by one percentage point over the 1980s, the average earnings of African-American men and women in the same occupation fell by 1.5 percent — a very large effect. Overall, the findings of this study suggest that the wage effects of immigration on native-born African-American men in New York City are substantial.


Discussion

Can immigration's effects be determined by comparing differences across cities?

Measuring the impact of immigration on the labor market is a difficult proposition. Not only are the data incomplete, determining what wages would have been without the influence of immigration is by its nature counter-factual. Since immigration did, in fact, occur it also is not easy to estimate what wages would have been with less immigration. Moreover, the effect of immigration is likely to vary considerably for different demographic groups such as minorities and less-skilled workers. Thus, while the effect on all workers may be small, the effect on particular sub-groups may be substantial.

In the past, most economists compared cities with differing percentages of immigrants and generally found little effect from immigration. This approach has a number of methodological shortcomings that are now widely recognized, however. The main problem with this method is that it treats each city as a discrete labor market so that comparisons can be made. The interconnected nature of the nation's economy, however, makes comparisons of this kind very difficult.

Research by University of Michigan demographer William Frey and others indicates that native-born workers, especially those with few years of schooling, tend to migrate out of areas as immigrants arrive. This movement of natives in response to immigrant competition spreads the labor market effects of immigration from high-immigrant areas to the rest of the country.

In addition to internal migration, the huge volume of goods and services exchanged among cities creates pressure toward an equalization in the price of labor. For example, newly arrived immigrants who take manufacturing jobs in a high-immigrant city like Los Angeles come into direct and immediate competition with natives doing the same work in a low-immigrant city like Pittsburgh. The movement of capital seeking to take advantage of any immigrant-induced change in the local price of labor should also play a role in preserving wage equilibrium among cities. In addition, immigrants themselves tend to migrate to cities with higher wages.

In short, the mobility of labor, goods, and capital — as well as choices made by immigrants — diffuses the effect of immigration and makes it very difficult to determine the impact of immigration by comparing cities. This is why Camarota (1997, 1998), Jaeger (1996), and Borjas et al. (1997), all treat the entire country as one large labor market. Bratsberg (1997) and McCarthy and Vernez (1997) also attempt to deal with this question by at least controlling for the outmigration of natives in response to immigration.

Can the minimum wage solve the problem?

Since these new studies indicate that the negative impact from immigration falls on those employed at the bottom of the labor market, an increase in the minimum wage may be helpful in ameliorating the harmful wage effects of immigration, but would not deal with the job displacement caused by immigration. Moreover, raising the minimum wage and allowing in large numbers of unskilled immigrants may exacerbate unemployment among low- and unskilled workers.

Economic research indicates that the minimum wage has two primary effects: First, if the minimum wage is set above the price of labor as determined by the market, those who already have jobs will see their wages rise. Second, by increasing the cost of labor the minimum wage can cause unemployment by increasing the incentive to lay off workers and by making employers less willing to hire new people. The size of the dis-employment effect, however, is a matter of significant debate in the economic literature.

With regard to immigration, it seems clear that increasing the minimum wage while at the same time allowing in large numbers of less-skilled immigrants can only aggravate any existing dis-employment effect. In contrast, cutting low- and unskilled immigration increases wages without any likely downside for unskilled workers because the increase is the result of a reduction in the supply of labor. While wage increases would normally increase unemployment, in this case wages are rising in response to a reduction in the supply of labor, not because the government has mandated an increase. Therefore, even if higher wages make employers hire fewer workers, this is off-set by a reduction in the number of workers seeking employment.

It is also possible that the minimum wage only restores wages to where they would have been without the influence of immigration. Thus, to get the maximum benefit from an increase in the minimum wage, it would be highly desirable to cut low- and unskilled immigration while increasing the minimum wage at the same time. The resulting gains to the working poor are then more likely to amount to a significant improvement in their living standards.

Is the Earned Income Tax Credit the answer?

There is little doubt that the Credit is helpful to low-income workers. However, in addition to the high cost to taxpayers, the Credit may also hold down wages because it acts as a subsidy to low-wage employers. Employers have less incentive to increase wages because workers are now being paid in part by the federal government. Cutting low- and unskilled immigration, on the other hand, has no downside for low-skilled workers in the United States. Moreover, the credit only increases earnings for those with jobs, it does not directly address the increased unemployment among the less-skilled that comes with immigration. It is also worth remembering that dispersion of funds under the Earned Income Tax Credit is automatic. Since the above research indicates that immigration lowers wages for precisely those who already have low incomes, it seems very likely that immigration increases the costs of the credit.

Are illegal immigrants the only problem?

Based on the March 1996 Current Population Survey (CPS), 39 percent of recent immigrants in the labor market lacked a high school degree. While there is some undercount, especially among the illegal population, the CPS does provide a reasonable estimate of all foreign-born persons in the workforce, legal and illegal. A recent survey of newly entering adult legal immigrants, funded by the National Institutes of Health, found that 34 percent of entering adult immigrants in 1996 lacked a high school diploma. Therefore, the large proportion of low-education immigrants found in the CPS cannot be attributed to illegal immigration alone. And, it is this high concentration at the bottom that creates the problem.

Do immigrants only take jobs natives don't want?

Part of the reason this argument makes sense to many middle class Americans is that they mistakenly assume, based on their own preferences, that natives are uninterested in low-wage jobs. However, as indicated above, Jaeger's work indicates that unskilled immigrants and unskilled natives compete directly with one another for the same jobs while Howell and Mueller found that, in New York City, native-born African-Americans and immigrants also tend to hold the same jobs. In addition, Hamermesh (1997) found that comparisons of such things as time of day worked, injuries on the job, and other work place amenities show that unskilled natives and immigrants tend to hold the same kinds of jobs. In fact, he found that after controlling for individual attributes, African-Americans actually receive a worse package of work place amenities than immigrants. This implies that immigrants actually hold better jobs than African-Americans.

It is also worth mentioning that wage reductions resulting from immigration cannot help but make a job less attractive to natives. What's more, increases in the number of workers vying for each job are likely to reduce benefits and worsen working conditions because employers know they can easily replace workers who find conditions unacceptable. For example, research on the meat packing industry indicates that, as the number of immigrants has increased, so has the speed of the processing line and injuries among workers (Stull and Broadway, 1990; and Broadway, 1994). Thus, if employers do have trouble finding natives to do some jobs, the presence of immigrants help explain why.

Do immigrant-induced wage reductions for low and unskilled workers result in lower consumer prices?

The wage losses suffered by natives due to immigrant competition do not vanish into thin air. Lower wages for apparel workers, for instance, should translate into lower prices for clothing. However, any effect on consumer prices is likely to be very small. The working poor simply account for too small a portion of total economic output to have a large impact on prices. For example, the bottom 10 percent of the labor market accounts for less than 4 percent of total economic output. So even if wage losses are substantial for this group, the effect on prices will be imperceptible. Moreover, in response to wage increases, employers typically invest in new technologies and methods to increase the productivity of their workers. Therefore, higher wages often do not necessarily translate into higher consumer prices because gains in productivity offset higher prices.

Even in agriculture, the area with the highest concentration of immigrants, estimates by Huffman and McCunn (1996) indicate that a dramatic reduction in the supply of immigrant agricultural labor would have a very small effect on the price of produce. They estimated that consumer prices for produce would rise by only 2 or 3 percent if illegal farm labor was not available. The effect is so small partly because labor costs account for only a small portion of the total costs of produce and because increased mechanization and imports would hold down prices.

What effect do low-skilled immigrants have on taxpayers?

It is important to remember that there is near consensus that immigrants with few years of schooling impose a significant burden on taxpayers. For example, The New Americans found that, on average, an immigrant without a high school degree will use $89,000 more in public services than he pays in taxes during his life. For those with only a high school degree the figure is $31,000.

In contrast, higher-skilled immigrants tend to have a positive fiscal impact. Therefore, low-skilled immigrants not only make the poor poorer, they also impose significant costs on all taxpayers. This fiscal burden is large enough to offset lower consumer prices or improved returns on investments that may come with lower wages for less-skilled workers.


Conclusion

Social science by its very nature is imprecise. Thus, it would be a mistake to say that we are absolutely certain that immigration reduces the labor market opportunities for low- and unskilled natives. In addition to basic economic theory, however, there is now a good deal of research to indicate that immigration is adversely affecting the wage and employment structure at the bottom of the labor market. Of course, the negative effects of immigration should not be overstated. Based on available research, it seems clear that most American workers are not adversely affected by immigrant competition.

Knowing that less-skilled natives are made poorer by immigration does not tell us what, if anything, we should do about it. The extent to which we take action to deal with the wage effects of immigration depends on how concerned we are about the labor market opportunities available to less-skilled workers. In recent years a number of scholars have argued that the inability of workers with few years of schooling to earn a living wage has contributed significantly to such social problems such as welfare dependency, family breakup, and crime. One need not accept all such arguments to acknowledge that a reduction in wages or job prospects for the poorest Americans is cause for real concern. Thus, if we are worried about the distribution of income and the plight of the working poor, current policy is clearly counterproductive.

Finally, it is worth pointing out that no matter how things are measured, the wages and employment rates of those with few years of schooling have either declined or stagnated in the last few decades. Almost all economists agree that this is very strong prima facia evidence that this kind of labor is not in short supply. Moreover, the number of jobs available for workers with only a high school degree or less has declined significantly in the last 20 years. Therefore, it is very hard to justify allowing in large numbers of low- and unskilled immigrants on the grounds that their labor is desperately needed.


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