This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

New Study: Immigration Redistributes Income From Poor U.S. Workers

Nation's top immigration economist finds tiny overall benefit comes from reducing wages of native-born competitors

WASHINGTON, April 9, 2013 /PRNewswire-USNewswire/ -- A new report by Harvard economist George Borjas and published by the Center for Immigration Studies finds that the flow of one million immigrants into the United States each year does not substantially raise the overall income of native-born Americans.

(Logo: http://photos.prnewswire.com/prnh/20120806/MM52838LOGO)

Borjas, recognized by Business Week and the Wall Street Journal as "America's leading immigration economist", calculates that the wages of native-born workers in competition with immigrants (legal and illegal) are reduced by $402 billion per year.

This reduction in wages is offset by an increase in profits or wages of those who use immigrant labor of $437 billion. The resulting negligible "immigration surplus" represents two tenths of one percent of GDP. It is most often the least-educated and poorest American workers competing with immigrants who suffer the most from immigration.

Illegal immigration, specifically, creates an even smaller benefit to the overall economy – six one-hundredths of one percent – which comes from the same source: lowering the wages of less-educated American workers.

The report, "Immigration and the American Worker: A Review of the Academic Literature", is published by the Center for Immigration Studies and is online at http://cis.org/immigration-and-the-american-worker-review-academic-literature. It does not address the fiscal impact of immigration (taxes paid minus costs created for government), which is a separate question from the labor market effect.

Dr. Steven Camarota, Director of Research of the Center for Immigration Studies, comments, "Professor Borjas's findings on the magnitude of the immigration-driven reduction in wages for less-skilled American workers is disturbing. I hope those formulating immigration policy in Washington will consider the effects on our poorest countrymen of amnesty for illegal immigrants and further increases in legal immigration."

More detail on the report's findings:

  • The presence of immigrants (legal and illegal) in the labor market makes the U.S. economy (GDP) an estimated 11 percent larger ( $1.6 trillion) each year. This "contribution" to the aggregate economy, however, does not measure the net benefit to the native-born population.
  • Of the $1.6 trillion increase in GDP, 97.8 percent goes to the immigrants themselves in the form of wages and benefits; the remainder constitutes the "immigration surplus" – the benefit accruing to the native-born population.
  • The estimate benefit to the native-born from immigration (legal and illegal) is equal to $35 billion a year – or about 0.2 percent of the total GDP in the United States.
  • The immigration surplus is generated by reducing the wages of native-born in competition with immigrants by an estimated $402 billion a year.  However, the profits of business owners and other workers are estimated to increase an estimated $437 billion.
  • For this benefit to exist, some American workers must suffer lower wages.  The best research indicates that workers with less than a high school education lose the most.
  • Those without a high school diploma make up a modest share of the workforce. However, they are among the poorest Americans. Moreover, the children of these workers account for one-fourth of the children of the native-born working poor.
  • Illegal immigration has increased GDP by an estimated $395 to $472 billion a year. As before, this "contribution" to the economy does not measure the net benefit to natives.
  • The immigration surplus or benefit to natives created by illegal immigrants is estimated at around $9 billion a year or 0.06 percent of GDP – six one-hundredths of 1 percent.
  • Although the net benefits to natives from illegal immigrants are small, there is a sizable redistribution effect. Illegal immigration reduces the wage of native workers by an estimated $99 to $118 billion a year, and generates a gain for businesses and other users of illegal immigrant labor of $107 to $128 billion.
  • The above estimates for illegal immigrants are generated by the presence of additional workers in the labor market, not their legal status.
  • Looking at immigration from 1990 to 2010 indicates that the average annual earnings of American workers were reduced by $1,396 in the short run.
  • The same type of education/age comparison used to measure the wage impact shows that a 10 percent increase in the size of a skill group reduced the fraction of native-born blacks in that group holding a job by 5.1 percentage points.

The Center for Immigration Studies is an independent, non-partisan, non-profit research organization. Since its founding in 1985, the Center has pursued a single mission – providing immigration policymakers, the academic community, news media, and concerned citizens with reliable information about the social, economic, environmental, security, and fiscal consequences of legal and illegal immigration into the United States.

CONTACT: Steve Camarota sac@cis.org (202) 466-8185

SOURCE Center for Immigration Studies

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,800.62 -9.44 -0.05%
S&P 500 2,068.24 +4.74 0.23%
NASDAQ 4,748.6820 +35.7120 0.76%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs