CALIFORNIA: Study says immigrants vie with earlier arrivals
Newcomers not taking jobs from U.S.-born workers
Tyche Hendricks, Chronicle Staff Writer
Wednesday, February 28, 2007
Immigrants do not compete with U.S.-born workers for jobs in California, and their presence actually has boosted the wages of all but the least-educated American-born workers, according to a study released Tuesday by the Public Policy Institute of California.
How immigrants affect American-born workers and the domestic economy has been a major element of the debate over immigration reform since Congress began tackling it in 2005.
Some past studies have found that less-educated U.S.-born workers compete with immigrants, and the new study found only an insignificant positive impact from immigration on the earnings of people who didn't finish high school.
But UC Davis economist Giovanni Peri reported Tuesday that immigration increased U.S.-born workers' wages an average of 4 percent between 1990 and 2004 in California, with the greatest benefit -- 6.7 percent -- going to those who attended college for a while.
The people losing out are earlier immigrants, according to Peri, who reviewed 40 years' worth of California wage and employment data. Their wages fell 17 percent because of increased immigration, legal and illegal, according to his research.
Two main factors are at work, Peri said. The state's economic pie has grown -- in some measure due to the immigrants' own role as consumers -- and native and foreign-born workers have generally filled complementary niches in the labor market rather than compete for the same jobs.
"Most of the immigrants -- because of skills that are different from U.S.-born workers -- take different jobs than American workers take," said Peri. "There's not one labor market for everybody, but different markets for different skills and tasks. The overall effect could be more productivity and higher wages."
Peri's findings don't conflict with the stagnation of the lowest-income Americans' wages, said Pia Orrenius, a research economist at the Dallas branch of the Federal Reserve Bank. He's just saying immigrants are not responsible.
"Since the late 1970s, we've seen a large, sustained decline in the real wages of blue-collar men," said Orrenius. "Immigration turns out not to be the main driver. ... The main reason is a shift away from demand for low-skilled workers, relative to high-skilled workers."
With federal immigration reform possibly including a guest worker program, it made sense to focus on California, Peri said, because the state has so many immigrants -- one-third of the workforce -- that their positive or negative effects are more pronounced in the state.
American-born workers with some college education reaped the greatest benefit because they don't compete directly with the majority of immigrant workers, who have much less education, or with immigrant workers who are highly educated, he said.
If a computer engineer immigrates to California and starts a high-tech company here, for example, that company will need accountants, attorneys and other workers familiar with U.S. laws and regulations and able to communicate with American suppliers, said Peri. And those people are most likely to be U.S.-born.
"Complementarity" also seems to play out in the low-skilled agricultural sector, where immigrants with little education and English proficiency tend to go into tasks that emphasize manual skills, while native workers, who possess greater English and communication abilities, move into managerial roles, he said.
Orrenius said the demand for low-skilled workers is increasingly being filled by immigrants -- legal and illegal -- because the supply of U.S.-born workers without a high school education is falling. In California, 8 percent of workers lacked a high school degree in 2004, down from 9.2 percent in 1990, according to the U.S. Census.
She said Peri's assessment of the complementarity between immigrants and natives -- and his allowance for economic growth with the arrival of immigrants -- distinguishes his report from the analysis of Harvard economist George Borjas, who has done the most significant research showing negative effects of immigrants on U.S.-born workers.
Borjas was unavailable for comment Tuesday.
Ira Mehlman, California media director for the Federation for American Immigration Reform, an advocacy group that favors restricting immigration, sees the shift less favorably.
"Employers get the most benefit" from hiring cheaper immigrant workers, said Mehlman. "Most of the rest of the population doesn't really benefit. They may see (lower prices) in certain goods and services, but they end up subsidizing these workers. We're paying for their education and health care."
In addition, the impact of immigrants on wages in California may not be typical, he said. U.S.-born workers who held low-wage jobs have left the state in part because their wages are stagnating, he said.
Peri said he found no correlation between native workers leaving California and the arrival of immigrants, and that a similar national study he conducted last year produced similar results.
Eliseo Medina, vice president of the Service Employees International Union, which represents primarily low-skilled workers, both native and foreign-born, said the degree to which workers are organized is a better predictor than immigrant status of their wages.
"Quite honestly, the economy needs more workers," said Medina, who favors allowing low-skilled immigrant workers to come to the United States legally. "What it doesn't need is more workers without the power to defend themselves."
Peri's finding that foreign-born workers' wages dropped 17 percent as a result of direct competition with newer immigrants suggests there may be more than enough low-skilled immigrant workers competing for jobs, said Frank D. Bean, a UC Irvine sociologist.
"The fact that there are negative effects on immigrant workers implies that there's a little bit of crowding for these crummy jobs," said Bean. "The question is, how big should a guest worker program be and even if you have one, does that stop unauthorized immigration?"
Peri's study, titled "How Immigrants Affect California Employment and Wages," analyzed U.S. Census Bureau data on wages, employment, education level and nativity of workers from 1960 to 2004. He broke down the California workforce by level of education and age, which roughly corresponds to level of experience, and compared native and foreign-born workers in each category.
E-mail Tyche Hendricks at email@example.com.
This article appeared on page B - 12 of the San Francisco Chronicle
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