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  • July 5, 2011

Do Immigrant Workers Hurt or Strengthen the Economy?

illegal-immigrant-signby Andrés T. Tapia

OK, so there are tons of polarizing debate on documented and undocumented immigrants in the US and whether they have a positive or negative impact on our national economy.

While tempers simmer or boil over around both sides of  the Arizona SB1070  debate and other similar legislation targeted at deporting those who are undocumented, there are some recently released studies that show that immigrants – both legal and illegal – actually strengthen the U.S. economy.

First, a look at the estimated number of undocumented workers. A recent Pew Hispanic Center study says that although 11.9 million unauthorized immigrants were estimated to be living in the United States, the growth of undocumented immigrants had actually stalled after 2006. According to the US Census, by 2008, there were 8.3 million undocumented immigrants in the U.S. workforce. Based on this data, unauthorized immigrants make up 4 percent of the U.S. population and 5.4 percent of the workforce.

At the heart of the immigration debate is the concern that immigrants — undocumented as well as documented — take jobs and benefits from government and community resources meant for U.S. citizens, and further weaken an already ailing economy.

Let’s see what recent studies say.

The Benefits of Immigration to the Economy

A new report by the Federal Reserve Bank of San Francisco, by Giovanni Peri, an associate professor at the University of California, Davis, and a visiting scholar at the Fed, points out the scarcity of evidence that proves immigrants take jobs from native-born workers. And instead of draining our financial system, immigrants may actually help grow our economy, stimulate investment, and encourage productivity-boosting activities like specialization.

In coming to this conclusion, Peri compared productivity per worker and unemployment statistics in states with a steady influx of immigrant workers to those states with few immigrants. States with growing, active immigrant populations actually have greater productivity, pay higher wages, hire more workers, and create more jobs than states with few immigrant workers. Each time a state’s employment increases as little as one percent due to immigration, the result is an increase in per worker income of .4 to .5 percent. In other words, more money in workers’ paychecks.

Immigrants Give More Than They Take

The Pew and Peri’s findings are not isolated results — there’s other evidence to support their claims. Research by Francine Lipman, Professor of Law at the Chapman University School of Law, found that despite widespread belief to the contrary, undocumented workers contribute more to our economy than they cost in social services. Along with boosting the economy through the purchase of consumer goods and by filling essential worker positions, immigrant economic activity ends up creating jobs, increasing productivity, and lowering the costs of goods and services for all of us. Furthermore, their contributions to Social Security, Medicare, and unemployment insurance programs often go unused adding to the pool of money available to legal residents.

As hysteria reigns, some data to consider. I’m just sayin’.


For more stats on immigration, see Diversity Research: Immigrant Workers — Contradictory Trends in a Debate That’s Getting Hotter.

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