Competition from the growing number of immigrant laborers in the past 20 years means American workers are earning an average of $1,700 less than they otherwise would be, said an analysis conducted by the Center for Immigration Studies.
The study shows high school dropouts, accounting for about 10 million of the country’s native work force, face the stiffest competition and greatest negative-wage impact, about 7.4 percent less, from immigrant laborers who work the same jobs but for less money.
The wages of blacks and Hispanics are more negatively affected than any other ethnic group because a “much larger share of minorities are in direct competition with immigrants,” according to the findings of Harvard University professor George J. Borjas, who drafted the analysis for the Center for Immigration Studies.
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The economic-impact study examines the effects of increasing numbers of male immigrant workers on male American-born workers based on their level of education and work experience. The study relies on U.S. census data from 1960 to 2000.
Mr. Borjas said the study could not include women because in the 1960s and 1970s more women chose not to work.
Potential wage losses are constant, Mr. Borjas said, regardless of the legal status of the immigrants.
“Statistical analysis shows that when immigration increases the supply of workers in a skill category, the earnings of native-born workers in that same category fall,” the study says.
About 8 million natives with high school diplomas and 12 million with college degrees also are making less money than they would without the increased immigrant labor market.
Mr. Borjas said the one positive effect he found was that educated workers as consumers benefit from the lower wages.
“The wage loss goes to the employers, who then gain a higher profit that then trickles down to consumers in terms of lower prices for products,” he said.
The study was presented by a round table of economic analysts at the National Press Club.
Panelist Jared Bornstein, a researcher with the Economic Policy Institute, said Mr. Borjas’ findings were valid as far as the negative impact on American workers’ wages, but that the numbers in lost wages were too high.
“Many studies show less of an effect than what [Mr. Borjas] does,” Mr. Bornstein said.
He said Mr. Borjas’ study relies too much on the supply side of available workers and doesn’t factor in increasing and decreasing demand.
“The supply trends are clear, but demand [for workers] tends to be more volatile,” Mr. Bornstein said.
“At different points in time the effect of demand can absorb those of supply,” he said.
In 1986, the United States gave amnesty to illegal immigrants, opening a floodgate for employers to legally hire an estimated 2.7 million new workers. The economic effects of that amnesty did not appear until the mid-1990s.
Mr. Bornstein argued that demand for workers exploded from 1995 to 2000 to the highest level in 30 years, “but the market in terms of wages never did any better.”
“Despite negative correlation between wages and immigration, I don’t see a huge problem with what is going on now,” Mr. Bornstein said.
Mr. Borjas disagreed and said moves by politicians to expand immigration could lead to a dramatic wage decrease for American workers.
President Bush in January asked Congress to create a national guest-worker program, which also would increase avenues of legalization. Several bills have been introduced that would increase the immigrant labor market.
“We are talking about a really radical alteration of the native wage labor market,” Mr. Borjas said.
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