Immigration helps the U.S. economy, but it’s not as good for individual workers, particularly those at the low end of the wage scale for whom the increased competition for jobs leaves them worse off, the Congressional Budget Office said in a report this week.
The findings both support and challenge conventional wisdom on Capitol Hill, where lawmakers from both parties generally view immigration as a net benefit. The CBO said that’s true for the overall economy, but not for those in low-skilled jobs.
“Among people with less education, a large percentage are foreign born. Consequently, immigration has exerted downward pressure on the wages of relatively low-skilled workers who are already in the country, regardless of their birthplace,” the CBO said.
And there are many new immigrant workers to compete with.
Immigrants account for about half of all newcomers to the workforce each year, the CBO said, which fuels economic growth.
The analysis was done for the House Budget Committee.
It comes at a time when immigration is effectively off the table as an issue for lawmakers, with deep differences between President Trump, who wants to see stricter limits and enforcement, and Democrats, who want to see undocumented immigrants granted citizenship rights and who oppose attempts to limit family-based immigration, which is a key source for low-educated and non-skilled workers.
The CBO said granting legal status to undocumented immigrants would give them a chance to improve their situations.
“They would be better positioned to ask for more compensation and become likelier to be employed in jobs that best matched their skills, increasing their wages and productivity,” the analysts said.
CBO said the economy benefits from higher immigration because the overall labor force is more productive — and immigrants are more innovative than the average native-born American.
Yet the analysts did not put a dollar figure on the benefit to the gross domestic product, nor did they calculate the depression of wages for workers who face more competition.
That disappointed Rosemary Jenks, vice president at NumbersUSA, which advocates for stricter immigration limits.
“They answered the question that we all already know the answer to — whether expanding the labor force expands the GDP. They completely failed to answer the actual important question, which is how immigration impacts per capita GDP,” Ms. Jenks said.
The furthest CBO went was to say that whether the native-born suffer or benefit from immigration depends on who’s coming.
“To the extent that newly arrived workers have abilities similar to those of workers already in the country, immigration would have a negative effect on wages,” the budget scorekeeper said. “To the extent that newly arrived workers have abilities that complement those of workers already in the country, immigration would foster productivity increases, having a positive effect on wages.”
But the analysts said it was tough to figure out the exact effects of immigration amid other factors such as technology.
CBO calculates that foreign-born individuals make up 43% of the U.S. workforce that lacks a high school diploma. They make up a fifth of those with graduate degrees, too.
But they are less represented in the middle, comprising just 16% of those who completed high school or obtained a four-year degree, and just 11% of those who went to college but didn’t get a degree.
Asian immigrants have the lowest unemployment rate, with just 2.6% of those ages 25 to 54 out of work as of 2018. Native-born people had the highest rate at 3.7%, with the rest of the world straddling the gap.