Immigrants Build the U.S. Economy

Just one item today, in preparation for Labor Day--a nice post from Mark Engler's blog over at Dissent:

Undocumented immigrants streaming into this country from south of the border drive down wages and steal jobs that could otherwise go to out-of-work Americans. Right?

Wrong. As it turns out, immigrant workers play an important role in building our economy and bolstering institutions such as social security. In other words, they’re raising your wages and paying for your retirement. So this Labor Day might be a good opportunity to show a little gratitude.

Just in time for the holiday weekend, the Federal Reserve Bank of San Francisco released a research summary entitled, “The Effect of Immigrants on U.S. Employment and Productivity.” Its conclusion was not what most people (or at least most people who attend Glenn Beck rallies) expect.

The author, Giovanni Peri, writes:

Statistical analysis of state-level data shows that immigrants expand the economy’s productive capacity by stimulating investment and promoting specialization. This produces efficiency gains and boosts income per worker. At the same time, evidence is scant that immigrants diminish the employment opportunities of U.S.-born workers.

The paper compares states in the United States with high immigration to those with lower rates of immigration. It then controls for other factors such as spending on research and technology adoption. In the end, the paper concludes, “there is no evidence that immigrants crowd out U.S.-born workers in either the short or long run.”

What’s more, the effect of immigration on wages has been markedly positive—equivalent to a $5,100 annual raise for workers on average between 1990 and 2007 (as measured in constant 2005 dollars).

Read the rest of the post.