Commentary | Immigration

An immigration system where everybody wins

Workers who migrate to the United States are usually pursuing higher-paying work and a better standard of living. But whether their economic successes come at the expense of U.S.-born workers has long been a matter of heated debate, particularly in times of high unemployment.

New research from EPI and elsewhere makes a strong case that immigration brings economic benefits not just for individual immigrant workers and their families, but also for native-born workers. The research is complicated by the fact that the immigrant worker population is so diverse, encompassing everyone from low-skilled with less than a high school education to highly educated technology workers. But collectively it shows that immigration brings benefits for the majority of workers, and these benefits are greatest when the immigrant workers become citizens.

When workers are denied a path to citizenship, they often miss out on higher wages. The trend holds true for both low- and high-skilled workers. In his recent paper Bridge to Immigration or Cheap Temporary Labor? EPI research associate Ron Hira focuses on the H-1B and L-1 visa programs for high-skilled workers, and argues that these visas are often used to recruit cheap temporary labor or to outsource U.S. jobs. His research shows that many companies employ large numbers of H-1B of L-1 visa holders but pay them less than what U.S. citizens earn for comparable work, and never sponsor most of them for citizenship.

Economist Heidi Shierholz’ s new paper, The Effects of Citizenship on Family Income and Poverty, looks at a much broader pool of immigrant workers and also finds that citizenship leads to higher wages, as well as lower levels of poverty, even after accounting for other differences between citizen and non-citizen immigrants, such as age and level of education. Shierholz said the research shows how citizenship can “help millions of people reap the full benefits of their hard work.”

“This also has benefits for the rest of us,” Shierholz adds, “since higher incomes for naturalized immigrants will mean higher tax revenues, helping pay for the services that we all value.”

This matter of how citizenship benefits local economies through higher tax revenues is examined in more detail in The Economic Benefits of Immigrant Authorization, a new study by the Center for the Study of Immigrant Integration at the University of Southern California. The study, which was co-authored by EPI board member Manuel Pastor, looks at the 1.8 million unauthorized Latino workers in California, and shows that those workers who are citizens earn substantially more than those working in the shadows.

Pastor’s paper estimates that granting California’s unauthorized immigrants legal status could bolster Social Security and Medicare taxes by an additional $2.2 billion a year. And, assuming that newly authorized workers would improve their education levels and English skills, the economic benefits would grow over time. The paper estimates that this combination of higher earnings, higher taxes, and higher overall spending would result in a total gain for California of $16 billion a year.

His findings dovetail with Shierholz’s paper, Immigration and Wages. The paper looks at wages and finds that native-born workers in the United States at every educational level experience modest wage increases relative to foreign-born workers in the United States.

“Americans are right to worry about the declining quality of jobs over the last few decades, but immigration has had very little to do with that,” Shierholz maintains. She says immigration could have a much more beneficial impact on the U.S. economy if the current immigration system were given a comprehensive overhaul. In particular, legalization of the large number of undocumented workers, which would give them the chance to unionize, bargain for better wages, or change jobs, would boost wages and labor standards overall.

Past EPI research has shown that the current immigration system in the United States is so seriously flawed that many immigration policies, such as the cap on green cards, have not been adjusted in close to 20 years. In 2009, EPI’s research on immigration established a new framework for immigration reform legislation. The EPI book Immigration for Shared Prosperity, by Ray Marshall, who served as Secretary of Labor in the Carter administration and is now a member of EPI’s board, proposed a five-part framework for reform that would preserve the country’s long tradition of welcoming immigrants, while at the same time protecting the needs of U.S.-born workers. Marshall said that a new commission that would measure labor shortages across different regions and industries would help the country adopt policies that were more in line with labor demands. He also said it was critical to put unauthorized immigrants on a path to citizenship. These ideas have been adopted in legislation introduced in Congress this past December by Rep. Solomon Ortiz, H.R. 4321, the Comprehensive Immigration Reform ASAP Act of 2009.