• U.S.

A Most Debated Issue

5 minute read
Charles P. Alexander

“Cheap immigrant labor displaces American workers and cheats the taxpaying public in a variety of ways.”

— Donald Huddle, professor of economics, Rice University

“Cheap immigrant labor has a posi tive impact on the American economy and actually creates jobs in some minority neighborhoods.”

— Sidney Weintraub, professor of international affairs, University of Texas

Those colliding statements, both from Southwestern scholars in the field of immigration studies, reflect the controversy that surrounds a seemingly straightforward but highly emotional question: Does the inflow of illegal foreign labor help or hurt the U.S. economy?

About the only thing the experts agree on is that illegal immigration is a ^ boon for employers and consumers. Low-cost labor allows businesses to be competitive while earning healthy profits, and some of the benefit is passed along to consumers in the form of lower prices. But illegal immigrants may also compete with unskilled Americans for many jobs. “Some people are hurt by illegal aliens, and some benefit,” says Weintraub.

The immigrant flood has helped hold wages down in a broad range of low-level occupations, from assembling computer circuit boards to sewing clothes. The pay for California’s unionized lemon harvesters, for example, has remained at $6 per hour since the early 1980s because of competition from nonunion crews, which include illegal aliens. Local 531 of hotel workers in Los Angeles was forced to accept a pay cut from $4.20 per hour to $3.60 per hour late last year.

The question of whether illegal immigrants take employment away from Americans or legal aliens is more complex. Many experts argue that workers without documents are concentrated in undesirable jobs that pay the minimum wage of $3.35 per hour, or sometimes less. Says Julian Simon, a professor of business and social science at the University of Maryland: “Illegals take jobs at which natives turn up their noses because they have other options.” Rice’s Huddle contends, however, that many illegal immigrants have enough skills to land jobs that pay more than the minimum wage. In a study of 200 illegal aliens working in construction in the Houston-Galveston area, Huddle found that 53% made more than $5 per hour, and 12% topped $6. About 60% were working in jobs that require at least some skills, including cement laying, carpentry and plumbing. Based on such studies, Huddle, whose methodology is challenged by other academics, estimates that for every 100 illegal immigrants who work in urban areas, at least 65 Americans or legal aliens lose out. David North, an expert on immigration with the New TransCentury Foundation in Washington, agrees. Says he: “Illegal aliens are good for the rich and hard on the poor. They help a narrow and powerful band of interests and hurt a large and silent population.”

Many economists and businessmen dispute that conclusion. Indeed, they argue that the illegals help preserve and even create jobs in the U.S. Especially in industries facing competition from low-cost imports, these experts say, the availability of immigrant labor can make the difference between survival and bankruptcy. It is claimed that the garment industry in Florida thrives largely because of the influx of Hispanics. Says Warren Henderson, an official with the Florida department of commerce: “Without an abundant pool of willing workers at a relatively low cost, many industries will be forced to shut down entirely or move offshore.”

Thomas Muller, an economist with the Washington-based Urban Institute who has studied the impact of immigration in California, estimates that in Los Angeles alone, 52,000 Americans and legal immigrants can thank illegal workers from Mexico for their jobs. The main beneficiaries include salesclerks, teachers and health-care workers. Moreover, according to Muller, the arrival of a large group of new workers at the bottom of the economic ladder has, in the traditional pattern of American immigration, helped others climb to the next rung. Muller found that California’s blacks did not suffer an increase in unemployment because of immigration. One reason: increases in the immigrant population have led to an expansion of government services, which has created new jobs for middle-class blacks.

Among the arguments made by advocates of tougher immigration laws is the contention that the extension of public services to illegal aliens is a drain on American taxpayers. They note that some workers without documents manage to receive government welfare and health-care benefits, and many send their children to public schools. The counterargument is that more than 70% of illegal aliens have Social Security as well as federal and state income taxes withheld from their pay by employers who want to maintain the pretense that they are using legal labor. Since these workers often do not file tax returns, many do not receive the refunds that legal residents would be entitled to.

Studies of the net impact of immigrants on government finance are sketchy and often contradictory. The Urban Institute found that in 1980 California spent an average of $3,254 on each Mexican immigrant household, both legal and illegal, in Los Angeles, but received tax revenues of only $1,515 in return. On the other hand, a 1982-83 study by Weintraub and his associates at the University of Texas indicated that Texas reaps about three times as much revenue from illegal aliens as it spends on them.

The whole debate over illegal immigrant labor is likely to change in the next few years because a low birthrate in the 1960s has caused a slowdown in the growth of the American labor force. Government experts forecast that the increase in job openings will exceed the growth in the number of workers in the next decade. If the projection is accurate, the U.S. will need even more immigrants to keep the economy growing.

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