Immigration and its (Non-)Effect on Wages, v.2

By April 13, 2006General

A great op-ed in yesterday’s New York Sun entitled, “Immigrants Don’t Depress Wages,” by Diana Furchtgott-Roth, former Chief Economist at the US Department of Labor, so she actually knows what she’s talking about. In it, she poses the question, “So immigrants lower wages, do they?” And then she answers:

“Actually, careful research shows the opposite. Immigration has widespread helpful effects on the economy and may cause wages to rise, because immigrant labor does not substitute for native labor, but complements it.”

Along the way she not only debunks the Harvard study done by Borjas (widely cited by the MSM) but cites in its place some other important and credible work by others. Among these are Professors Gianmarco Ottaviano of the University of Bologna and Giovanni Peri of the University of California, Davis who conclude in their study:

“First, foreign-born residents are relatively abundant in
the educational groups in which natives are scarce. Second, their choice of occupations for given education and experience attainments is quite different from that of natives.”

Next, she cites the work of Senior economist Pia Orrenius of the Federal Reserve Bank of Dallas whose study found:

“The pace of recent U.S. economic growth would have been impossible without immigration. Since 1990, immigrants have contributed to job growth in three main ways: They fill an increasing share of jobs overall, they take jobs in labor-scarce regions, and they fill the types of jobs native workers often shun.”

Finally, she cites David Card of UC Berkeley, whose work was also referenced favorably in the WaPo editorial on this topic. He says simply:

“Overall, evidence that immigrants have harmed the opportunities of less educated natives is scant.”

Her piece is a good one, actually relying on facts to substantiate her conclusion, taking umbrage at our favorite pundit who has thus far been undeterred by the pesky facts:

“Lou Dobbs notwithstanding, American middle-class wages have not been hurt by immigration.”

Join the discussion 3 Comments

  • Dave Meyer says:

    I’ve been tickled by your frequent citation of David Card’s work. Are you aware that he’s also produced some fine work on the minimum wage, finding that it doesn’t have a disemployment effect? I think his research is important on both issues; I suspect NAM would prefer to cherry pick. No?

  • G. Chell says:

    “Believe it or don’t, some things are a bit more important than saving a few cents at the grocery store.”

    Comment: Please tell that to the seniors who are on fixed income. May be you are willing to bail them out!

  • TLB says:

    There’s more on the Ottaviano/Peri study here

    I didn’t read the NYSun article, so I don’t know if it’s as dishonest as the snippets would suggest. The “debate” now centers on illegal immigration, not immigration in general.

    And, most economists who mention illegal immigration seem to forget about the wider context. Such as whether it’s a good idea to allow a mostly hostile country to send us millions of their citizens, especially when they’re resettling lands refered to by that country as their “Lost Territories”.

    Believe it or don’t, some things are a bit more important than saving a few cents at the grocery store.