The Danger From Low-Skilled Immigrants: Not Having Them

AUG. 8, 2017. New York Times (slightly edited)

Thousands of Mexican workers cross the border legally each night from Mexico into California, where
they pick up work as agricultural day laborers in California’s Imperial Valley. Let’s just say it plainly:
The United States needs more low-skilled immigrants.
You might consider, for starters, the enormous demand for low-skilled workers, which could well go
unmet as the baby boom generation ages out of the labor force, eroding the labor supply. Eight of the
15 occupations expected to experience the fastest growth between 2014 and 2024 — personal care and
home health aides, food preparation workers, janitors and the like — require no schooling at all.

“Ten years from now, there are going to be lots of older people with relatively few low-skilled workers
to change their bedpans,” said David Card, a professor of economics at the University of California,
Berkeley. “That is going to be a huge problem.”

But the argument for low-skilled immigration is not just about filling an employment hole. The
millions of immigrants of little skill who swept into the work force in the 25 years up to the onset of the
Great Recession — the men washing dishes in the back of the restaurant, the women emptying the trash
bins in office buildings — have largely improved the lives of Americans.

The politics of immigration are driven, to this day, by the proposition that immigrant laborers take the
jobs and depress the wages of Americans competing with them in the work force. It is a mechanical
statement of the law of supply and demand: More workers spilling in over the border will inevitably
reduce the price of work.

But it is largely wrong. It misses many things: that less-skilled immigrants are also consumers of
American-made goods and services; that their cheap labor raises economic output and also reduces
prices. It misses the fact that their children tend to have substantially more skills. In fact, the children of
immigrants contribute more to state fiscal coffers than do other native-born Americans, according to a
report by the National Academies.

What is critical to understand, in light of the current political debate, is that contrary to conventional
wisdom, less-skilled immigration does not just knock less-educated Americans out of their jobs. It
often leads to the creation of new jobs — at better wages — for natives, too. Notably, it can help many
Americans to move up the income ladder. And by stimulating investment and reallocating work, it
increases productivity.

Immigration’s bad reputation is largely due to a subtle yet critical omission: It overlooks the fact that
immigrants and natives are different in consistent ways. This difference shields even some of the least-
skilled American-born workers from foreign competition.

It’s more intuitive than it seems. Even American high school dropouts have a critical advantage over
the millions of immigrants of little skill who trudged over the border from Mexico and points south
from the 1980s through the middle of the last decade: English.

Not speaking English, the newcomers might bump their American peers from manual jobs — say,
washing dishes. But they couldn’t aspire to jobs that require communicating with consumers or
suppliers. Those jobs are still reserved for the American-born. As employers invest more to take

1
advantage of the new source of cheap labor, they will also open new communications-heavy job
opportunities for the natives.

For instance, many servers and hosts in New York restaurants owe their jobs to the lower-paid
immigrants washing the dishes and chopping the onions. There are many more restaurants in New York
than, say, in Oslo because Norway’s high wages make eating out much more expensive for the average
Norwegian.

Where Immigrants Do the Work

Immigrants take up a disproportionate share of many lower-skill occupations — such as farm or
janitorial work — as well as some higher-skill ones, like computer science.
Top 10 occupational groups by immigrant share of workers, 2014
UNAUTHORIZED IMMIGRANTS LEGAL IMMIGRANTS
TOTAL
Farming, fishing and forestry
26
%
20
%
46
%
Building/grounds cleaning and maintenance
16
19
35
Construction and extraction
15
12
27
Computer and mathematical science
5
19
25
Production
9
14
23
Food preparation and related service
10
12
22
Life, physical and social science
4
18
22
Personal care and service
5
16

2
 21
Health care support
4
16
20
Transportation and material moving
6
13
19
Similar dynamics operate in other industries. The strawberry crop on the California coast owes its
existence to cheap immigrant pickers. They are, in a way, sustaining better-paid American workers in
the strawberry patch-to-market chain who would have to find a job somewhere else if the United States
imported the strawberries from Mexico instead.

One study found that when the Bracero Program that allowed farmers to import Mexican workers
ended in 1964, the sudden stop in the supply of cheap foreign labor did nothing to raise the wages of
American farmworkers. From the cotton crop to the beet crop and the tomato crop, farmers brought in
machines rather than pay higher wages.

Another found that manufacturing plants in regions of the United States that received lots of low-skill
immigrants in the 1980s and 1990s were much slower to mechanize than plants in low-immigration
regions.

A critical insight of the new research into the impact of immigration is that employers are not the only
ones to adapt to the arrival of cheap foreign workers by, say, investing in a new restaurant or a new
strawberry-packing plant. American-born workers react, too, moving into occupations that are better
shielded from the newcomers, and even upgrading their own skills.

“The benefits of immigration really come from occupational specialization,” said Ethan Lewis, an
associate professor of economics at Dartmouth College. “Immigrants who are relatively concentrated in
less interactive and more manual jobs free up natives to specialize in what they are relatively good at,
which are communication-intensive jobs.”

Looking at data from 1940 through 2010, Jennifer Hunt, a professor of economics at
Rutgers, concluded that raising the share of less-skilled immigrants in the population by one percentage
point increases the high school completion rate of Americans by 0.8 percentage point, on average, and
even more for minorities.

A janitor cleaning the jury assembly room at the Bronx County Courthouse. Immigrants could help fill
the tremendous demand expected in coming years for low-skilled workers.

Two economists, Giovanni Peri of the University of California, Davis, and Chad Sparber of Colgate
University, compared the labor markets of states that received lots of low-skilled immigrants between
1960 and 2000 and those that received few. In the states that received many such immigrants, less-
educated American-born workers tended to shift out of lower-skilled jobs — like, say, fast-food cooks
— and into work requiring more communications skills, like customer-service representatives.

Interestingly, the most vulnerable groups of American-born workers — men, the young, high school
dropouts and African-Americans — experienced a greater shift than other groups. And the wages of
communications-heavy jobs they moved into increased relative to those requiring only manual labor.
3
It is not crazy for American workers who feel their wages going nowhere, and their job opportunities
stuck, to fear immigration as yet another threat to their livelihoods. And yet for all the alarm about the
prospect of poor, uneducated immigrants flocking across the border, this immigration has been mostly
benign.

Take the Congressional Budget Office’s analysis of the immigration reform bill submitted without
success by a bipartisan group of eight senators in 2013. By 2033, it estimated, the plan would have
increased average wages by 0.5 percent, and do next to nothing to the wages of the least skilled. It
would have made the economy some 5 percent bigger, over the long term, mainly because there would
be 16 million more people.

If there is anything to fear, it is not a horde of less-educated workers ready to jump over the border. The
United States’ main immigration problem, looking into the future, is that too few low-skilled
immigrants may be willing to come.

As the National Academies noted about its report, “The inflow of labor supply has helped the United
States avoid the problems facing other economies that have stagnated as a result of unfavorable
demographics, particularly the effects of an aging work force and reduced consumption by older
residents.” There will be an employment hole to fill.

…….
Foreign Farmworkers in Canada Fear Deportation if They Complain
By DAN LEVINAUG. 13, 2017. New York Times. (slightly edited)

SUMMERLAND, British Columbia — Desperate to provide for his family, Hilario Mendoza leapt at
the chance to leave Mexico to pick cherries on a farm in British Columbia.

But bad weather left him so idle that he often worked just three hours a day — far less than the 40
hours a week he said he had been promised under Canada’s program for temporary farmworkers. While
he waited to go to the fields, he found himself crammed with 34 other laborers into a small house
where rain leaked onto their beds.

Months of complaints went nowhere — and then he was abruptly sent back to Mexico.

“We were abandoned,” Mr. Mendoza said of his 2014 experience on the farm. “There are lots more
people in Mexico wanting to work in Canada, so they don’t protect our rights.”

Canada’s seasonal agriculture worker program was set up to recruit migrants from Mexico and 11
Caribbean nations to work for up to eight months a year to address chronic labor shortages.

But critics say the program is poorly supervised, leaving workers vulnerable to exploitation by
employers, often denied the Canadian labor benefits they are entitled to and at risk of deportation if
they complain about employment conditions.

“This program is a form of apartheid,” said Chris Ramsaroop, an organizer with Justicia for Migrant
Workers, a labor rights organization based in Ontario.

4
 “Migrant workers are employed and live under a different set of legal rights than Canadians,” Mr.
Ramsaroop added. “The very existence of temporary foreign worker programs enables the Canadian
government to deny basic freedoms and protections as a result of their immigration status.”

The farmworker program is part of a broader initiative that also brings in temporary foreign workers for
other industries, like fish processing and home health care. While Canada has decreased the overall
number of temporary foreign workers since 2014, the farmworker program is growing, with visas
approved for more than 34,000 laborers in 2016, up from about 25,000 in 2011, government figures
show.

Josh Bueckert, a spokesman for the federal department that oversees the program, said in an email that
the workers “are protected by all the same rights and protections as Canadians.”

The department provides a telephone tip line and a web page, he said, where cases of potential fraud or
abuse can be anonymously reported, though neither is in Spanish, the only language many of the
farmworkers speak.

Since April 2014, the department has received more than 5,000 tips, and over 640 have resulted in an
inspection or a referral to the authorities, Mr. Bueckert said.

In May, however, a report by Canada’s auditor general found scant federal oversight of the temporary
foreign worker program, with only 13 of 173 planned inspections completed in the 2016 fiscal year.
Temporary foreign workers had not been interviewed during any of the completed inspections,
according to the report.

There are thousands of employers in the temporary foreign worker program, yet just eight employers
are listed as noncompliant, and only one for labor violations.

Advocacy groups point out that the federal government’s oversight authority is limited because
provinces and territories are responsible for enforcing health, labor and workplace safety standards for
the workers, and protections are uneven. Most provinces, however, do not even know the names of the
temporary foreign workers employed there, who they work for or where they are.

This month, the British Columbia government announced plans to collect such data for a registry that
would help protect workers from abusive employers.

Advocates also point to other problems with the system. Consulates of the workers’ home countries are
charged with helping the laborers if they need assistance. Yet officials often side against workers in
disputes to prevent employers from hiring more compliant laborers from other countries, advocates say.

In 2014, the British Columbia Labor Relations Board ruled that the Mexican government
had improperly interfered by blacklisting from the program a Mexican worker who consular officials
suspected was a union sympathizer.

Felix Martinez, a former Mexican consular liaison officer, testified in that case on behalf of the worker.
He said in an interview that the consulate was “terrified” of challenging employers.

Mexican migrant farmworkers at Beverly Greenhouses in the Hamilton region of Southern Ontario,
Canada.

5
“The priority was to keep employers happy so they continue to request Mexicans,” said Mr. Martinez,
who left the consulate in 2011 and now works for the United Food and Commercial Workers Union in
Canada.

The Mexican Consulate in Vancouver did not respond to multiple interview requests.

Mr. Martinez said he had seen foreign workers exposed to toxic pesticides, housed in metal shacks and
forced to use a stream as their only source of drinking water. Most workers, he said, keep silent rather
than risk being sent back to the poverty of their homelands.

“It’s either this or starve,” he said.

Some Mexican workers said that before leaving for Canada each year, Mexican officials warn them not
to make trouble.

“They always say, ‘You’re going to Canada to work, not to cause problems,’” said Erika Zavala, a 32-
year-old single mother, while in her trailer at an organic carrot farm in British Columbia. She has
worked there since 2014.

At the farm, she weeds on her hands and knees for 10 hours a day, earning about $8 an hour. The trailer
she shares with another Mexican woman has no hot water. In past years, she has slept in a decrepit,
mice-infested Airstream with a door that could be locked only from outside.

Though she earns less than she did at previous Canadian farm jobs, Ms. Zavala said she never
complained because she fears being barred from the program.

Erika Zavala, 32, a seasonal worker from Mexico, weeding rows of plants in the organic carrot farm
where she works near Cawston, British Columbia.

For some, however, the program has been a success.

Julio Meneses, 40, has traveled from Mexico to work for the past 16 seasons at Beverly Greenhouses, a
sprawling cucumber farm in Ontario. Now a supervisor earning around $15,000 during his eight-month
stint, he has been able to pay his son’s tuition at two of Mexico’s most prestigious universities.

Once his son finishes school, he said, he’ll stay in Mexico. “For now, I’m building something for the
future,” he said.

Canadian employers cite such economic success stories while dismissing suggestions that the program
exploits workers.

“They’re not going to work for you properly if they’re not happy,” said Phil Tregunno, 62, a fourth-
generation fruit farmer in Niagara-on-the-Lake, Ontario, who has hired 120 foreign workers over the
course of this year.

Ken Forth, the president of Foreign Agricultural Resource Management Services, an organization in
Ontario that assists with requests and transport of workers in the program, said that employers faced
rigorous standards and that workers could receive quality medical care in Ontario and qualify for a
Canadian pension.

6
He disputed claims that workers had been improperly sent home, saying that foreign governments in
the program must approve repatriations.

Armando Farfin, a Mexican migrant farmworker, at Beverly Greenhouses in Southern Ontario.

But Michael Campbell, 54, who was a temporary farmworker in Ontario for nine seasons, had a very
different experience. He was sent home in 2008 when he hurt his back picking peaches.

A father of four, Mr. Campbell said he was left permanently disabled, and filed a claim with the
Ontario Workplace Safety and Insurance Board, the provincial agency responsible for providing
workers’ compensation. In 2011, the board ruled that he was not entitled to further compensation,
claiming he could make up the loss of earnings by working as a cashier in Ontario — even though he
was ineligible for a Canadian work visa.

“It’s farcical,” said Maryth Yachnin, a lawyer at the Industrial Accident Victims Group of Ontario, a
legal clinic in Toronto that is representing Mr. Campbell in the case.

Mr. Campbell has appealed the ruling and was asked to testify before a board tribunal in Ontario in
June. “I want justice,” he said, speaking by phone from his home in St. Elizabeth, Jamaica.

But in May, Canada’s immigration ministry rejected the application for the visa he would need to come
to testify, over concerns he would stay in the country illegally, according to an emailed statement from
the ministry.

Ms. Yachnin said immigration officials took issue with Mr. Campbell’s lack of income, despite the
clinic’s explanation that overstaying the visa would jeopardize the very compensation case he has tried
so hard to win.

Taken together, she said, the government’s actions reflect a deep disregard for the rights of temporary
foreign workers.

“They just don’t see these people as people,” she said.

*************

Walled Off From Reality

Trump’s claims about immigration economics are without merit.
BY JOHN MILLER | NOVEMBER/DECEMBER 2015. DOLLAR AND SENSE

“Mexico’s leaders have been taking advantage of the United States by using illegal immigration to
export the crime and poverty in their own country. The costs for the United States have been
extraordinary: U.S. taxpayers have been asked to pick up hundreds of billions in healthcare costs,
housing costs, education costs, welfare costs, etc. ...

“The influx of foreign workers holds down salaries, keeps unemployment high, and makes it difficult
for poor and working class Americans—including immigrants themselves and their children—to earn a
middle class wage.”

—“Immigration Reform That Will Make America Great Again,” Donald Trump campaign website

7
Donald Trump’s immigration plan has accomplished something many thought was impossible. He has
gotten mainstream and progressive economists to agree about something: his claims about the
economics of immigration have “no basis in social science research,” as economist Benjamin Powell of
Texas Tech’s Free Market Institute put it. That describes most every economic claim Trump’s website
makes about immigration: that it has destroyed the middle class, held down wages, and drained
hundreds of billions from government coffers. Such claims are hardly unique to Trump, among
presidential candidates. Even Bernie Sanders has said that immigration drives down wages (though he
does not support repressive nativist policies like those proposed by Trump and other GOP candidates).
Beyond that, even attempting to implement Trump’s nativist proposals, from building a permanent
border wall to the mass deportation of undocumented immigrants, would cost hundreds of billions of
dollars directly, and forfeit the possibility of adding trillions of dollars to the U.S. and global
economies by liberalizing current immigration policies. That’s not counting the human suffering that
Trump’s proposals would inflict.

No Drag on the Economy

Even the most prominent economist among immigration critics, Harvard’s George Borjas, recognizes
that immigration has had a large positive effect on the U.S. economy. By his calculations, immigrant
workers (documented and undocumented) add $1.6 trillion to the U.S. economy each year, or 11% of
Gross Domestic Product (GDP). The great bulk that additional income (97.8% according to Borjas)
goes to immigrant workers. But that still leaves what he calls an “immigrant surplus” of $35 billion a
year, which goes to non-immigrants, including workers, employers, and other users of services
provided by immigrants.

Others have emphasized the disproportionate impact that immigrants have had on innovation in the
U.S. economy. A study for the Kauffman Foundation found that, in 2006, foreign nationals residing in
the United States were named as inventors or co-inventors in over 25% of all U.S. patent applications.
Around the same time, another study found that immigrants were the founders of over half of all
Silicon Valley startups and almost one-third of Boston startups.

Immigrants Didn’t Do It
U.S. workers have undoubtedly fallen on hard times. The reasons are manifold: slow economic growth;
pro-rich, anti-worker, anti-poor policies; the decline of unions; “free-trade” globalization; and so on.
But immigration isn’t one of those reasons, especially when it comes to “the middle class.” Not only
has immigration benefitted the U.S. economy, but economists find no evidence that immigration causes
a widespread decrease in the wages of U.S.-born workers.

Estimates vary, but the best economic studies point to the same conclusion: over the long run,
immigration has not caused the wages of the average U.S. born worker to fall. Immigration critic
Borjas calculated that, from 1990 to 2010, immigrant labor pushed down the wages of (pre-existing)
U.S. workers by 3.2% in the short run. But even he conceded that over the long run, wages of native-
born and earlier immigrant workers recovered to their previous level. Other economists find
immigration to have a positive long-run effect on wages. Gianmarco Ottaviano and Giovanni Peri
found that, from 1990 to 2006, immigration reduced wages of native-born workers in the short run (one
to two years) by 0.7%, while over the long run (ten years) immigration into the United States boosted
wages 0.6%.

8
Neither Ottaviano and Peri’s nor even Borjas’s estimates of the wage effects of immigration are
consistent with Trump’s claim that immigration is destroying the middle class. But what happens when
we look at the wages of native-born workers by level of education? The Ottaviano-Peri study shows, in
the long run, immigration is associated with an increase in wages across all education levels. Borjas’s
study reports that immigration has negative effects on the wages of native-born college graduates and
especially on workers with less than a high-school education (those at the “bottom” of the labor market,
mostly in low-wage jobs), even in the long run. But again he concedes a positive effect for the 60% of
U.S. workers with either a high school degree or some college (but no degree). These results are
probably a head-scratcher for anyone who has taken introductory economics. After all doesn’t
increasing the supply of labor, through immigration, drive down its price (the going wage)?

Well, no. Immigrant workers do add to the supply of labor. But the economic effects of immigration do
not stop there. Immigrants largely spend their wages within the U.S. economy. Businesses produce
more—and hire more workers—to meet the increased demand. The cost savings from hiring cheaper
immigrant labor also frees up businesses to expand production and hire more workers overall. Both
those effects increase the demand for labor, offsetting the effects of added labor supply.

Economist David Card concludes that, taking into account these demand-side effects, “the overall
impacts on native wages are small—far smaller than the effects of other factors like new technology,
institutional changes, and recessionary macro conditions that have cumulatively led to several decades
of slow wage growth for most U.S. workers.”

Complements or Substitutes?
The effect of immigration on native-born workers with less than a high-school education remains a
matter of dispute. Borjas insists that the costs of immigration are visited disproportionately upon those
with the least education (and, to a lesser extent, those with the most education). He estimates, in a
couple of different studies, that over the long run the wages of native-born high school dropouts fell 3-
5% due to immigration.

But these estimates rely on the assumption that immigrant and native-born workers are substitutes for
each other, and therefore compete for the same jobs. But, in fact, their skills differ in important ways.
The first is their command of English. The Immigrant Policy Institute found that approximately one-
half of the 41 million immigrants ages five and older speak English less than “very well.” In addition,
immigrant workers often have culture-specific skills—from cooking to opera singing to soccer playing,
to cite examples given by Ottaviano and Peri—that differ from those of native-born workers.

When Ottaviano and Peri accounted for the imperfect substitutability between immigrants and natives,
the negative of effect of immigration on native high school dropouts disappeared, and their wages were
shown to rise by 0.3% over the long run.

Giving More Than They Get

Nor is there a credible case that undocumented immigrants are draining the public coffers by
consuming more public services than they pay for. Immigrants migrate to jobs, not to welfare, and are
disproportionately of working age. They are not major beneficiaries of the most generous U.S. welfare-
state programs—Social Security and Medicare, which serve the elderly, not the young or the poor. And

9
undocumented immigrants are already ineligible for most government benefits. (Even documented
immigrants are ineligible for many federal programs, at least for some years after their arrival.)

On top of that, immigrants, both documented and undocumented, do pay taxes. They pay sales taxes,
payroll taxes, and often income taxes. And they pay far more in taxes than they receive in benefits.
That puts Trump’s outrage over $4.2 billion in “free tax credits ... paid to illegal immigrants” in a
different light. In 2009, the federal government did in fact pay $4.2 billion in child tax credits to low-
income tax filers using an Individual Taxpayer Identification Number (ITIN), the vast majority of them
undocumented immigrants. But that same year, those ITIN filers paid an estimated $12 billion into a
Social Security system from which they are not eligible to collect any benefits.

Trillions Left on the Sidewalk

Before the 1882 Chinese Exclusion Act, the United States allowed completely free immigration into
our country. Immigration from elsewhere remained unrestricted until the eve of World War I. And
immigrants flooded into the country and contributed mightily to its economic development.

Liberalizing immigration policies, unlike Trump’s proposed border wall or mass deportations, could
once again benefit the U.S. economy. IEconomists Angel Aguiar and Terrie Walmsley found that
deporting all undocumented Mexican immigrants from the United States would reduce U.S. GDP by
about $150 billion, while granting legal status to unskilled, undocumented Mexican workers (without
additional effective border enforcement) would raise it by nearly that amount. And the potential gain
for the global economy from liberalizing immigration policies is far greater. In fact so large that
economist Michael Clemens likens liberalizing immigration to picking up “trillion- dollar bills on the
sidewalk.”

Such policies would also specifically improve conditions for workers, immigrant and native, in the
United States. Immigrant workers, especially the estimated eleven million undocumented immigrants,
tend to have less bargaining power than native-born workers. A policy granting undocumented
immigrants legal status would make it easier for them to insist on their rights at work, and to organize
and form unions. That’s why the AFL-CIO and unions like UNITE HERE and SEIU now favor it.

For those who remain concerned about the effects of immigration on U.S. born low-wage workers,
there are obvious policies that would improve the lot of all low-wage workers: Boosting the minimum
wage, making it easier for workers to organize unions, and making the welfare state more generous and
inclusive, so people don’t have to accept whatever lousy job they can find. These are the policies that
are called for, not keeping immigrants out.

JOHN MILLER is a professor of economics at Wheaton College and a member of the Dollars &
Sense collective.

10