When unveiling his guest worker proposal, President Bush urged Americans to "legalize the process of people doing jobs Americans won't do." Illegal immigrants, in this view, are essential to the country's economic growth.
As I have shown before, nothing could be further from the truth.
There are at least 7 million illegal aliens working in the U.S.—about 4.5% of the civilian labor force. Certain occupations have abnormally high concentrations of illegals: [Unauthorized Migrants: Numbers and Characteristics, Pew Hispanic Center, By Jeffrey S. Passel, June 14, 2005]
Yet illegals make up only 13% of hotel industry workers, 11% of restaurant and food service workers, and 10% of construction workers. Clearly millions of Americans are doing precisely the same jobs, and countless others were working in these fields before being displaced by foreign-born workers.
Admittedly, these are blue collar jobs requiring little in the way of education or special skills. Yet literally millions of unlettered, unemployed natives are available to fill those slots. In 2004: (Table 1):
American workers in building cleaning and maintenance have an 11% unemployment rate. Similarly, 13% of native construction workers and 9% of native workers in food preparation are unemployed. [Illegals hurt Americans, By John Hostettler and Lamar Smith, Washington Times, December 2, 2005]
Illegal aliens work for less, are less likely to have medical insurance, and are often paid "off the books." They are a boon for all manner of employers, ranging from the neighborhood tree service to Wal-Mart.
I examined the relationship between foreign worker penetration (i.e., the percent of workers that are foreign-born) and wages in particular industries. The industry with the largest foreign-born share (38.3%) in 2004 was "Other services, private households"—a category that includes cleaning girls, nannies, gardeners, etc., while the smallest penetration (2.8%) was in "Agricultural, self-employed"—farmers who own their land. These figures reflect legal and illegal immigrant workers in each industry.
I was able to find average wages for 17 of these industries at the BLS website. (Table 2.) The following "scatter diagram" shows, for those 17 industries, the percent change in foreign penetration on the y (vertical) axis and the percent change in real wages on the X (horizontal) axis:
As you can see, the trend line has a downward slope, indicating that industries with above average increases in foreign penetration had below average increases in real wages.
In a word: the data confirm the notion that increased foreign worker penetration brings lower wage and income gains.
There is no dearth of American workers—just wages and working conditions that sink lower with each immigrant wave.
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.
