Immigrants create tons of jobs for local workers
Scott Walker did it. Rick Santorum did it. President Barack Obama did it.
While they may approach it differently, they all make similar arguments: Immigrant workers, specifically undocumented workers, drive down wages by creating a glut in the labor supply.
But according to a recent study, these claims are far from true.
Economics professor John McLaren, of the University of Virginia, and Gihoon Hong, of the University of Indiana at South Bend, found that an influx of immigrant workers created jobs and wages did not go down.
In summarizing their findings, McLaren and Hong present a stark repudiation of the argument that immigrants have a negative economic effect (emphasis added):
The debate has drawn attention because of the sheer increase in the number of immigrants living in the US.
According to the Pew Research Center, data shows that in 2011 there were 40.4 million immigrants living in the US, 11.1 million of whom were undocumented. This is up from 31.1 and 8.4 million, respectively, in 2000.
The report says (emphasis ours): "We find that 1,000 new immigrants to a US Metropolitan Area generate approximately 1,200 new local jobs, about 62% of which are in the non-traded sector." Additionally, most of these new jobs go to native workers.
The jobs do come, however, in particular industries. McLaren and Hoong differentiate between "tradeable" and "nontradeable" industries - basically goods-created and services. They found that most of the new jobs created come in the service industries. Additionally, wages increase in the services industries, while they do fall in the goods-creating jobs.
In total, however, the immigrant effect, called the "shot in the arm effect," can raise wages. "Depending on how strong the shot-in-the-arm effect is, it may raise real wages in terms of the overall consumer price index, raising utility for all local workers," said the report.
This increase in jobs and wages will then attract other native workers, increasing the benefits:
This study is one of a wave of studies done in recent years that seem to show little or net positive effects of immigration. Giovanni Peri at the University of California-Davis found little effect of immigrants on workers wages. William Olney at Williams College found that immigrants have a positive effect on US businesses. This applies around the globe, from Denmark to Israel.
Immigration, as Jeb Bush reminded everyone Monday, is going to continue to be a focus, but perhaps all the candidates should take a closer look at the numbers before pronouncing its economic effect.