As immigration legislation slowly makes its way through Congress, the debate about illegal immigrants' role in the economy has intensified. To some people, they represent a black-market work force that is lowering the wages of legal immigrants and native-born Americans. To others, they are an essential part of several big industries. What is the truth?
Getting the whole truth is not easy, because illegal immigrants are not always easy to find, interview or otherwise include in government or private surveys. But some broad facts seem to be emerging, and they may shatter some preconceived notions: Illegal immigrants do not just pick fruit, they do not just work off the books, they rarely earn less than the minimum wage and they may even be raising employment without harming incomes.
For example, there are plenty of illegal immigrants who are not working on farms along the West Coast, gardening or providing child care, according to figures from the Pew Hispanic Center, a research group in Washington. About 20 percent of illegal immigrants work in construction, 17 percent in leisure and hospitality industries, 14 percent in manufacturing and 11 percent in wholesale and retail trade.
In addition, illegal immigrants represent a substantial share of overall employment in quite a few industries, some of which require extensive skills and training. They may make up at least 10 percent of the work force in construction, leisure and hospitality, and in agriculture and related industries, according to figures calculated by the Pew Hispanic Center. But in specific occupations like cooking, painting, washing cars, packaging by hand and installation of carpets and floors, they may make up 20 percent or more.
Those industries badly need immigrant labor, far in excess of government quotas for legal immigrants.
"We need a million-plus workers added to our work force over the next five or six years, and that is associated with people leaving the work force and obviously the forecasted growth in construction," said Wayne Crew, executive director of the Construction Industry Institute, an industry-sponsored research group at the University of Texas at Austin.
"The numbers I've seen also indicate that about 60 percent or so of the new workers coming into the industry are Hispanic or Latino. So you can start to understand if you can expect that 600,000 of the new workers you're going to need are in fact coming from somewhere else, then if they don't come, it puts a bit of a stretch on your labor force," he said.
A shortage of immigrant labor picking fruit on farms in the West has indeed made the news recently, but it disguises a much larger issue. Illegal immigrants also help big agribusinesses to keep prices low by working in processing and packaging, said Katherine Ozer, executive director of the National Family Farm Coalition, a lobbying group in Washington. Though family farms may depend on them to a lesser extent, she said, dairies and other operations do need immigrant labor. Without them, she said, the structure of the industry would have to change.
In many cases, the jobs held by illegal immigrants are far from the minimum-wage stereotype, as well. Though the work itself is often unpleasant, the pay rates are commonly in the range of US$10 to US$20 an hour, said Jeffrey Passel, a senior research associate at the Pew center.
"There are some indications that the majority of these workers, maybe 55 to 65 percent, are not in the underground economy," Passel said. "They're getting paid the same wage rates as everybody else is in those companies. It's written down, and if they work there long enough, they'll get health insurance and everything else."
The obvious question is how these immigrants' presence is affecting the overall labor market, especially in these midlevel occupations.
Using Passel's figures, it seems likely that there are about 8 million illegal immigrants with jobs right now. That is quite a bit more than the roughly 6.5 million unemployed people counted by the Census Bureau (some of whom might actually be illegal immigrants). Even if all illegal immigrants were deported overnight -- the current bill would instead offer them a path to legal status -- the rest of the work force might not be able to fill their jobs.
Indeed, the presence of illegal immigrants may actually be increasing overall employment, and at little cost to wages, suggested Robert LaLonde, a professor of public policy at the University of Chicago. He said that these immigrants increase the overall supply of labor. If demand remains the same, their presence raises the number of jobs in the economy but lowers wages for everyone. But LaLonde said that demand for labor is likely to increase, too, as investment money follows immigrant workers into the country.
"The evidence of the effect they have on labor markets in terms of depressing the wages of native-born Americans is quite unclear," he said. "Capital is a much more mobile factor than labor is, so if labor's moving in, you better believe that capital's not too far behind."
LaLonde added that the presence of illegal immigrants in some service jobs makes it easier for Americans to participate in the labor force. The immigrants act as complements to higher-wage workers, who can then participate in greater numbers and become more productive. For instance, he said, "it's easier for women to work because you can hire more baby-sitters."
Still, if illegal immigrants are often working side by side with native-born Americans and legal immigrants, it is worth asking whether they are reducing opportunities for others. LaLonde dismissed that as unlikely, because in many cases an illegal immigrant may offer a combination of skills and cost that other workers simply cannot match.
Potential US competitors "would like these jobs, but they don't want to work at the lower price," LaLonde said. "Mexican day labor doesn't get paid US$5 an hour; they're getting paid US$8 or US$9 an hour. But if you're going to try to beat them at their own game, given that you're not as qualified as they are, you're going to have to undercut their price."
If illegal immigrants were not present at all, LaLonde conceded, others might have more incentive to train for those occupations. "But overall, the US would be poorer," he said.
That is something for members of Congress to think about as they amend the new bill.
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