Are Immigrants Impacting Employment Opportunities for American Workers? Expert Economists Weigh In
The first debate between Vice President Kamala Harris and former President Donald Trump is shown on television at the Juventud 2000 migrant shelter in Tijuana, Mexico, on Sept. 10, 2024. Immigration has been a hot topic throughout the presidential campaign. Carlos Moreno/NurPhoto via Getty Images
The idea that immigration has a negative impact on the U.S. job market is a common theme of former President Donald Trump’s speeches on the presidential campaign trail. “They’re taking your jobs,” the Republican nominee told supporters on Sept. 21 in Wilmington, North Carolina. Immigration is also a top issue for Republican voters: 82% of Trump supporters say immigration is “very important” to their vote in the 2024 presidential election, second only to the economy, according to the Pew Research Center. It’s the lowest-priority issue for Democrats, Pew found. Pew polled 9,720 U.S. adults from Aug. 26 through Sept. 2.
However, evidence suggests immigrants help the overall economy. And, at a high level, they aren’t taking jobs from or reducing the wages of U.S.-born (or so-called native) workers, according to economists who study the impact of immigration on the labor market. “Overall, the consensus is very strong that there are not significant costs to U.S.-born workers from immigration, at least the type of immigration we have historically had in the U.S.,” said Alexander Arnon, director of business tax and economic analysis at the Penn Wharton Budget Model.
Immigrants expected to boost the economy
There are several reasons why immigrants largely benefit the economy and job market, economists said. For one, the job market isn’t static. Immigrants take jobs but they also create new ones by spending in local economies and by starting businesses, economists said. One 2020 research paper from the National Bureau of Economic Research found immigrants are 80% more likely to become entrepreneurs than native workers. A recent “surge” of immigrants to the U.S. is expected to add $8.9 trillion (or 3.2%) to the nation’s GDP over the next decade, according to the Congressional Budget Office, a nonpartisan scorekeeper for Congress. “That’s enormous,” said Michael Clemens, a professor at George Mason University and an economist whose research examines the economic causes and effects of migration. “That creates jobs, that raises pay, that is an increase in the size and complexity of the U.S. economy.”
Immigrants also aren’t perfect substitutes for U.S. citizens in many job positions; in fact, the two groups often complement each other rather than compete, economists said.
However, some economic research suggests immigration can impact the wages of certain subgroups of U.S.-born workers, especially those with lower levels of educational attainment. Overall, the consensus is very strong that there are not significant costs to U.S.-born workers from immigration. Alexander Arnon director of business tax and economic analysis at the Penn Wharton Budget Model Some economists contend an influx of immigrants can reduce wages for such Americans in the short term, though other researchers have found that Americans ultimately benefit, partly because those in direct competition with immigrants are able to find higher-paying jobs. “Not everybody agrees about it,” Clemens said. A big supply of new labor due to immigration can be “difficult and anxiety-inducing” for American workers who must adjust, he added. “But people end up in better circumstances,” he said.
Immigration helped cool ‘overheated’ job market
The El Chaparral pedestrian border crossing at the San Ysidro Port of Entry in Tijuana, Mexico, on Jan. 4, 2024. Carlos Moreno/Bloomberg via Getty Images Immigrants accounted for about 14% of the U.S. population in 2022, according to Pew, citing most recently available federal data. Most are in the U.S. legally: Undocumented immigrants represented 3.3% of the total U.S. population and 23% of immigrants in 2022, Pew said. Their number has increased in recent years, to 11 million, but remains below its 2007 peak of more than 12 million. The number of immigrants coming to the U.S. has “increased sharply in recent years,” the CBO wrote in July.
Net immigration is expected to be 8.7 million people higher from 2021 to 2026 than would have been extrapolated from pre-Covid migration trends, the CBO said. (Its analysis excludes those with green cards.) The influx has been beneficial for the pandemic-era economy, economists said. It “helped cool an overheated labor market” over the past two years, Elior Cohen, an economist at the Federal Reserve Bank of Kansas City, wrote in May.
Demand for workers hit historic highs as the U.S. economy started to reopen in 2021. Wages rose sharply — at their fastest pace in decades — as businesses competed for workers, putting upward pressure on high inflation. Immigrant labor alleviated “severe staffing shortages,” especially in industries like leisure and hospitality, helping dilute those inflationary wage pressures, Cohen wrote.
In this sense, immigrants weren’t competing with U.S. citizens for jobs but instead taking a surplus of available jobs, said Giovanni Peri, an economics professor and director of the Global Migration Center at the University of California, Davis. In fact, a long-term net decline in the number of non-college-educated immigrants to the U.S. from 2010 to 2021 likely contributed to those recent labor shortages, he said. “If there is a time when low-skilled immigration isn’t competing with natives and helping fill shortages, it’s been the last two years,” Peri said.
‘Little evidence’ of employment impact
Even before the Covid-19 pandemic, economists from varying sides of the debate published a “consensus” viewpoint in 2017 on the job market effect of immigration, Clemens said. The panel of economists found “little evidence that immigration significantly affects” overall employment levels among Americans, they wrote for the National Academies of Sciences, Engineering, and Medicine. “I’d say the consensus has gotten [even] stronger” since then, said Arnon of the Penn Wharton Budget Model, who authored a separate 2016 analysis of existing research on immigration’s economic impact. To the extent there’s job competition from new immigrants, it tends to fall mostly on prior immigrants rather than native U.S. workers, according to the National Academies paper. Prior immigrants are most likely to experience “negative wage effects,” it said.
However, native-born high school dropouts may experience that effect, as well, since they “share job qualifications similar to the large share of low-skilled [immigrant] workers,” the National Academies paper said. Immigrants without a high school degree account for the largest share of foreign-born workers, followed by those with graduate or professional degrees, according to the Penn Wharton analysis.
A heated debate on low-skilled workers
A boat arrives in Key West, Florida with Cuban refugees in April 1980 from Mariel Harbor after crossing the Florida Straits. Tim Chapman | Miami Herald | Getty Images One influential — and controversial — paper by Harvard economist George Borjas echoes that finding about high school dropouts. Borjas — who was among the more than three dozen economists who authored the National Academies consensus paper — studied the Mariel boatlift, a mass emigration of 125,000 Cuban refugees to South Florida from April to October 1980. At least 60% of these “Marielitos” were high school dropouts, he said. Borjas found that the large boost in labor supply caused the wages of high school dropouts in Miami to drop “dramatically,” by 10% to 30%.
Stephen Miller, a senior policy adviser during the Trump administration, cited the paper in 2017 as a justification for a new proposal to curtail legal immigration, particularly among lower-skilled workers. Asked to comment on Trump’s campaign statements about immigration and jobs, Anna Kelly, a spokeswoman for the Republican National Committee, said in an emailed statement that the former president “has never wavered in his promise to put America First, including workers born in the USA and incentivizing companies to keep jobs at home.”
Borjas’ finding was in contrast with earlier work by economist and Nobel laureate David Card, who had found the Mariel boatlift didn’t increase unemployment or negatively affect wages of “less-skilled” non-Cuban or Cuban workers. Some economists, including Clemens, dispute Borjas’ findings. Borjas didn’t return a request for comment. “Sudden surges of immigration obviously affect the ability of native workers to find and take jobs on a given afternoon,” Clemens said. But immigrants “also create jobs,” Clemens said. “A large preponderance of evidence is the job creation effect overwhelms the competition effect, even in the short term.”
Effect may depend on the economic environment
Migrant workers pick strawberries during harvest south of San Francisco. Joe Sohm/Visions Of America | Universal Images Group | Getty Images Native U.S. workers and immigrants, even those with similar educational backgrounds, tend to complement each other via their skills, making each other more productive and in essence jointly creating each other’s jobs, Clemens said. For example, in a restaurant, a native worker with better command of spoken English might be a waiter, while an immigrant might do kitchen-prep work or wash dishes, tasks that don’t require such language dexterity. On farms, native workers might be supervisors or run high-tech equipment while immigrants handpick crops, Clemens said. Research by Peri and Alessandro Caiumi of the University of California, Davis, finds that factors like “occupational upgrading” generally lead native workers who initially compete with immigrants for jobs to earn higher wages in the future.
For example, from 2000 to 2019, such factors helped boost wages for less-educated native workers by a “significant” 1.7% to 2.6%, and there was also “no significant wage effect on college-educated natives,” Peri and Caiumi wrote. Similarly, from 2019 to 2022, estimates suggest “small positive effects” on wages. Ultimately, “what might have happened in Florida during the Mariel boatlift in the 1980s may be different than what happens in Arizona in the 2010s,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank. “From a policy perspective, you have to figure out which of the studies are most relevant to the current economic environment you’re considering,” Strain said.
