Myths and Facts About Immigration Economics

By Andrew Simpson 10-18-2010

[Editor's Note: Myths and misinformation abound when it comes to the topic of immigration reform. Sojourners and Church World Service have partnered to present a joint blog series, "Mythbusters." Each day, we'll explore myths and facts about the current immigration system and reflect on how people of faith can respond.]

In this election season, many will exercise their rights of free speech to disseminate information about candidates, campaigns, and causes. When it comes to immigration, however, we're all entitled to our own opinions, but not our own facts.

So what are the facts about immigration? Let's start by dispelling one of the most commonly held misconceptions surrounding immigration.

MYTH: Immigrants take American jobs and drive down wages of American workers.

FACT 1: Immigrants are not taking American jobs but rather increasing employment for native-born American workers.

A recent study by the Pew Hispanic Center, found that between 2000 and 2004 there was a positive increase in immigration and the employment of native-born workers in the states that were the main destinations for immigrants.

What many Americans don't know is there has been a large decline in low-wage, native-born workers in the past decade as many of these native individuals have become better educated and moved into higher-skilled sectors. The influx of immigrant labor is only partially offsetting the current excess demand for low-skilled labor. In other words, immigrants are simply filling a gap in low-skill labor supply caused mostly by the increased education of many U.S.-born workers.

In addition, most immigrants don't compete directly with Americans for jobs, but rather choose different occupations. Instead of acting as substitutes, then, most immigrant labor complements the labor of native-born Americans, which leads to greater productivity in the workforce.

FACT 2: Immigrants increase the average wages of most American workers.

According to a recent 2010 report from the Economic Policy Institute, the effect of immigration from 1994 to 2007 was to increase wages of U.S. native workers by 0.4 percent which amounts to an additional $3.68 per week.

The "immigration surplus" is a term that refers to the increase in the native population's income due to an influx of immigrant labor in that country. A 2007 report by the White House Council of Economic Advisers concluded that the cumulative immigration surplus in the U.S. is approximately $37 billion each year.

The reason for some of this immigrant surplus effect is that the addition of immigrant workers to the labor force stimulates investment by entrepreneurs who are able to employ these immigrants and ipso facto grow their businesses. In this way, an increase in immigrant labor supply also increases wages for higher skilled native-born workers.

FACT 3: Immigrants create jobs when they start new businesses.

Immigrants are almost 30 percent more likely to start new businesses than native-born Americans according to a 2008 study by the Small Business Administration. This type of job creation is invaluable to the American economy and creates countless jobs each year.

According to 2000 U.S. Census data, immigrant business owners contribute $67 billion in U.S. business income every year, a significant GDP boost for the United States.

Yahoo!, eBay, Intel, and Google are all companies founded or co-founded by immigrants to the United States. Immigrant-founded companies such as these employ millions of Americans nationwide every year. In fact, in 2002 alone, Hispanic-owned firms provided 1.5 million jobs and generated a payroll of $36.7 billion.

So, equipped with these facts, how do we proceed? Where do we go from here? I believe we turn back to the gospel for direction. It is our duty as people of "The Way" to boldly stand up to the fear-driven demagoguery that often dominates the immigration conversation. It is our job to respond to those with whom we disagree with grace and understanding. We are called to know the truth and to share this truth with all people.

Immigration reform is too important of a cause to be skewed by half-truths and prejudice. I pray that we, as Christians, will adamantly engage in the pursuit of truth this election season, especially as it pertains to immigration.

Andrew Simpson is a policy and organizing intern at Sojourners.

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