Immigration is a major issue in the 2024 U.S. presidential election, especially for supporters of former President Donald Trump, the Republican nominee. Trump has stated in campaign speeches that immigrants are taking jobs from American-born workers. However, labor economists argue that immigration benefits the overall job market and economy, though there is ongoing debate about the impact on wages for workers without high school degrees.
The Broader Economic Impact of Immigration
The idea that immigration harms the U.S. job market is often highlighted in political discussions. However, economists studying the impact of immigration on the labor market disagree. According to Alexander Arnon, Director of Business Tax and Economic Analysis at the Penn Wharton Budget Model, there is strong consensus that immigration has not significantly harmed U.S.-born workers. In fact, immigrants are seen as vital contributors to the economy.
How Immigrants Help Grow the Economy
Immigrants not only take jobs but also create new ones by spending in local economies and starting businesses. A 2020 study by the National Bureau of Economic Research found that immigrants are 80% more likely to become entrepreneurs than native-born workers. The Congressional Budget Office estimates that recent immigration could add $8.9 trillion to the U.S. economy over the next decade, representing a 3.2% increase in GDP.
Additionally, immigrants and U.S. workers often complement rather than compete with each other. Immigrants tend to fill roles in certain sectors like agriculture and hospitality, where labor shortages are prevalent, which helps ease economic pressures like inflation and wage competition.
Potential Wage Impacts on Lower-Skilled Workers
While the overall impact of immigration is largely positive, there are debates about its effect on lower-skilled American workers, particularly those without high school diplomas. Some economists argue that an influx of low-skilled immigrants can lead to wage reductions for U.S.-born workers in the same category, especially in the short term. However, others believe that these workers ultimately benefit as they move into higher-paying jobs.
A famous study by Harvard economist George Borjas examined the Mariel boatlift in the 1980s, which saw a significant influx of Cuban immigrants into Miami. Borjas found that wages for high school dropouts in the area fell by 10% to 30%. However, this conclusion has been debated by other economists, including Nobel laureate David Card, who found no significant negative impact on wages or unemployment for non-Cuban workers in Miami.
Immigrant Labor and the Pandemic-Era Economy
Immigrant labor has played a crucial role in stabilizing the job market during the pandemic. With labor shortages in industries like hospitality and leisure, immigrants helped fill the gaps, allowing businesses to meet growing demand without pushing inflation higher. Economist Giovanni Peri of the University of California, Davis, notes that recent labor shortages have been eased by immigrant workers, especially as fewer low-skilled workers entered the U.S. during the 2010s.
A Complex and Ongoing Debate
The impact of immigration on U.S. jobs and wages is complex and varies depending on economic conditions. While immigrants are crucial for overall economic growth and job creation, there may be localized effects on specific subgroups of workers, particularly those with lower educational attainment. As the 2024 election approaches, immigration will continue to be a focal point of debate, with differing opinions on how to best manage its role in the U.S. economy.
