The 1 percent's immigration con: How big business adds to income inequality, pits workers against each other

Doctors, lawyers and Wall Street are doing great. Blue-collar America, less so. That must guide immigration reform

Published March 1, 2015 3:00PM (EST)

     (<a href=''>aastock</a> via <a href=''>Shutterstock</a>)
(aastock via Shutterstock)

With last November’s elections behind him, President Obama has finally begun making good on promises to defer the deportation of most of the 10 to 12 million undocumented immigrants currently living in the United States. Four to 5 million will be eligible for a formal stay of deportation proceedings for three years, along with “green cards” granting permission to work. Meanwhile, a presidential order directing law enforcement officials to focus deportation efforts on those facing serious criminal charges will, in practice, grant most remaining undocumented immigrants freedom to remain as well. Political progressives have generally applauded these moves; if anything, we have criticized them for not going far enough in protecting undocumented workers and their families. (A federal judge has blocked those moves; the administration has since asked for a stay of his order.)

What, though, should progressives think about proposals to increase legal immigration into the U.S.? Contrary to common belief, most immigration into the U.S. is legal immigration, currently at congressionally mandated levels of 1.1 million annually (illegal immigration is harder to track, but in recent years it has probably run between 200,000 and 300,000 people per year). Almost as an afterthought, last month the president also announced that his administration would substantially increase visas for tech workers. The “comprehensive immigration reform” bill passed by the previous, Democratic Senate would have nearly doubled yearly legal immigration levels to approximately 2 million. Such proposals should give serious advocates for American workers pause.

Consider that since 1965, changing policies have increased U.S. immigration numbers from 250,000 to approximately 1.3 million annually (legal and illegal). That is four times higher than any other country on Earth. Crucially, in recent decades immigration has been concentrated among less-skilled, less-educated workers. According to one study, from 1980 to 1995 immigration increased the number of college graduates in the U.S. workforce by 4 percent while increasing the number of workers without a high school diploma by 21 percent.

The upshot has been flooded labor markets for less-skilled workers in the United States, with predictable results. Wages have been driven down. Benefits have been slashed. Employers have been able to break unions, often helped by immigrant replacement workers. Long-term unemployment among poorer Americans has greatly increased. Mass immigration is not the only cause of these trends, but many economists believe it has played an important part in driving them.

Harvard’s George Borjas, a leading authority on the economic impacts of immigration, contends that during the 1970s and 1980s, each immigration-driven 10 percent increase in the number of workers in a particular economic field in the United States decreased wages in that field by an average of 3.5 percent. More recently, studying the impact of immigration on African-Americans, Borjas and colleagues found that a 10 percent immigrant-induced increase in the supply of a particular skill group reduced the wages of black workers in that group by 4 percent, lowered the employment rate of black men by 3.5 percentage points, and increased the incarceration rate of blacks by almost a percentage point.

Crucially, immigration-driven competition has been strongest among poor and working-class Americans, while wealthier, better-educated workers have mostly been spared strong downward pressure on their incomes. According to an analysis by the Center for Immigration Studies, immigrants account for 35 percent of workers in building cleaning and maintenance, but only 10 percent in the corporate and financial sectors; 24 percent of workers in construction, but only 8 percent of teachers and college professors; 23 percent among food preparation workers, but only 7 percent among lawyers. As the following table shows, high percentages of immigrant workers within an economic sector strongly correlates with high levels of unemployment.

Immigrants’ occupational share by economic sector in the United States in 2004

Share of jobs filled by immigrants Native unemployment rate
Farming, fishing & forestry 36% 11.9%
Building cleaning & maintenance 35% 10.9%
Construction & extraction 24% 12.7%
Food preparation 23% 9.3%
Production manufacturing 22% 7.2%
Computer & mathematical 19% 5.0%
Healthcare support 17% 6.6%
Healthcare practitioner 12% 1.5%
Sales 12% 6.1%
Arts, entertainment & media 11% 5.9%
Management 10% 2.6%
Business & financial 10% 3.3%
Education & training 8% 1.3%
Legal occupations 7% 2.7%

Source: Steven Camarota, “A Jobless Recovery? Immigrant Gains and Native Losses.”

No wonder wealthy Americans and a bipartisan political elite that largely serves their interests typically support high levels of immigration. Doctors, lawyers and Wall Street bankers have done pretty well in recent years in America. Truck drivers, construction workers, backhoe operators and meat-packers? Nurses, secretaries, cleaning women and supermarket checkout clerks? Mechanics, roofers, janitors, waiters, day laborers and garbagemen? Not so well.

In recent decades, mass immigration arguably has harmed poorer workers and increased economic inequality in the United States. But this should not surprise us. By importing millions of poor people into the United States and setting them in competition with other poor people for scarce jobs, we drive down wages and increase unemployment among those who can least afford it. Our current era of gross economic inequality, low wages and persistently high unemployment seems like precisely the wrong time to expand immigration.

Arguably, today, progressives concerned about American workers should advocate reductions in legal immigration. After all, immigration can go up as well as down. Just as Congress increased immigration levels in the 1960s, 1980s and 1990s, it could decrease immigration levels today, at a time when tens of millions of Americans are unemployed and the majority suffers from stagnating wages. Perhaps a moratorium on non-essential immigration is in order, until the official unemployment rate declines below 5 percent and stays there for several years in a row, or until real wages for the bottom half of American workers increase by 25 percent or more. Tightening up labor markets worked post-World War II, during the golden age of the American labor movement. It can work again today (just ask the American Medical Association, which lobbies vigorously against accrediting foreign doctors).

One year ago, in a hard-hitting speech at the Center for American Progress, President Obama noted that decades-long trends of “dangerous and growing inequality and lack of upward mobility” have jeopardized the well-being of working-class and middle-class Americans. “I believe this is the defining challenge of our time,” the president said in his remarks: “making sure our economy works for every working American.” Indeed, he pledged to make reducing inequality in the United States his No. 1 priority during the remainder of his second term—a pledge he reiterated again in his State of the Union speech last week.

The president has spoken eloquently about the dangers of growing economic inequality in the United States. Yet to my mind, his words ring somewhat hollow in the face of Democratic support for immigration policies that so obviously benefit the rich at the expense of the poor.

In any case, political progressives need an honest and truly comprehensive debate about immigration policy. We need to consider the trade-offs involved in different policy choices, and ask which ones will best serve the common good over the long-term. As George Borjas says, any immigration policy will have winners and losers. In recent decades, those losers have been American workers.

By Philip Cafaro

Philip Cafaro is Professor of Philosophy at Colorado State University. He is the author of “How Many Is Too Many? The Progressive Argument for Reducing Immigration into the United States,” forthcoming from University of Chicago Press.

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Books Immigration Income Inequality Labor