How much are illegal immigrants paid on average compared to native-born Americans? As you can imagine, this is not an easy question to answer. It's not as if the BLS has a handy hourly wage time series for undocumented workers. They're undocumented!
The best answer I could find comes from a paper written in 2018. After you cut through the math and convert from log points, they conclude that when you compare workers with similar education, illegal immigrants make about 22% less than native workers. This is largely due to lack of bargaining power; English fluency; and limited job opportunities (i.e., the need to stay away from occupations that carry a risk of being discovered).
Note, however, that this an average for all illegal immigrants, most of whom have been in the country for many years. It's very likely that recent immigrants make less, which suggests that the typical recent border crosser probably makes about 30% less than a similarly educated native born.
What does this mean for the theory that illegal immigrants are stealing jobs away from native-born workers? On the one hand, they're taking very poorly paid jobs that probably don't attract natives in the first place. On the other hand, 30% is a big incentive for employers to choose an illegal immigrant over a native. It's hard to draw a conclusion from this.
So that leaves us to rely on other measures, most of which point to little effect from illegal immigration. The participation rate of the native-born population remains above its pre-pandemic trend:
The unemployment rate of native-borns is 4.0% and the wages of the poorest tenth have continued to rise in real terms. Taken together, all of this suggests that the recent surge of illegal immigration has had very little impact on the jobs of native borns. Probably none at all.
Obviously you do not understand. They are lazy moochers AND they steal our jobs. It is written!
Talk about lies, damn lies, and charts… From 2009 to 2019, that chart clearly was not linear, yet Kevin has chosen a linear trend line…
I believe trend lines are computed using a mathematical equation. Do we think Kevin uses one for his graphs?
I think he chose a linear one, because that supported his stance.
Looking at the data on the graph, a linear trendline seems reasonable. Are you saying a logarithmic trendline is more accurate?
If a logarithmic line turned out to be a better fit, an eyeball examination would suggest we're near a minimum. The deviation above the linear trend in the last few years would indicate a flattening of the slope, yeah?
👍🏻👍🏻
I think what the chart shows is that NB labor participation rates are sort of anemically climbing back up to where they were ca. 2015-16, but they have a ways to go to reach their pre-pandemic levels. The bigger question is whether this has anything to do with immigration, legal or illegal, at all. First, you had a lot of people who could afford it take early retirement in 2020 -- people in their 50s or 60s who took a look at remote work and then their retirement accounts and said "fuck it. YOLO!" Second, if we recall, a ton of people died of Covid. Granted a lot of them were seniors in nursing homes and others who probably hadn't been in the labor force for a while, but hundreds of thousands were also regular workers, a lot of them in blue collar jobs like restaurant servers and cooks. Have they all been replaced by immigrants? Not if you talk to business owners, who claim they can never find anyone for their open positions, even with higher wages.
So I think the takeaway is that Covid really did deal a blow to labor participation among native-born workers, but that immigration -- legal or illegal -- has apparently not filled the gap. You'd think all those employers in CA complaining about how high wages are and how they still can't find qualified workers would be demanding massive immigration reform, but no, they're apparently just whining about taxes and voting for Trump. Lotta thinkin' there, Vern.
You can always draw a line, but whether the trend is actually linear or not is a matter of judgement. Actually Kevin often splits up trends and he could have done so in this case. What if a line is drawn from about 2014 to 2020 as well as another after 2020?
Anyway the statement that "The participation rate of the native-born population remains above its pre-pandemic trend" is very dubious and of questionable meaning anyway. Kevin often goes overboard with questionable trend lines.
So, I've been trying to find Kevin's source data. Thus far I've come across: https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm which happens to go back to 2004, and https://fred.stlouisfed.org/series/LNU01373414 which goes back to 2007. Apart from the interesting shape of the line prior to circa 2009, they also show the "pandemic dip" as taking place, as one might expect, early in 2020.
So? Well, take another gander at Kevin's chart. Instead of circa March 2020 the pandemic dip appears circa July 2019.
Perhaps he started at: https://www.bls.gov/webapps/legacy/cpsatab7.htm
Taking that, and starting where Kevin started, I've created a spreadsheet: https://docs.google.com/spreadsheets/d/1hIuOQsbkbprnHyZN0iACrdAC-0wrxed1NhpHABwWsKQ/edit?usp=sharing which has a chart showing a couple different choices for trend line, along with starting and ending point and their R^2 fit values. Which is "correct" for the data Anyone's guess, but they all were created using a mathematical equation...
I can only offer an observation: that the local laborers doing building repairs to keep them up to code in NYC are doing very dangerous work on scaffolds. Can't help but admire them, they're skilled and are almost certainly severely underpaid, and almost certainly illegals.
I have no hate for illegals. We're profiting off of them, and in return they get to stay in the US.
The argument that immigrants take jobs has never made a lick of sense, because they spend their earnings just like anyone else, creating a job for each they take.
Population growth has no effect on jobs per capita, regardless of whether the growth occurs by border crossing or vagina crossing.
Immigrants spend their wages but they make less than non-immigrants, thus the demand per capita is less. Many also send money back to their native countries. Overall GDP is increased but GDP per capita is reduced and so is productivity. If employers can get workers for less, they see less need to invest and increase automation. This may increase the number of jobs, but they are low productivity jobs, and overall standard of living is reduced. How could standard of living not be decreased if there is an influx of people who are glad to accept lower wages and lower standards?
How this affects non-immigrant workers is a more complex question, but there is absolutely no question that immigration a) keeps overall wages down and b) keeps inequality high. Are these things that people who call themselves liberals should be advocating?
It is highly inaccurate that "there is absolutely no question that immigration a) keeps overall wages down and b) keeps inequality high."
It is also a very deceptive way to frame a complicated issue.
But perhaps the point was only to jab a pointy stick at liberals.
"Are these things that people who call themselves liberals should be advocating?"
Absolutely. First of all, not all policy should be driven by trying to keep some measure like per capita wages higher. Second, it's hard to imagine the US having a higher standard of living without the generations of immigrants who built this country and its economy. Without immigration, we'd all be poorer (not to mention, living elsewhere).
People don't come here for economic reasons alone, but people that do come typically enjoy a substantial increase in their own standard of living. When people are better able to migrate to better economic regions of the world, more people are able to escape poverty and live more fulfilling lives. That helps grow the global economy and lower global inequality. I don't know why people who call themselves liberals would be against that.
TLDR: "Now stop whining and eat your broccoli".
While not a gambling woman, I'd lay odds that most liberals are for exactly that, but not in their neighborhoods. Opposition to additional housing as a quality of life issue (I got mine, go somewhere else) stretches across party lines. Nobody wants to live near downmarket neighborhoods where crime is higher and properties/cars aren't maintained, doesn't matter how you self identify politically.
America holds a promise in the imagination that anyone with ambition can come here and increase their standard of living. The key there is ambition and socially America is at a place where too many of us think that ambition doesn't matter, they believe that everything is a birthright. The truth is that ambition never doesn't matter, even the children of the rich eventually lose the family fortune without ambition. The desire for a high standard of living isn't going to get you far without the ambition to work for it and figure out how money is made in this country.
I'm not a gambling woman either, yet I'd bet that most people who work hard to build a better life yearn for the day they can say, "We made it!" Sometimes that happens fast, sometimes it take generations. Then they forget where they came from.
It's my observation that there is no class of people who feel more entitled than the affluent.
Yep. But I'd like to put it down to no longer having stuff around to remind them of where they came from.
"While not a gambling woman, I'd lay odds that most liberals are for exactly that, but not in their neighborhoods."
Gods yes!!! This THIS THIS!!!
And there is a very simple reason for this: Most of those 'liberals' aren't really liberals. They're striking a pose. Remember about five years back when owning a Tesla was cool?
That almost sounds like arguing for driving towards the global mean.
Why the heck would you think that?
The point is, I thought, very clear. Not everything the government does is to achieve an economic goal, and especially not one as narrow as keeping per capita wages higher at all costs. I don't know anyone (sane) who claims that's the point of government policy. Among other things, it would lead to absurdities. The US could sell Mississippi to Haiti, which would raise the per capita wages of both countries, but even if you like the idea (it has some worthy aspects, no doubt), most people would recognize that there are other and more important considerations.
I don't concede that immigrants lower our standard of living on average, or specifically per capita wages in the long run. (I believe the opposite.) But immigration policy -- like government policy for healthcare, education, defense and any number of other areas -- is not all about economics. Even economic policy is about more than dollars and cents.
“ but there is absolutely no question that immigration a) keeps overall wages down”
This was the problem faced by Cesar Chavez in his attempts to organize a farm labor movement. Illegal immigrants were willing to work for less and that undermined his attempts to unionize farm labor.
If you adjust for demographics, age, we are at near record levels of LFPR.
https://twitter.com/ernietedeschi/status/1776232811076170154
Steve
Good addition, thanks.
Kevins chart isnt very informative as it ignores these important variables.
"On the one hand, they're taking very poorly paid jobs that probably don't attract natives in the first place. On the other hand, 30% is a big incentive for employers to choose an illegal immigrant over a native."
If one could, by some dark magic make all of the immigrant 30% discount workers disappear, the job market would become incredibly tight,, labor would be more expensive, and prices would rise. And then the GOP would whine (even more) about inflation.
Guess what? Anything that raises wages is likely to increase prices. If the minimum wage is raised (to a meaningful level) that causes prices to go up. This seems to be happening where the minimum has actually gone up. Does this mean that wages must always be kept as low as possible - for example that unions must be outlawed and there should be no minimum wage?
It is really amazing how self-described liberals can adopt conservative economic talking points for partisan purposes - in this case opposing Trump's racist xenophobia.
I think you could make an argument that there must be balance. Price depends on cost of goods sold, of which wages are a part, and value to the buyer. For wages to remain modest, there must be housing and basic services for the workers that they can afford. Businesses that can't find workers won't be in business for long and plenty are temped to circumvent rules in order to get workers.
The lack of balance is throwing everything out of kilter, corporations and businesses have lost their sense of responsibility and community as they only look at this quarter's numbers and short term gain. Without workers who can afford to live and thrive here in the US, they outsource and hollow out the economic base on which they rest. It can't be all profit all the time, that doesn't work in the same way that socialism fails over time.
Anything that raises wages raises standards of living. Increasing wages also tend to put upward pressure on prices, but price increases consequent on wage increases are generally a tiny fraction of the wage increases they follow (for instance, a 10% wage increase might lead to a 1% increase in prices). Wages should, in general, track worker productivity; produce more, get paid more.
Looking at wages paid, not total costs presuming the immigrants are actually paid.
Medical coverage, payroll taxes, etc., come in to play. Immigrants may also be in "company" housing, or are paid thru an employment agency, so they get less take home pay.
Not to mention that undocumented workers often use fake SS numbers so their wages are taxed for FICA but they will never take benefits. Undocumented workers are subsidizing SS for the native-born.
It is funny when the "poisoning our blood" crowd pretends to care about jobs and wages.
This is a pretty funny and amazing story about immigrants.
https://www.cbsnews.com/sanfrancisco/news/burglary-tourists-visa-waivers-target-us-luxury-homes/
Prosecutors say the break-in is part of a larger issue in which so-called "burglary tourists" enter the United States from countries that qualify for visa waivers, allowing a visit of up to 90 days without a traditional tourist visa. When the suspects arrive -- most often from South America, prosecutors say -- they join sophisticated burglary rings that prey on luxury homes.
In what sense are tourists "immigrants?" When I vacation in Canada, am I an immigrant?
Know what's funny and amazing? You don't know the difference between tourism and immigration, and yet you make a fool of yourself with this post.
Well heck. They don’t need a visa. They don’t have to apply for asylum. They have a “job” as burglars. They can stay as long as they want. Immigrants. 😘
Please point out where in the link it says they can and do stay as long as they want. Take all the time you need.
The "burglary tourist" story is tabloid fodder designed to push a political angle (anti-immigrant bias) into news coverage. Let's get the masses riled up about those brown-skinned gangs from south of the border! Why is Joe Biden letting those people into the country? They stole $8 million in jewelry from the Starr family. Imagine what they would do to you.
A few things to keep in mind. This "crime wave" is happening during a time when burglaries are actually going down (this was true for LA, which had stories about the burglaries a month ago). Nobody has stats on these "tourist" burglaries. It's all anecdotal, so be a little skeptical of sensationalist news coverage. The immigration waiver applies to one country, Chile. It's easy to get people worried about brown people, but we shouldn't generalize. The people committing the burglaries are not "tourists." They're criminals. We have police and other agencies that will track them down and prosecute the crimes. This is a crime story about foreign nationals, not an indictment about immigrants in general, who on average are more law-abiding than native-born Americans.
The so called tourist burglaries seem to be the crime du jour, kind of like those flash mob smash and grab robberies. Gets people riled up and leaves an impression of rising crime.
That being said, I have to believe the burglars have inside information, likely from people employed by the victims who might be illegals. Just a guess, no actual evidence, but that would be the avenue I’d be looking at if I was investigating the crimes).
You may be right about that. That's why we never let the help know where we hide my wife's $8 million collection of jewelry.
I guess I have nothing to worry about then.
"...On the one hand, they're taking very poorly paid jobs that probably don't attract natives in the first place. .."
The jobs are poorly paid because the supply of immigrant labor has decreased wages.
I once dreamt of harvesting tomatoes in the 100 degree Florida heat for $50/hr, but when I got there, all the jobs had been taken by immigrants who were barely paid minimum wage and had to sleep in dilapidated, un-airconditioned trailers. Thanks a lot, Biden.
"...Probably none at all."
None at all? Really? So you think the normal market rules in which increased supply causes lower prices for some reason don't apply to labor markets at all? Suppose we suddenly started producing millions of cheap robots that could do some unskilled labor. You really think that would have no effect on wages?
So you think the normal market rules in which increased supply causes lower prices for some reason don't apply to labor markets at all?
The labor market is very different from that for goods and services because A) more labor increases production (which tends to increase real wages) and B) imported labor increases national demand for goods and services, which in turn increases the demand for workers (and so puts upward pressure on wages).
Do you really think Americans would be enjoying higher wages now if, say, in 1890, we had imposed draconian immigration restrictions and, as a result, now had a population of only 190 million (instead of the current 335 million)? That seems vanishingly unlikely: our GDP would be a lot smaller, too!
(We'd also benefit less from labor force segmentation/specialization.)
I wish people would drop their lump of labor fantasies once and for all. It's enormously misguided. Think of immigration as simply a process of increasing population and production. A cursory glance at an atlas reveals there's very little correlation between this dynamic and economic well-being: there are large countries that are poor and others that are rich. Just like there are small countries that are poor, and others that are rich.
"... : our GDP would be a lot smaller, too!"
I care more about GDP per capita. I think we would be better off on average with less immigration.
We may soon have a way to test your thesis. Trump's plan is to deport the 10 million or more undocumented immigrants living here today. Without migrant labor, what do you expect will happen with, say, food prices?
I imagine the folks who are screaming about inflation today will take skyrocketing prices in stride. "All is good. I always cared more about GDP per capita anyway."
"...Trump's plan ..."
Trump doesn't really do much planning.
"I imagine the folks who are screaming about inflation today will take skyrocketing prices in stride. "All is good. I always cared more about GDP per capita anyway."
I was speaking for myself. Lack of cheap labor would have little effect on most prices. And some of you guys were claiming consumption by immigrants increases demand for labor balancing the increased supply of labor. Which if true (which it isn't) would mean deporting immigrants won't cause a labor shortage because of a balancing decreased demand for labor.
Deporting 10 million workers over a short time span will create economic disruption. The deportated workers won’t be holding a a cross section of jobs; the deportations will be concentrated in industries with large numbers of undocumented workers, creating shortages of workers in those industries.
We might imagine a reduction in economic output creating a corresponding surplus of workers in other industries, meaning that the number of workers will still match the number of jobs. Some workers in working in industries that have few undocumented workers switch to industries which previously hired lots of undocumented workers, and the economy will be fine.
Except, the actual labor market doesn’t work like that. Workers who are trained to work in one industry may not be qualified to work in another. Furthermore, jobs held by undocumented immigrants tend to be low paying jobs. In real life, workers do not cheerfully switch from a higher paying job to a lower paying job. So reduced demand doesn’t prevent labor shortages. It means you get labor shortages in some industries and high unemployment in others.
"... Furthermore, jobs held by undocumented immigrants tend to be low paying jobs. .."
They are low paying because of the availability of illegal immigrants to fill them.
@Jasper_in_Boston
+1
Never heard of adhesive contracts, eh? Your entire argument vanishes in a poof of logic. But by all means, please proceed.
"Never heard of adhesive contracts, eh?..."
What do adhesive contracts have to do with anything? Are you claiming that they prevent price competition?
So tell me, in your own words what contracts of adhesion are, what generally in court when those contracts are challenged.
Why you're at it, you can explain -- in detail -- why large power imbalances between employer and employ or vice versa.
Finally, you can yet again explain how this applies to the labor market.
Because I strongly suspect that you have no idea what those words or conceps mean.
TL;DR: Why do you think anyone would give a fuck about what you had to say?
"...Why do you think anyone would give a fuck about what you had to say?"
Why respond if you don't care?
Adhesive contracts are written by one party on a take it or leave it basis. They don't have much to do with labor markets as employment relations are generally determined by state (or federal) law.
On the other hand, 30% is a big incentive for employers to choose an illegal immigrant over a native.
I'm not so sure it's typically "big" — I'd bet that incentive is moderate, at best, in the vast majority of cases, once productivity differential and legal exposure are taken into account.
But sure, if you're moving across town and you don't want to pay for a legitimate moving company, you probably can save a bundle by going down to Home Depot and paying a guy from Honduras to help you.
Of course, if you call the legitimate moving company you might still get that guy from Honduras moving your furniture.
At this point the importation of masses of immigrants who accept low wages is not a matter of reducing wages at the lower end, it is a matter of keeping them down.
In the US there has always been an underclass of people, mostly non-white, who were required to do arduous agricultural and other work for no or little pay. Until 1865 this was largely slaves, who provided the labor in the cotton and tobacco industries, among others. After "emancipation" black people continued to provide a lot of farm labor, including migrant labor. Their wages were kept down through de-facto white supremacy. During WW II, when there was a genuine labor shortage which drew even blacks into manufacturing and the military, the farm labor was provided through the "bracero" program which brought in temporary workers mostly from Mexico. After the program was ended in 1965 farm labor continued to be provided by legal and illegal temporary and permanent immigration from Latin American countries, and so it continues today.
Those who say things like immigrants are "taking very poorly paid jobs that probably don't attract natives in the first place" are tacitly approving this situation. Of course reason the jobs don't attract natives is that they are poorly paid and the reason that they are poorly paid is largely a matter of racism. "The first place" was actually slavery.
As Kevin has pointed out before, in the past immigration seems to have responded to demand for labor. When there is more demand for workers, employers hire immigrants to avoid raising wages. It's probably too early to see the effects of the recent surge, but if there really was a labor shortage as the media have been proclaiming, then more hiring of immigrants may be the response. The supposed labor shortage did not cause a major increase in real wages - immigration is probably one reason why it did not.
Taken together, all of this suggests that the recent surge of illegal immigration has had very little impact on the jobs of native borns. Probably none at all.
Indeed. With still so many job openings out there, what we're talking about with a four percent unemployment rate outside of the criminally unemployable is the hardcore lazy, junkies, hustlers, anyone who can make do without a paying job. Immigration has nothing to do with it.
. Of course reason the jobs don't attract natives is that they are poorly paid and the reason that they are poorly paid is largely a matter of racism
If consumer's get freaked out by even modestly rising food prices, how do you think they'll react to those same prices if farm workers are paid $15 per hour? Hmm?
People want cheap food. Period. You can import said food but the farm workers overseas are paid even less than in the U.S. You can't escape it. Farmers can only raise wages so much before their products become uncompetitive and unbuyable.
I used to believe in the whole "poor wages/no-native (white) workers concept until I realized some people aren't going to pick berries off trees no matter how many dollars per hour they make and producers simply aren't going to offer said wages in fear of consumer revolt. So there you go.
"On the other hand, 30% is a big incentive for employers to choose an illegal immigrant over a native.
On paper yes but employers can comfort themselves with the fact that they rarely, if ever, confront a native willing to work said jobs for even above that 30 percent.
I assume that Labor Force Participation Rate includes only people not in school and not retired, otherwise there are other factors going on.
This doesn't take into account the background of wages rising much more slowly for low end workers when compared with the rising GDP. It is quite possible that without illegal immigration, low end workers could have done much better. The effect of low cost undocumented labor on unionization has been well documented. The meat packing business had long been unionized and paid half decent wages until the unions were broken by hiring low cost immigrants. It's been similar for restaurant work where undocumented workers have kept wages down and unions out. You can probably find this across the low end board, and the reshuffling and rising wages as a result of the COVID crisis provide further evidence. There's a reason employers don't want to have to verify that their workers are legally in the country. They've been fighting it for decades.
"There's a reason employers don't want to have to verify that their workers are legally in the country."
Exactly. A serious approach to ending undocumented labor would have these features:
1. Fines and prison time for anyone who hires an undocumented worker;
2. Fines for anyone who purchases goods or services that were generated using undocumented workers.
Under #2, that would involve anyone who purchased produce or meat at a grocery store that used undocumented labor, anyone who stayed at a hotel or resort that used undocumented labor, anyone who played at a golf course that used undocumented labor. Currently, that would cover most of us, but if you knew you could be fined, wouldn't you insist that the vendor use eVerify before you patronized them?
Really Kevin, this is not good data to use for investigating this question. I'm not sure what data you might use.....one could go and talk to any contractor who competes with another company that uses illegal immigrants. That might give some perspective....
OT: Are we slipping into a Russian-style strongman autocracy supported by the wealth of the 2% class?
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