This Labor Day Weekend, Remember How Immigration Depresses Workers’ Wages
Millions of Americans have little reason to celebrate this labor day weekend. Years after the economy supposedly recovered from the recession that began in 2007, we have yet to see the robust job creation that typically follows a recession.
The employment situation continues to be particularly grim for low-skilled workers, teenagers and African-Americans. The July 2015 unemployment rate for African-American men was 8.7 percent, and the labor force participation rate was only 67.4 percent. The unemployment rate for workers with less than a high school diploma was 8.2 percent, and their labor force participation rate was a mere 45.3 percent. The unemployment rate for 16-19 year olds is 14.4 percent, and they have a labor force participation rate of 44.1 percent.
Meanwhile, in the middle of an increasingly bitter public debate about illegal immigration, President Obama continues to refuse to enforce the immigration laws. The dim employment outlook for African-Americans, young people, and low-skilled workers may seem to be unconnected to illegal immigration, but the two issues are related. In 2008, the U.S. Commission on Civil Rights held a briefing on the effect of illegal immigration on black unemployment. The briefing witnesses, well-regarded scholars from across the ideological spectrum, were unanimous: illegal immigration has a quantifiable negative effect on both the employment opportunities and wages of African-Americans. Similarly, over the past few years several economists have posited that high levels of low-skilled immigration – and illegal immigrants are predominantly low-skilled – contribute to low levels of teenage employment.
The reason illegal immigration has a disproportionate effect on the employment of African-American men, low-skilled workers, and young people is that all three groups are competing for the same jobs. Both illegal immigrants and African-American men are disproportionately likely to be poorly educated and therefore be in the low-skilled labor market. A 2012 Census Bureau report found that 50.9 percent of native-born blacks and 75.5 percent of foreign-born Hispanics had not continued their education beyond high school. Although the report did not disaggregate foreign-born Hispanics who are legal immigrants from those who are illegal immigrants, Professor Vernon Briggs estimated that illegal immigrants or former illegal immigrants who received amnesty constitute a third to over a half of the total foreign-born population.
This means that illegal immigrants and African-Americans compete against each other for the same jobs. Professor Gordon Hanson testified that between 1980 and 2000, low-skilled immigration (which is heavily comprised of illegal immigrants) “reduced the employment rate of low-skill black men by about 8 percentage points,” which “accounts for about 40 percent of the 18 percentage point decline in black employment rates” since 1960.
Similarly, teenagers are almost by definition less likely to have a high school diploma, and other young people without high school diplomas are considered low-skilled. In 2012, economist Christopher Smith estimated that “the fraction of teens employed in the previous week would have been about 6.5 (males) and 7.1 (females) percentage points higher in 2005 had immigration remained at its 1990 levels.” In 2014, a group of economists (of which Smith was one) cited Smith’s earlier work in their own discussion of declining youth labor force participation rates, noting that competition from low-skilled adult immigrants may contribute to the “crowding out” of 16-24 year old workers in lower-skilled fields. The economists stated that the declining labor force participation rate among 16-24 year olds is probably not entirely due to young people spending more time in school, as labor force participation has also declined among those who are not enrolled in school.
This bodes ill for the future of these young workers, particularly those who do not go on to college. Smith found that “a 10% reduction in average annual hours worked for 16 and 17 year olds is associated with a change in annual earnings ten years later of between -2.9% and 1% for males and -2.4% and 0.7% for females.” This makes sense – if someone does not go on to college, it is even more important that they get on the employment ladder at an early age.
The data are clear. Employment prospects for young people, low-skilled workers, and African-Americans continue to be dismal. When the unemployment rate in a population is over 8 percent, as it is for all three groups, you don’t have a shortage of labor – you have a surplus. It is clear that illegal immigration, and low-skilled immigration generally, has a devastating effect on the jobs and wages of low-skilled Americans, particularly low-skilled African-Americans and young Americans. Yet Big Business, Big Labor, the tech elites of Silicon Valley, politicians from both parties, and racial solidarity organizations continue to prioritize their narrow sectarian interests over the well-being of American citizens. This Labor Day weekend, I ask: Who will speak for the American worker?
Peter Kirsanow is a partner at Benesch, Friedlander, Coplan & Aronoff, a former member of the National Labor Relations Board, and a member of the U.S. Commission on Civil Rights. This article does not necessarily reflect the position of the U.S. Commission on Civil Rights