A report claiming that the influx of new immigrants to the United States has made almost all Americans wealthier has been researched by the San Francisco Federal Reserve Bank on the controversial topic of whether immigration helps or harms the employment situation of American citizens.
This report, released on Monday, was authored by Giovanni Peri, an economics professor at the University of California, Davis. He is currently a visiting scholar at the San Francisco Fed. The report counters the views of those who believe that immigrants take jobs from American citizens and depress wages.
Peri states in the report that there is no evidence, either in the short term or long term, that immigrants displace jobs held by native-born American workers. On the contrary, there is evidence that the U.S. economy absorbs immigrants by expanding employment rather than at the expense of replacing jobs held by native-born Americans.
According to an analysis of state-level statistical data, Peri notes in the report that immigrants have expanded the productivity of the U.S. economy through stimulating investment and promoting specialization, thereby increasing economic efficiency and per capita income.
This research report primarily starts from the overall stimulating effect of immigration on economic growth, analyzing in detail how immigrants subtly help native-born American workers increase their wages rather than depress them.
The report estimates that for every 1% increase in the immigrant population relative to the workforce, per capita income increases by 0.6% to 0.9%. More broadly, between 1990 and 2007, the total immigrant population in the U.S. contributed to a real increase in per capita worker income of 6.6% to 9.9%.
Peri states in the report that, when adjusted for 2005 constant dollar prices, this corresponds to an average annual income increase of about $5,100 for the typical American worker, meaning that from 1990 to 2007, the real total increase in registered American workers' per capita annual income was 20-25%.
However, the report does not distinguish between legal and illegal immigrants, but rather includes them all in the statistics.
According to a survey by the U.S. Census Bureau, in 2007, nearly 23 million of the 153 million labor force in the U.S. were born outside the United States. The Department of Homeland Security estimates that at the beginning of 2009, there were nearly 11 million illegal immigrants in the U.S., with more than half coming from Mexico. In contrast, government data shows that there are only over 20 million legal immigrants.
In the complex and controversial political context surrounding immigration issues, this report from the San Francisco Fed is sure to attract much criticism. As the Federal Reserve branch located in the far west of the United States, the San Francisco Fed does not shy away from hot-button issues in its research, having discussed earlier this year whether expanding unemployment insurance benefits would lead to excessively low unemployment costs that encourage unemployment. That report concluded that the increase in unemployment due to expanded unemployment insurance would only be a very small portion. Due to the persistently high unemployment rate in the U.S., the proposal to expand unemployment insurance ultimately fell through.
