Thread: Immigrants' effect on economy varies

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Published on Sunday, September 03, 2006.
Last modified on 9/3/2006 at 12:19 am

Immigrants' effect on economy varies
By The Associated Press

DENVER - Walter Marshall knows he's competing with immigrants, both legal and illegal, in his job hunt. He cites a basic economic principle: An influx of Mexicans and Central Americans willing to toil for less money surely depresses wages for working-class citizens.

"Of course it makes it tougher," said Marshall, 54, who recently applied for an $8.25-an-hour job at a downtown Denver Hyatt hotel. "It's supply and demand."

It is easy to find anecdotes and statistics to support the idea that competition from immigrants hurts some U.S.-born workers. But immigration's full effects on the economy are complicated, and the story unfolds differently depending on who's telling it.

Pay in construction and hospitality, sectors known for relying heavily on immigrant labor, have not grown as quickly as pay in other areas.

Although there is no consensus, many economists agree that if anyone is harmed, it is the low-skilled, poorly educated native. George Borjas and Lawrence Katz of Harvard University looked at 20 years of immigration starting in 1980 and found that a high school dropout who made $25,000 in 2000 would have seen his inflation-adjusted wages reduced by about $1,200, or 4.8 percent. Others see a negligible dip and an actual wage gain for the more educated.

Immigration also is seen as one of the culprits in widening the gulf between the wages of workers with skills and those without.

But an array of other factors - the decline of unions, advances in technology, globalization and a recession that brought big job losses in 2002 and 2003 - may have contributed to lackluster wages.

Without immigration, companies likely would replace employees with automation and manufacturers would move more work offshore. Businesses say they might boost wages if the cheap labor force dried up, but they also would raise prices for consumers and probably open fewer new restaurants or factories. And that means fewer jobs.

"If we didn't have all these workers from Mexico, the wages would be higher," said Sam Fox, owner of the restaurant NoRTH in Denver and other eateries.

However, patrons would have to pay up.

Others argue that immigrants do not compete with natives. Rather, they perform work Americans avoid, playing a complementary role that spurs the economy.

Illegal laborers are common in construction, and they earn less.

Don Hanneman of Castle Rock Construction, located south of Denver, is concerned about younger generations' lack of interest in construction and other types of physically demanding jobs.

"Not a lot of guys want to be doing what we're doing," said Hanneman, whose company does highway work, including paving. "For many years, we've been preaching 'Go to college.' This adds up to a lack of a labor force in construction. And we're dependent on our cousins to the south to take care of that."

The flip side of the argument is Americans would do the tough jobs if they came with respectable pay. Hanneman doesn't buy that.

"Rome conquered countries because they needed labor," he said. "Romans didn't want to get their togas dirty.

"Let's face reality," he added. "Neither do we."

Jim Gleason, of the United Brotherhood of Carpenters and Joiners in Colorado, estimated 60 percent of people in carpentry, drywall and concrete framing are immigrants, and a large percentage of them - possibly half - are in the state illegally.

Wages in his industry, he said, have suffered as employers face pressure to keep costs low and turn to cheaper nonunion labor and illegal immigrants. And wages, he said, do not tell the whole story because an increase in pay may come at the expense of benefits.

"It's greed on the part of developers," he said, "especially in housing, where there are billions of dollars in profits to be made and they want to sell a house cheap."


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"Rome conquered countries because they needed labor," he said. "Romans didn't want to get their togas dirty.

And we all know what happened to Rome....the people have no vision and "where there is no vision the people perish."