http://quote.bloomberg.com/apps/news?pi ... news_index

American Workers Rejecting Jobs as Immigrants Drive Down Wages
June 26 (Bloomberg) -- President George W. Bush, addressing the nation on his immigration-overhaul plan last month, declared that granting temporary visas to immigrants would merely give them a chance at ``jobs Americans are not doing.''

A growing number of economists challenge the contention that Americans aren't willing to take on those low-end jobs; it's kitchen-table economics, not the sweat factor, that keeps them away.

These economists' studies indicate many Americans want those jobs -- they just can't afford to take them because of declining pay and benefits. And they say the influx of immigrants has helped drive down compensation in occupations such as the needle trades, landscaping and restaurant help.

``The idea that somehow you have a need for people to do jobs that Americans won't do is just insane,'' says George Borjas, an economist at Harvard University in Cambridge, Massachusetts, who has written extensively about immigration and wages. He says that as immigrants flow into an occupation, ``the wage goes down, and you go do something else.''

The issue has become central to the debate over immigration, a controversy that has divided the Republican Party and the nation.

Philip Harvey, a professor of law and economics at the Rutgers University in New Brunswick, New Jersey, says that salaries for the lowest-wage workers in all occupations increased by 7.4 percent from 2001 to 2005, while pay for all jobs rose by 11.4 percent during the same period. Harvey's study used data from the U.S. Bureau of Labor Statistics.

Recent Decades

The disparity is greater over recent decades. The bottom 10 percent of wage-earners is the only group that has seen a decline in real wages -- 2.4 percent -- since 1979, according to the Economic Policy Institute, a Washington think-tank with ties to organized labor. The group's study was also based on data from the Bureau of Labor Statistics.

Administration officials, who are advancing a plan to establish a guest-worker program for immigrants and a path to citizenship for undocumented aliens, say newcomers aren't elbowing aside American job-seekers. ``We have got jobs that are available, that need to get done, that American citizens are not willing to do,'' Commerce Secretary Carlos Gutierrez said in a June 14 interview.

The precise effect of immigration on the U.S. economy is a source of debate among economists. Some say it isn't fair to blame immigration flows for wage shifts. The transition to a post-industrial information economy and the growing impact of globalization may be more critical factors, they say.

``Immigration has relatively little to do with the state of the American job market,'' says Bradford DeLong, professor of economics at the University of California at Berkeley. ``Globalization has a bunch.''

Exaggerated Threat

Pro-immigration business groups say that those on the other side of the debate exaggerate the threat posed by undocumented workers. Martin Regalia, chief economist at the Washington-based U.S. Chamber of Commerce, the nation's largest business lobby, says many of the nation's unemployed are seeking higher-end jobs than those that immigrants typically take.

In Regalia's view, heeding calls to send undocumented workers packing would create labor shortages. ``The hyperbole that comes into this debate doesn't mesh well with the numbers,'' he says.

Immigrants form a larger segment of the work force in the U.S. than in some European countries. Foreign-born workers made up 14.7 percent of the U.S. civilian labor force in 2005, according to Census data. In the U.K. and Germany, the figures were 9.6 percent and 12.2 percent respectively in 2004, the last year for which they were available, according to the Organization for Economic Cooperation and Development.

Continued Interest

There is evidence that Americans continue to be interested in low-skill jobs ranging from tailoring to hotel service to food preparation, some of the industries where immigrants are making their biggest inroads.

Steven Camarota, research director of the Center for Immigration Studies, a Washington-based group that backs immigration controls, says Census data show U.S. natives still make up the majority of workers in most of these occupations.

For example, he said, indigenous workers account for 62 percent of all maids and housekeepers and 60 percent of dry-wall installers, based on 2003-2004 Census figures. ``There's a high degree of native interest in being a maid or housekeeper,'' Camarota says. ``If the wages were better, you certainly could attract more.''

Loading Freight

James Lynch, a 45-year-old unemployed electrician from Fayetteville, North Carolina, says he's unloaded freight and held two other temporary jobs since he lost a well-paying position at an electrical-contracting firm in Durham in 2004. None of those stints led to permanent work, a situation he blames on immigrants willing to toil for sub-par wages.

Lynch says he passed up the chance to apply for full-time status at his subsequent jobs because employers ``wanted me to work for a lot less pay than I'm used to getting. They can go and get cheaper labor'' from immigrant ranks.

Immigrant wages are lower on average than those for the native-born, according to a study by the Urban Institute, a Washington research group. It found nearly half of immigrants earn less than 200 percent of the minimum wage as opposed to about one-third of native-born workers.

Still, some economists say, if immigrants are grabbing off so many jobs, why has the U.S. entered a period of sustained low unemployment? The national unemployment rate in May was only 4.6 percent.

Other experts say the rosy unemployment numbers mask the growing number of Americans who are not participating in the labor force. That number rose to 35.5 million in 2005 from 30.8 million in 2000, says Camarota, citing Census data.

Beyond the Fringe

Aside from low wages, the lack of fringe benefits for jobs in low-wage industries may be discouraging native-born applicants. The percentage of workers earning between $10,000 and $20,000 a year who were eligible for a company-sponsored health plan in 2002 was 56 percent, compared to 92.4 percent for those earning $50,000 or more, according to an analysis by the non- partisan Employee Benefit Research Institute.

In construction, one of the U.S. occupations where immigrants make up an increasing share of the workforce, 46 percent of workers have no employer-provided health plan, statistics compiled by the Laborers' International Union show.

For his part, Bush continues to assert that immigrant labor is vital to economic prosperity. ``It makes sense to say, if someone is willing to do a job Americans aren't doing, here's a temporary way to come and work,'' he said in May 18 remarks in Yuma, Arizona.

-- With reporting by Holly Rosenkrantz in Washington. Editor: Walczak (khf/scc).



To contact the reporter on this story:
Heidi Przybyla in Washington at hprzybyla@bloomberg.net