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A Tribute to Immigrants on Labor Day

New America Media, Commentary, Manuel Pastor Posted: Sep 06, 2009

Editors Note: Immigration should be seen as part of the solution to U.S. economic challenges, rather than the source of its problems, says University of Southern California Prof. Manuel Pastor. On Labor Day, it is important to remember that immigrant labor has been a key to economic growth, and it will continue to be in the future. The following remarks are adapted from an address that Pastor made at a conference sponsored by the Economic Policy Institute.

Immigration is frequently perceived as a structural problem, particularly in times of economic crisis. But it bears remembering that we, over the last 15 years, absorbed about 7.2 million undocumented workers. And it was not workers crossing the border in search of employment who triggered this crisis. It was Wall Street bankers who crossed the borders of common sense in pursuit of profits.

So if we look at the evidence, what the evidence tells us in general is that immigration is a boost for economic growth in this country. We do have to worry about the distributional impacts of it. One of the most famous researchers looking at this distributional impact is George Borjas at Harvard University. He found out that, over a period of 20 years, immigrants caused about a six percent drop in the wage for low-skilled U.S. born workers. Other economists pointed out that he had not corrected for the positive economic growth impacts of immigrants. And so, hes revised those estimates down to a three percent decline in the wages for those lacking a high school education.

David Card of the University of California, Berkeley, has found a zero percent effect or perhaps a negative one percent effect. So lets split the difference and say its a 2 percent effect over 20 years. This suggests that a 10 percent increase in the minimum wage could erase a century of immigrant competition. And that suggests that we just might be barking up the wrong tree in terms of what the reforms are that we really need in our labor market.

When you look at the economic effects, whites actually benefit most from immigration because its essentially complementary labor and lowers consumer costs. Latinos are for the most part hurt by it because they compete in exactly the same labor markets. And African Americans have both positive and negative effects.

Now, this suggests that African Americans may be the only rational political actor in the U.S. system. And this was a large part of my reason for voting for Barack Obama.

Now, the big change that people worry about, of course, is the coming change in demography. The United States will be a majority-minority population by the year 2042, with most of that growth coming from Latinos, and not so much from immigration as from U.S. births.

This is a concern that people have. And they look at it as a threat. I understand. We went through this in California. We became a majority minority state. I remember the exact day it supposedly happened. You know how demographers seem to able to predict things like the exact day the 300 millionth baby was born? Well, it was Dec. 15, 1999, and I kept getting phone calls all day long from reporters who were quite anxious about this change. They just kept saying: What does this mean? What does this mean? And finally, I said, "Well, I dont know. But were having a salsa party at my house tonight to celebrate. In the spirit of the new California and the new America, everyones invited. They just need to learn a new step."

If we look at the real demographic challenge thats facing the United States, it is not this growth in a minority population that is most pressing. It is, as my colleague Dowell Myers (at USC's School of Policy, Planning and Development)constantly points out, the demographic change that is coming with the retirement of the baby boomers. And what weve got with the baby boom retirement is about a 17-year tsunami of retirements that is going to create a huge dependency ratio and a need for younger workers.

And this, Myers argues, suggests that we need to take a different approach, an approach that begins to look at immigrants not as outsiders or outcasts, but as part of the solution to our real demographic dilemma: how do we begin to have a workforce that can support our nation into the future?

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