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Study: Impact of Undocumented Workers on Wages ‘Negligible’

Posted: Apr 12, 2012

Hiring undocumented workers has a ‘negligible’ impact on the wages of documented workers in the same firm, a recent study by the Atlanta Federal Reserve found.

The report found that overall, the wages of documented workers decreased by 0.15 percent — an average of $56 a year — in Georgia firms that also hired undocumented immigrants. Workers in certain sectors, retail and hospitality, actually earned more than they would in firms that don’t hire undocumented workers.

The findings discredit, to some extent, one of the most common arguments used by proponets of laws cracking down on undocumented immigrants. Several states, including Georgia, have passed such laws in the past two years.

Supporters of those laws argue that getting undocumented immigrants to leave will reduce umployment rates in their states. But Julie Hotchkiss, an economist and co-author of the study, says that’s not the case.

“There have been claims by various proponents of state legislation and immigration reform that if we institute these laws that would just get rid of all of our undocumented workers, that our unemployment problem would go away, that the unemployment rate would just plummit,” Hotchkiss said in an interview with the Richmond Times-Dispatch Wednesday. “What we’re finding is that there seems to be no direct displacement effect of documented workers when firms hire undocumented workers.”

Hotchkiss went on to explain that hiring undocumented workers may also have a positive effect on the workforce in general.

“Firms who hire undocumented workers now have an advantage of cheaper labor, which tends to increase production and therefore more workers of all types are hired,” she said.

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