Amnesty and the American Worker

Executive Summary

Unemployment is at its highest level in 27 years. Since the current recession began in 2007, the U.S. economy has lost over 8.4 million jobs, the largest drop since the Great Depression. According to February 2010 Census Bureau figures, 13.2 million native-born workers were unemployed — not including those Americans who have been forced to work part-time, taken temporary work, or who have given up looking for work altogether. At the same time, there are an estimated 7.5 million illegal aliens in the U.S. workforce.

The economic opportunities for less-educated native workers have steadily decreased as illegal immigration has increased. The correlation is evident and has been identified by a consensus of labor economists. The influx of uneducated, unskilled illegal alien workers has created a massive labor surplus at the lower end of the labor market. Today, the unemployment rate for those without a high school diploma is over three times that of those who have a college degree. And wages for the working class have stagnated since the 1970s, widening the income gap considerably.

There are many out-of-work Americans who want and need the jobs now being held by illegal aliens. Illegal aliens are doing work not just that American will do but that Americans are doing. From housekeeping to meatpacking, food service to construction work, the native-born make up the majority of workers in these occupations. However, as the share of illegal aliens rises, jobs available to native workers became scarce, and their wages and work conditions diminish.

Fewer Americans can now find entry level jobs, which provide valuable work experience for teenagers and young adults. Wages in many labor intensive occupations have also been kept low by illegal immigration. Jobs that once provided for a solid middle class lifestyle now pay so little and offer so few benefits that workers struggle to support their families. The argument that there is a labor shortage among low-educated, low-skilled workers is patently false. As Vice-President Biden’s chief economic advisor has noted, what is really lacking are employers who are willing to pay legal workers a fair wage.

Even if the Obama administration’s optimistic job growth projections materialize, there would still not be enough new jobs to keep up with the rate of U.S. population growth. In order to put Americans back to work and strengthen the U.S. economy, the federal government must pursue an immigration policy that acknowledges the balance between the supply of labor and the demand for jobs. Securing the border and taking meaningful action to prevent the employment of illegal aliens would immediately begin to free up millions of jobs now held by illegal aliens. Yet, the Obama administration supports amnesty for illegal aliens, which would continue to put of Americans out of work and keep wages artificially low for native-born workers.

An amnesty would reward those who broke the law to enter and work in the illegally U.S., and it would reward the employers who hired them. Those Americans who compete with illegal aliens for scarce jobs would continue to suffer. The lesson of the 1986 amnesty should serve as a model of how not to approach immigration reform, and as a stark reminder of the promises politicians made then to secure the border and end illegal hiring practices. For some reason, there are lawmakers today who want to repeat the failures of 1986 on a massive scale. The 1986 amnesty had terrible consequences for American workers. An amnesty today would further undermine the position of lower income Americans and generate enormous fiscal costs that would overburden U.S. taxpayers and cripple the U.S. economy.

Illegal immigration has become, in effect, an inexhaustible source of government sanctioned and subsidized low-wage labor, eroding the welfare of less-educated native-born workers. This report takes a look at how illegal immigration has put Americans out of work and reduced wage levels for all workers across broad sectors of the economy. It also underscores the failure of the 1986 amnesty and the realities of what an amnesty would mean today. Included in the report are the following points:

  • There are 25.8 million unemployed, underemployed, or “discouraged” U.S. workers. The unemployment rate for workers with less than a high school diploma: 15.6 percent; with only a high school diploma: 10.5 percent; blacks: 15.8 percent; teenagers: 25 percent; Second Gulf War veterans: 13.4 percent.
  • Real wages for American workers have remained stagnant for the past 35 years and the income gap has widened even as the U.S. GDP has continued to increase. Research has shown that the share of GDP attributable to immigrant (including illegal alien) labor is split between the immigrants and their employers.
  • Between 1980 and 2000 real wages fell for native-born workers with a high school diploma or less. For certain groups and in certain sectors, the drop was even greater. Overall real wages for males with less than a high school diploma fell 22.3 percent, and workers in the meatpacking industry saw a 45 percent decrease in their real wages between 1960 and 2002.
  • Almost half of all adult illegal aliens presently in the United States do not have a high school diploma, and 30 percent have less than a 9th grade education. They are competing directly against native-born teenagers and less-educated adults for jobs.
  • While economic conditions did improve for some recipients of the 1986 amnesty, this was largely confined to those who had the highest education levels and spoke English well. As a group, however, those who received amnesty in 1986 showed no upward mobility 15 years later.
  • The argument that an amnesty would bring in more tax revenue ignores the fact that the income of most illegal alien households is below the tax threshold. Instead of becoming net taxpayers, amnesty recipients would qualify for tax credits, as well as government entitlement programs. This would cost U.S. taxpayers an estimated $700 billion a year.

The full report is available in pdf format.