Californian study says immigrants raise wages - even for natively-born dropouts
A new study by Dr Giovanni Peri, an economist at the University of California and at Public Policy Institute of California, looks at the effects of immigrants on wages in California. The Wall Street Journal summarises the report thus:
Using Census data, Mr. Peri analyzed the effects of immigrant labor on California, home to some 30% of all foreign-born workers in the U.S. The University of California at Davis economist found “no evidence that the inflow of immigrants over the period 1960-2004 worsened the employment opportunities of natives with similar education and experience.” As to wages, Mr. Peri found that, “during 1990-2004, immigration induced a 4 percent real wage increase for the average native worker. This effect ranged from near zero (+0.2%) for wages of native high school dropouts and between 3 and 7 percent for native workers with at least a high school diploma.”
Why might that be? Well the report says:
Immigrants usually do not compete directly with the majority of natives for the same jobs. Rather, immigrants often complement native workers in terms of education, skills, and occupations. This complementarity has the potential to increase the productivity of most groups of native workers, with potentially beneficial effects on their job opportunities and wages. In nontechnical terms, the wages of native workers could increase because the increased supply of migrants is likely to put native workers in jobs where they perform supervisory, managerial, training, and in general interactive and coordinating tasks, which makes them more productive. Moreover, the presence of new workers also implies higher demand for consumption…
Some skeptics of immigration say that while there can be a case for allowing foreign workers to enter a country, the government should ensure they are highly skilled. But the evidence in this report and many others is that there are significant benefits of gaining low-skilled workers too.