The Truth About Immigration

This is a central truth in the whole sorry debate over immigration, both legal and illegal, that has been overlooked by both sides: The costs are local, but the benefits are national.

Immigration, legal or illegal, while imposing net fiscal costs on this state, produces a net economic benefit for the country.

I know that’s the truth because the headline of Michael Hiltzik’s recent column is The Truth About Immigration. Headline writers wouldn’t lie to us, would they?

Hiltzik based his column on a recent study from the Center for the Continuing Study of the California Economy, an independent think tank in Palo Alto.
Perhaps their most interesting conclusion, and incendiary for some, is that immigration has not held down wages:

Average wage levels in the state, in contrast with those in the nation, have soared. In 1990, the report says, the average wage was 10.9% above the national average. By 2004 it had moved to 13.4% above the average. Meanwhile, job growth has remained strong — exceeding the national rate from 1994 to 2000 and pacing it since then.
Clearly, California has remained an impressive economic engine throughout the period of heavy illegal immigration. It’s worth noting that the period includes two major economic setbacks — the aerospace-driven recession of the early 1990s in Southern California and the 2000 tech bust in the Bay Area — without which California might well have had the rest of the country eating its economic dust. Of course, neither bust can be remotely traceable to immigration.
What about whether illegal immigrants are displacing native-born Americans in the job force? The arriving workers are concentrated in a few low-wage sectors — although they comprise 4.3% of the U.S. workforce, in 2004 they held 19% of jobs in farming, 17% in cleaning and 11% to 12% in food preparation and construction.
But there’s no evidence that they’ve increased native unemployment or significantly suppressed wages in those trades. A 1997 study by the National Academy of Sciences cited by the new report found only a “weak relationship” between the number of immigrants and native wages. A report this year by the president’s Council of Economic Advisors placed the effect at less than 1% in wages for every 10% increase in the number of immigrant workers. In any event, California’s minimum wage ($6.75 an hour) sets a floor on how much an unskilled worker can be paid.

I would argue that while the generalized conclusion may be accurate, in specific areas and jobs illegal immigration has kept wages down. If illegal immigrants are holding “19% of jobs in farming, 17% in cleaning and 11% to 12% in food preparation and construction”, then the wages in those sectors are lower then they would be without hispanic immigrants. How much would hotels have to pay Americans to do janitorial and hotel cleaning if hispanic immigrants were not flooding the market?
This report is a far better starting point for a rational discussion of hispanic immigration than the current disputatious bickering on television and radio talking bonehead shows.