Friday, August 08, 2008

More on immigration and the economy from Ray Perryman

Check back to this past Tuesday's post to read the first portion of my synopsis of a study conducted by Ray Perryman and his team. What follows are excerpts from the same report dealing with our national reliance on immigrant labor. This dependence on immigrant workers presents many problems, especially for the laborers themselves. But the net benefit to our national economy should factor significantly into any conversation about immigration reform. As always, I'm looking for your responses. LJ

As the era of a plentiful workforce wanes and the "baby boomers" begin to approach retirement, the US economy has found numerous ways to sustain growth and prosperity. These approaches include. . .an increasing reliance on immigrants, both legal and undocumented.

. . .The relative increase in the immigrant share of the overall population in the past few decades, the greater reliance on undocumented workers, and intense political attention have often camouflaged the fundamental economic concerns. . . . The development of immigration policy affects not only national security and other priorities, but also the economy. Overly restrictive policy has the potential to devastate certain industries which would be faced with near crisis conditions in terms of affordable labor.

. . .If all undocumented workers were removed from the workforce, a number of industries would face substantial shortages of workers, and Americans would have to be induced into the labor pool or provided incentives to take jobs far below their current education and skill levels. For this phenomenon to occur to a meaningful extent, substantial wage escalation would likely be necessary, thus eroding competitiveness in global markets.

As the domestic workforce becomes older, more stable in number, and better educated, the US production complex increasingly requires foreign, low-skilled workers. The economy is now relying on more low-skilled immigrant workers than the allowable work visas under current policy.

In 1960, about 50% of men in this country joined the low-skilled labor force without completing high school; the number is now 10%. . . .The total demand [for low-skilled workers] will far exceed the rate of growth in the workforce that will occur from natural expansion and the entry afforded by current immigration policy, leaving a potential gap of tens of millions of laborers. Even if some marginal workers are induced into the workforce from other sources, the need for an immigrant pool to perform these functions is likely to increase.

For several industries and occupations, undocumented immigrants serve as a particularly important source of labor. These include private households, food manufacturing, farming, furniture manufacturing, construction, textile manufacturing, food services, administrative and support services, accommodations, and selected elements of the manufacturing industry.



Anonymous said...

This reminds me of the line in Caddyshack: "The world needs ditch diggers, too."

Anonymous said...

Uneducated illegal immigrant labor may reap some short term benefit, but in the long run, a new lower economic strata appears; one requiring more in socio-economic cost to society