A September 2016 report by the National Academies of Sciences, Engineering, and Medicine, titled “The Economic and Fiscal Consequences of Immigration,” found that immigration has a long-term positive economic impact in the US, according to a report for Our Future by Richard Eskow. The report was published during the 2016 presidential campaign, during which Donald Trump repeatedly claimed that immigrants steal jobs and drive down workers’ wages.
As the Academies’ report documents, although first generation immigrants may be costly to state and local governments—due to increased educational costs, for example—the second generation “are among the strongest economic and fiscal contributors in the US population, contributing more in taxes than either their parents or the rest of the native-born population.”
What impact do immigrants have on wages? Immigration, the report says, has “little to no negative effects on overall wages and employment of native-born workers in the longer term.” Immigrants also contribute to the labor force, often by performing jobs that many native-born Americans are unwilling to do. This helps drive prices of some goods and services down. Aside from improving consumer markets, immigrants are also “a source of demand” for goods and services, which stimulates the economy.
Importantly for the long-term health of the US economy, the steady supply of immigrants has cushioned the US from the problems of stagnation that other countries’ economies are currently facing due to “unfavorable demographics,” including especially “the effects of an aging workforce and reduced consumption by older residents.” The report also finds that immigrants have enhanced the US capacity for “innovation, entrepreneurship, and technological change,” which further creates jobs, fosters competition, drives wages up, and improves standards of living. Regardless of being an immigrant or a native-born, people with higher educational attainments contribute more economically.
Eskow asks, “If immigrants aren’t weakening wage growth and job prospects, who is?” Attention is directed toward the billionaire class as those most responsible for job outsourcing and salary cuts. Eskow notes that the wealthiest Americans who comprise the 0.01% of the (16,000) richest Americans hold as much wealth as 80% of the US population or 256,000,000 people. The majority of the one percent’s collective net worth of $2.6 trillion comes from the 536 billionaires at the end of 2015. With the inclusion of Ultra High Net Worth Individuals (UHNWIs) who “are worth hundreds of millions of dollars apiece,” this collective net worth becomes over $9 trillion in 2016, while the bottom 75% holds $6.2 trillion in 2013.
Eskow notes the findings of a June 2015 IMF study, “Causes and Consequences of Income Inequality: A Global Perspective,” which confirmed that increasing the wealth of the richest people weakens economic growth. Redistributing wealth to the bottom 20% is associated with higher levels of economic growth and more job creation. Eskow also quotes Nobel Prize-winning economist Joseph Stiglitz, an expert on inequality, who has said, “Our middle class is too weak to support the consumer spending that has historically driven our economic growth.”
Regardless of studies like “The Economic and Fiscal Consequences of Immigration” and “Causes and Consequences of Income Inequality: A Global Perspective,” corporate media continue to reinforce anti-immigrant myths. For example, the Daily News claims inequality is necessary for driving strong economic growth, and The New York Times says it incentivizes people to get more education to attain better paying jobs, but they do not acknowledge the evidence pointing to greater economic instability or reduced opportunities for people to improve their standards of living. Until Americans are given the actual news information for understanding the US power structures, many people will continue believing immigrants are the root causes for their economic misfortunes and the 1% will continue profiting from institutionalized inequality.
Source: Richard Eskow, “Immigrants Don’t Steal Jobs or Wages. Billionaires Do,” Our Future, September 22, 2016, https://ourfuture.org/20160922/immigrants-dont-steal-jobs-or-wages-billionaires-do.
Student Researcher: Felix Siu (Sonoma State University)
Faculty Evaluator: Roxanne Ezzet (Sonoma State University)