The effect of immigration on the US economy probably isn’t what you think it is. Here are four major misconceptions about immigration.
1. Undocumented immigration alarmists are telling an old and outdated story. Since 2007, more undocumented immigrants have actually left the US than have entered it. One big reason for that is the recession. In the 90s and early 00s, coming to the US was an attractive option because of the healthy economy and the recession completely changed that and, at the same time, US spending on immigration enforcement has gone way up, and it is working. Immigrants don’t actually take natives’ jobs.
2. Here’s the analogy economists sometimes make: After World War II, women in the US started entering the workforce in greater and greater numbers. But that trend didn’t mean fewer jobs for men. Instead, as the number of working women increased, the total number of jobs went up right along with it. In other words, women were not taking men’s jobs. The same economy that brought them into the workforce accommodated them with new jobs and we see the same effect with immigrants. The share of workers who are immigrants has definitely gone up, but so has the total number of jobs.
3. The US needs more workers. For economic growth, you need a growing workforce. But the US isn’t making one. In the modern US, like in most rich countries, birthrates have fallen and if you can’t rely on the population to make more workers, then you need immigrants to fill the gap.
4. Finally, immigrants don’t reduce wages. Here’s something indisputable: wages in the US have been falling for decades. But that doesn’t tell us anything about why. Recently though, two separate economic studies tried to isolate the specific impact of immigration on the wages of native US workers and the math they used was complicated. Too complicated for a chart, but both studies found the same thing during the largest recent period of immigration to the US, immigration was a positive factor on the average native worker’s wages.
Here’s how that’s possible. Immigrants are not just workers. They’re also consumers. They buy stuff and that’s good for businesses. Which means it’s good for the economy.