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Immigrants boost most California workers' pay

Wednesday, February 28, 2007

  • By: Susan Ferriss
  • Organization: Sacramento Bee - Capitol Alert

Published 1:56 pm PST Tuesday, February 27, 2007

A just-released analysis of four decades of Census data found that immigrants have increased rather than decreased the wages of most native-born workers in California.

Between 1990 and 2000 alone, when new immigrants accounted for a 20-percent increase in California's employment, the average real wages of native workers in California rose by 4 percent, according to Giovanni Peri, a University of California at Davis economist.

Native-born high school dropouts, the group assumed to suffer the most negative impact, saw the least gain - 0.2 percent - which is "not much, but it's certainly not a negative," Peri said in an interview.

"In the end it's the data that tells me this," Peri said. "It seems to me there is no hard economic ground for believing that immigrants hurt natives' wages."

Peri produced the report, "How Immigrants Affect California Employment and Wages," for the Public Policy Institute of California in San Francisco.

Peri analyzed wage rates for workers based on age and education levels and found some differences among groups when it came to wage increases.

In his report, which was released Tuesday afternoon, he wrote: "These results should certainly be taken into account by policy-makers as they consider immigration reform. The findings would seem to defuse one of the most inflammatory issues for those who advocate measures aimed at 'protecting the livelihood of American citizens.' "

If California were a country, Peri pointed out, it would be second only to Russia in the number of immigrants it receives. The Golden State, he said, is worth studying to help decide future national policy.

He called what he found in his analysis "remarkable" because it contradicts previous research concluding that immigrants drive down wages for native-born workers because they increase the labor pool and pit immigrants against the native-born in direct competition.

Instead, Peri wrote, "in California, where immigrants are more concentrated, they are specialized in jobs and tasks more complementary to those of natives."

Peri found that between 1990 and 2004, natives with a high school diploma or a college degree saw wages increase by about 3 percent. Native workers with some college education saw wages increase by about 7 percent.

The group whose wages were driven down by continuing immigration, Peri said, are the foreign-born who arrived before 1990. Because they are in more direct competition with new immigrants, they lost between 17 and 20 percent of their real wage between 1990 and 2004, according to the analysis.

However, Peri said, this outcome is not necessarily grim for many immigrants who have been here longer because many have relatives - a wife or a son - who are new immigrants and they are able to pool resources for households.

Peri said he was able to isolate the impact of California's immigrant influx by isolating and controlling the data from other phenomenon that affect wages, including business cycles and technological changes.

Previous academic research by some other economists has focused on immigrants vs. native workers as a whole, or on African Americans only. Some reports found that black high school dropouts' saw their wages significantly depressed by immigrants.

Peri said he didn't divide the groups of workers he based his research by ethnic group.

He said he believes his research is more valid than many other studies, however, because he used more years of immigration and workplace data than many other studies and compared immigrants and the native-born based on age and education levels rather than as two whole groups.

"The skills are different," he said.

Immigrants with low levels of education are not competing with natives who are highly skilled, Peri said. He also said immigrant labor spurs the economy and boosts demand for natives to step into jobs that require more skill - even if it's the ability to speak English, including work as supervisors or more complex tasks. He cited construction work as an example.

"Natives come up and make supervisors," he said. "This shields them from the wage impact."

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