So Immigrants Displace American Workers—But What About The Impact Of Immigrants’ Children?

Article author: 
Edwin S. Rubenstein
Article publisher: 
Article date: 
29 June 2016
Article category: 
Our American Future
Article Body: 

...No-one at all pays attention to the fact that it’s now nearly fifty years since the 1965 Immigration Act kicked in, and the children of immigrants—who with immigrants are what demographers call the “immigrant stock”—are now also having an impact on the job prospects and wages of the Historic American Nation, the native-born Americans derived from the population already here in 1965...

The background: Paul Samuelson, the first American to win a Nobel Prize in economics, wrote shortly before enactment of the 1965 Immigration Act.

After World War I, laws were passed severely limiting immigration. Only a trickle of immigrants has been admitted since then…By keeping supply down, immigration policy tends to keep wages high. Let us underline this basic principle: Limitation in the supply of any grade of labor relative to all other productive factors can be expected to raise its wage rate; an increase in supply will, other things being equal, tend to depress wage rates.

Economics [1964]

More than fifty years later it is clear that Samuelson was right: The post-1965 immigration surge coincided with increased income inequality and a fall in wages for most American workers. By contrast, the sharp immigration reductions in the 1920s ushered in a forty-year period during which ordinary workers got richer while the rich got relatively poorer.

Harvard economist George Borjas has quantified the wage loss from post 1965 immigration. Among his research findings:

    Immigrants arriving between 1980 and 2000 reduced the average annual earnings of native-born men by about $1,700 or roughly 4%.

    Among high school dropouts, who roughly correspond to the poorest tenth of the workforce, the impact was even larger—a 7.4% wage reduction.

    Wage losses of native-born blacks and Hispanics are significantly larger than whites because a much larger share of those minorities directly compete with immigrants.

    Native-born college graduates are not immune, their income falling by 3.6% due to the two decades worth of competing immigrants.[ Increasing the Supply of Labor Through Immigration: Measuring the Impact on Native-born Workers, , By George Borjas,,  April 2004 ]

In general, native-born American wages fall as the foreign-born share of the workforce rises.  Borjas’s rule of thumb: each 10% rise the immigrant share of the U.S. working age population reduces the wage of native-born workers by about 3.5%. This relationship implies that the average native-born worker suffered a wage loss of 5.9% in 2012—a year in which 16.8% of the population ages 18 to 64 was foreign-born, according to a Pew Research report. In dollars, this translates to a $2,600 wage loss suffered by the average native-born worker – money that would have been theirs but for the presence of foreign born competitors in the workforce.

But what about the impact of second generation immigrants—U.S. born persons with at least one immigrant parent? They accounted for 8 per cent of the total working age population in 2012, according to the same Pew Research Center study. At 15.5 million, they were nearly half as large as the foreign-born population itself...