Foreign-Born Engineers and Scientists Don't Undercut Wages: They Earn More
Stuart Anderson is a director of trade and immigration studies at the Cato Institute.
Added to cato.org on October 25, 1996
This article appeared on cato.org on October 25, 1996.
Contrary to the conventional wisdom, new research demonstrates that foreign-born
scientists and engineers in Silicon Valley and elsewhere do not increase unemployment
for natives and actually earn more than their American-born counterparts. That
undermines the key premise of restrictive legislation by Senator Alan Simpson,
who has asserted that immigrant professionals work for one-third less pay just
so they can get a green card.
The research findings I uncovered for a recent study on
employment-base immigration do not mean the foreign-born are taking
high-paying jobs from Americans or doing well at the expense of
the native-born. The number of jobs available in the U.S. economy
is not a fixed number, nor is the amount of compensation paid to workers static and fixed. Both grow based
on several factors, including labor force growth, technology,
education, entrepreneurship and research and development.
No correlation exists between a high percentage of
foreign-born PhDs working in a field and a high unemployment rate within
that field. Engineering and computer science have the highest
concentration of foreign-born in any PhD field, yet have
unemployment rates of only 1.7 percent and 1.0 percent.
Stuart Anderson is a director of trade and immigration studies at the Cato Institute.
Geosciences and the social sciences have a low percentage of
foreign-born PhDs, and the unemployment rates in those fields are
2.2 percent and 2.8 percent respectively.
Even more significant is what analyzing unpublished data
obtained from the National Academy of Sciences and National Science
Foundation reveals. The data show that foreign-born engineers and
scientists earn higher salaries than their native-born counterparts
who completed their Ph.D.s and master's degrees in the same year.
This is clear evidence that the foreign-born are not bidding down wage
rates by being willing to work for less than the native-born,
since, on balance, the foreign-born are paid more.
According to the data, the annual median earnings of
foreign-born engineers and scientists are $1,100 more than those of
the native-born one to five years after completing their master's
degrees, $2,000 more 11 to 15 years after, and $4,000 more 16 to
20 years after.
At the Ph.D. level, the data are even stronger (see table).
Foreign-born Ph.D. scientists and engineers one to six years out
of school earn $44,000 compared to $40,000 earned by the
native-born. The gap between the two groups increases until
reaching a $10,000 foreign-born advantage for those 16 to 20
years after having received a Ph.D.
The data measures people who completed their degrees in the
same year, which is crucial, since, all things being equal, an
individual 15 years in the field will earn more than someone
relatively new. Other things held constant, one would expect to
find that immigrants are paid less than the native-born because of
the obvious advantage of the native-born in language and culture.
Wages are a function of productivity. We can only conclude
then from the data that the foreign-born who work in America are
exceptionally productive.
1993 Median Salaries of U.S. Recipients of Ph.D.s in
Science and Engineering: Foreign-Born vs. Native-Born
Years Since
Earning Degree
|
Foreign-Born
|
Native-Born
|
| 1-5 years since degree |
$44,400 |
$40,000 |
| 6-10 years |
$55,400 |
$49,200 |
| 11-15 years |
$64,000 |
$56,000 |
| 16-20 years |
$70,000 |
$60,000 |
| 21 years or more |
$70,200 |
$68,000 |
Source: Unpublished National Science Foundation
tabulation of the 1993 Survey of Doctoral Recipients and the 1993 National
Survey of College Graduates. Foreign-Born includes naturalized U.S.
citizens, permanent residents and workers on temporary visas
(including H-1B visas). |
Research and development would fly offshore if immigration
restrictions prevented high tech companies from hiring the people
who contribute to America's next generation of products and
innovations. In fact, 28 percent of Ph.D.s involved in research
and development in the U.S. are immigrants. How would the United
States be stronger if instead these highly educated people went
to work for our competitors overseas?
Can we find stories of people being exploited because they are
immigrants? Undoubtedly, but there is no evidence this iswidespread
in the science and engineering fields. Pay scales at companies do
not differentiate by national origin or immigration status; they
are established through examining an individual's merit,
experience and education.
The issue of whether foreign-born engineers are paid less than
American-born engineers is best summed up by Ehud Yuhjtman, an
Israeli-born engineer at Santa Clara-based Chip Express, who
often interviews prospective hires. "You cannot pay
foreign-born engineers less. These are smart people, if you try
to fool with them, then they will go someplace else."
OF SPECIAL NOTE
NEW ONLINE RESOURCE
Healthcare.Cato.org
Provides in-depth analysis of health care issues and reform initiatives with a wealth of resources on how individual choice and competition—not more government control—are the changes we need.
NEW BOOKS
The Beautiful Tree
An inspiring personal journey into the lives of families and teachers in the poorest communities of India, Africa, and China who have successfully created their own private schools in response to failed public education.
The Power Problem
Documents the enormous costs of America's military power, and proposes a new grand strategy that will advance U.S. national security by establishing a new set of rules governing the use of force abroad, and reaffirming the Founders' intention to restrain the president's ability to make war.
Climate of Extremes
An in-depth look at consistent, solid science on the other side of the gloom-and-doom global warming story that is rarely reported and pushed aside: that global warming is likely to be modest, and there is no apocalypse on the horizon.
SUBSCRIPTIONS
From audio recordings of the best of Cato's events to articles by world-class experts, CatoAudio, Regulation and Cato Journal offer an amazing range of quality news and analysis.
Cato on Facebook
Cato on Twitter
Cato on YouTube
Cato RSS
PRINT PAGE
CITE THIS
