An immigration-reform bill is being constructed on Capitol Hill. Provided it addresses border-security concerns, the time has come for conservatives to embrace a reform measure—and the reasons are not just political; they are economic as well.
After the Senate's "Gang of Eight" released its immigration-reform principles, Rep. Lamar Smith, R-Texas, stated that it would "cost Americans their jobs when they have to compete with millions of more [immigrants] for scarce jobs." Implicit in his assumption is that immigrants "take" jobs from Americans. But that is untrue.
But if immigrants "take" jobs from Americans, then so must any new entrant in the workforce also take a job from another American. If the number of jobs is fixed and adding new labor just increases unemployment—which would be the logical conclusion to this argument—unemployment should increase over time as the population grows. The reality is the precise opposite.
From 1948 to 2012, the size of the U.S. labor force went from 60 million to 156 million—a two-and-a-half-fold increase. Over the same time, the number of people employed in the U.S. labor market has increased from 58 million to 148 million. There would be about 90 million fewer employed Americans today than there are if new workers entering the labor market actually prevented older workers from getting jobs.
This 90 million net gain in jobs since 1948 is impossible to explain for people claiming that immigrants "take jobs" from Americans.
The large increase in the size of the U.S. labor market has been due to two phenomena: the increased entry of women into the labor force, and immigration. After World War II, women began to enter the labor force in dramatic numbers, rising from 17 million women in 1948 to 73 million in 2012—a more thanr fourfold increase in little over 60 years. Women went from a paltry labor-force participation rate of 33 percent to 58 percent.
During the same time, male workers went from 43 million to 76 million workers, increasing by a far more modest 77 percent. The male labor-force participation rate, however, has declined from 87 percent to 70 percent, reflecting the aging of the workforce, the Great Recession, and government assistance for the unemployed. What's clear, though, is that the economy created jobs for both men and women over the decades.
Immigration has also swelled the labor force. In 1950, immigrants numbered about 10 million and were roughly 7 percent of the population. Today there are 40 million immigrants, and they constitute 13 percent of the population. An average of 600,000 legal immigrants have come here annually since 1948, accompanied by a smaller but substantial number of unauthorized immigrants.
But the data are even more positive than that. During this time the proportion of the U.S. population that is employed has increased by 2 percentage points. Furthermore, the labor-force participation rate, the percentage of Americans employed or looking for a job any given month, is 5 percentage points greater in 2012 than it was in 1948—an astonishing increase considering our moribund economy.
Women did not "take" the jobs of American men when they entered the labor force, and neither have immigrants. The total size of the U.S. workforce and the number of people employed have increased dramatically over the decades. Recessions and periods of slow employment growth, such as the 1970s and the Great Recession, produce kinks in that trend, but it is unmistakably positive.
Immigrants, like native-born American women and men, create jobs by starting businesses and consuming and producing goods and services. According to the Kauffman Foundation, immigrants are more than twice as likely to start a business as native-born Americans. High-tech firms like Google, cofounded by Russian immigrant Sergey Brin, and low-tech ones like Panda Express, founded by the Cherng family from Taiwan, employ Americans and create goods and services that Americans want.
Immigrants' skills often complement American ones, meaning that when immigrants and natives work together, both produce more and earn higher wages than if they were working in separate countries. Immigration does not divide a fixed pie of wealth; it increases wealth, incomes, and job opportunities for everybody.
The view that workers, whether women or immigrants, "take" jobs is a new iteration of the old socialist notion—the basis for class warfare—that there is a fixed and static pie of wealth to be divided by some wise central planner. This notion was debunked by free-market economists more than a century ago. It's time for opponents of immigration reform like Rep. Smith to learn that lesson and trust the market to regulate immigration flows better than the government.