As a big immigration reform package moves through the Washington meat grinder, labor groups are trying to protect lower-skilled workers from losing jobs to a new stream of legal immigrants. But it may be a losing battle.
Lobbying by the AFL-CIO recently helped persuade business groups such as the U.S. Chamber of Commerce to agree to a lower cap on the number of foreigners who might be able to get U.S. work visas every year. Business groups had wanted an annual cap of 400,000 visas or more, but they agreed to a lower cap of 200,000. And even that number would be a maximum, with far fewer visas granted in a weak economy with high unemployment. The idea is to limit the number of immigrants who might compete with low-skilled "natives" for hotel, restaurant, retail and construction jobs, and drive down pay be agreeing to work for less. Labor groups probably exaggerate the extent to which foreign workers, regardless of their legal status, bump Americans out of their jobs, but there is some evidence that lower-paid immigrants push average pay down in some fields.
Still, capping the number of legal immigrants probably won't do much at all to improve job prospects for low-skilled Americans. For one thing, there are simply too many of them. There are currently 4.1 million unemployed Americans with a high school education or less, and many more who don't count as unemployed because they've given up looking for work.
Even during the peak of the last boom, in 2007, there were 2.5 million unemployed Americans with a high-school education or less. So keeping 200,000 immigrants out of the labor force would reduce the supply of such labor by less than 10 percent under the best conditions. And virtually no economists are predicting a return to peak employment any time soon.
As it is now, the role of immigrants who are here illegally has shrunk dramatically. In the late 1990s, when the economy was surging, an estimated 350,000 to 500,000 foreigners snuck into the United States illegally each year looking for work. The numbers now are far lower, because jobs are scarce, enforcement along the borders is much tougher, and the birth rate in bordering Mexico has slowed dramatically. Even so, low-skilled Americans face unemployment rates two to three times the rate for college graduates, with eroding pay and benefits.
Finally, tougher limits on legal immigrants could backfire if they lead to a labor shortage at some point in the future. If employers can't find enough workers in some sectors or regions, that will create stronger incentives for foreigners to chance it at the border and try to sneak into the country. And companies will have more reason to risk federal penalties and hire them.
Even though there may be patches of the economy where immigrants seem to be pushing natives out of work, the solution to improving the prospects for low-skilled Americans isn't to rein in the competition.
"Natives ought to respond to low-skilled immigrants by moving up the skill ladder," says Madeline Zavodny, a labor economist at Agnes Scott College in Decatur, Ga., and a visiting scholar at the American Enterprise Institute. "If the goal is to help low-income workers earn more, the best thing to do is help them boost their skill levels and get more education."
Other measures that have nothing to do with immigration are meant to help low-income workers get ahead, such as job-training programs and incentives such as the earned-income tax credit. But labor groups still have made the protection of low-skilled workers a stated goal, perhaps to boost credibility with their rank and file, or even to lure more union members as more immigrants arrive in America legally.
Low-income workers face a tough road no matter where they come from, however. Globalization allows companies to locate much of their work wherever they can find the lowest costs, and new immigration rules won't do anything to change that. And workers with the weakest skills will still suffer the most and longest from a slack labor market that's likely to persist for years. Anybody hoping that immigration reform will improve job security faces a long wait.
Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.