Guest Commentary: Why Immigrants Are Good for the Economy

A high school econ teacher did the math. While there may be reasons to curb immigration—money isn’t one of them

Guest Commentary: Why Immigrants Are Good for the Economy

A high school econ teacher did the math. While there may be reasons to curb immigration—money isn’t one of them

The Philadelphia Inquirer recently reported that Philadelphia arrests more noncriminal immigrants than any other city in the country. For some this news will be well received. Others will protest such a statistic, and both sides will invoke an array of standard arguments in defense of their positions.

One such category for arguments for the latter, however, can no longer be adequately proffered: economic arguments. A recent spate of news about the economic effects of immigration suggest that immigration is a net benefit on local economies. If one looks at Philadelphia they will see just these results.

Two economic arguments are commonly made against immigration. The first and most common argument is that non-legal immigrants take jobs away from American citizens. This claim, however, runs counter to a famous 1990 paper that found no effect on employment levels in Miami after the Mariel boatlift.

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Recent research similarly finds that the immigration of high-skilled labor increases employment for native workers, while other research affirms that the hiring of immigrants increases productivity and exports by businesses, thereby maintaining domestic jobs.

The second economic argument against immigration derives from the first, but is usually proffered as a stand-alone argument: the wages effect. This latter argument asserts that a non-legal immigrant is likely to be hired over a citizen because the employer need not pay her a minimum wage. American citizens, facing competition from those lower-payed will ultimately need to accept lower wages than the labor market might otherwise offer.

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Yet just as before, the evidence is not supportive of such a position. As is reviewed by the Cato Institute and Noah Smith at Bloomberg View, there is no trade-off between immigration and wages; in fact, immigration may result in wage increases. Taken together, there is little macroeconomic justification for restricting immigration.

Philadelphia’s labor market experience with respect to immigration’s effect on wages and employment appears to bear this out. Several studies have highlighted Philadelphia’s immigration rates. For example, a Brookings Institution paper concluded that Philadelphia’s immigrants contributed 75 percent of the city’s growth in labor force participants between 2000 and 2007. Over the same period, we can see an overall increase in wages and a moderate increase in unemployment (attributable to cyclical unemployment) after the labor market recovers from the recession:

It is a similar story for more recent data. Between 2016 and 2017 the U.S. Census revealed that Philadelphia added to the amount of immigrants living here by 31 percent. Were the wages or jobs argument correct, we should see an increase in unemployment and decrease in wages. Once again, however, this is not borne out by the data, and instead the opposite occurs:

Simply put: immigrants help the local economy.

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There are other arguments for and against immigration beyond that of economics. Though other research points to similar conclusions about the effect of immigration on communities (for example, immigrants have lower rates of law breaking, high rates of assimilation, and contribute more to social welfare programs than they receive back), an honest assessment of all arguments is assuredly necessary.

For immigration into America, and into a large city of brotherly love, gets to the heart of how we collectively define our shared identity. Nonetheless, let us countenance economic arguments against immigration no further: immigrants help the economy, and therefore help us all.

Justin Harbour teaches Advanced Placement economics at La Salle College High School. He lives in Mt. Airy with his wife and two children.

Photo: Frank Roche via Flickr

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