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Immigration Debate Highlights Role of Low-skill Workers in U.S.

March 31, 2006 at 12:00 AM EDT
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RAY SUAREZ: Now, the impact on jobs. As part of his push for legislation, the president has often made the case that illegal immigrants are filling an important gap in the American job market and economy. He talked about that idea today during a news conference at the summit in Cancun, Mexico.

GEORGE W. BUSH: An important part of securing the border and enforcing our laws is to recognize there are people in our country doing work that Americans will not do, and those people ought to be given a chance to have a tamper-proof card that enables them to work in our country legally for a period of time.

RAY SUAREZ: So is it true? Are there jobs that Americans aren’t willing to take?

We get two perspectives now. Dean Baker is an economist and co-director of the Center for Economic and Policy Research. And Daniel Griswold studies trade and immigration at the Cato Institute.

Dean Baker, it’s a commonplace in President Bush’s speeches that illegal immigrants take jobs Americans will not do; is it true?

DEAN BAKER: Well, you have to add one more clause to that: at the wages that are being offered. If you look at the situation of less-skilled workers, workers with just a high school education, particularly those who are high school dropouts, their wages have gone nowhere over the last quarter-century.

And part of that story is because they have to compete with immigrants coming in who are willing to accept those jobs at much, much lower wages. A lot of people may not be willing to take jobs at the minimum wage or a little bit above, but they would certainly be willing to take the jobs in the meat-processing factories, in restaurants, you know, go down the list of occupations where we see a lot of immigrant labors.

If those jobs offered $15, $20 an hour and paid health care, you would have lots of native-born workers who are very happy to take those jobs. So the story has been that we’ve seen the wages depressed in a large number of jobs, so, yes, native-born workers aren’t willing to take those jobs anymore. But we have to get the wages up; that’s the key.

RAY SUAREZ: Dan Griswold, is the president right that illegal immigrants are taking jobs that Americans will not do?

DANIEL GRISWOLD, Cato Institute: The president is right. And companies just can’t raise wages willy-nilly; they’re restrained ultimately by what customers are willing to pay on the other end. If wages go up, customers will turn away from the higher prices, and those industries will shrink.

There’s two fundamental forces, long-term forces driving low-skilled immigration. One is continued demand in the U.S. economy for lower skilled workers.

We’re creating hundreds of thousands of low-skilled jobs. We’re creating more better paying jobs, but low-skilled jobs in the restaurant industry, the hotel, motel industry, agriculture, construction, at a time when the supply of Americans willing and happy to take those jobs continues to shrink.

Basically, Americans without high school educations are the ones competing against these workers, and they’ve been declining as a share. Believe it or not, 40 years ago, half of adult Americans in the workforce did not have a high school degree. Today, that’s 10 percent and dropping. There’s 1 million fewer of those workers today than even five years ago.

You know, where is the line of Americans waiting to pick lettuce in the noonday sun all day or to scrub toilets all night at a discount store? They’re just not there. This is honorable work, but it’s hard work. And I think we should allow immigrants to come in and take those jobs that Americans simply don’t want.

RAY SUAREZ: Dean Baker mentioned meat and poultry plants. You yourself brought up construction. There’s also landscaping, as you mentioned, hotel and motel. A lot of these jobs are jobs that, before this large-scale immigration, paid not fabulously well, but paid well enough to raise a family, were often protected by collective bargaining agreements.

Do you agree with Dean Baker’s point that these jobs pay less in part because these illegal workers are here?

DANIEL GRISWOLD: I think that’s a small part of it. They pay less because we’re becoming a sophisticated, high-tech economy that increasingly rewards education and job skills.

And if you are an adult American without a high school degree, and you’re trying to make it in this economy, you’re going to be getting it from all sides, primarily from technology. You just don’t have the skills.

And the other thing is those are unpleasant jobs. You know, working in a meat-packing factory, sitting out on a roof in northern Georgia all day pounding shingles, that’s unpleasant work.

And increasingly, Americans are becoming better educated. We have better options with our time. This other work is honorable, but the pool of Americans who can take those jobs is just shrinking, and the immigrants are coming in and basically filling the vacuum being left by Americans moving up the skill ladder.

RAY SUAREZ: How do you respond to just that point?

DEAN BAKER: Well, if Dan were right about that, we should be seeing the wages of Americans, including those with less skill, rising. We’re not seeing that.

This is very peculiar. Ordinarily, economists think that, if you get more of a supply, it reduces the price of that. You know, we think that about oil; we think that about grain. But Dan seems to think that isn’t the case with less-skilled worker.

Let me also point out, you know, we’re talking about putting those most disadvantaged in this society — high school dropouts, disproportionately African-Americans — we’re putting them in competition with people from developing countries willing to work at very low wages.

We don’t put ourselves in that competition. Let me pick on a very high-skilled group. Doctors in 1997 were upset. They said too many foreign doctors were coming into the country and they were depressing their wages, and they ran to Congress and they said, “We need protection.”

And guess what? They got it. And they cut the number of foreign doctors that come into the country each year in half, and as a result they’ve been better positioned to sustain their wages.

So what we have here is a situation where there’s protection for those of us sitting around the table, those at the high end. It’s very difficult, not because there aren’t smart people there, but it’s very difficult to get through the licensing requirements, to get here and practice law, practice medicine, practice economics, if you come from India, Mexico, wherever it might be. Less-skilled workers can just walk right in and compete.

RAY SUAREZ: Well, extend that argument down the workforce. One of the options that had been discussed — you heard Roberto Suro mention it a moment ago — by both legislators and people in public opinion research is: Send them home. If we were able to do that, would work at the bottom, these kinds of jobs that you’ve both been talking about, automatically pay more?

DEAN BAKER: Well, let me just say at the outset sending them home is barbaric. I mean, these people have been here. Everyone knows they’ve been there. You know, it’s not a secret. It’s like, you know, “Casablanca,” shock, shock.

You can’t send these people home. They work. They contribute to the country. So you can’t send people that have been working here home.

Now, if you say, are we going to curtail the flow? Yes, the wages will rise. That’s exactly what the employers are telling us. They can’t get the workers. What does that mean?

RAY SUAREZ: No, but you just made an argument about scarcity, and if we created scarcity…

DEAN BAKER: Wages would rise.

RAY SUAREZ: … wages would rise.

DEAN BAKER: Yes.

DANIEL GRISWOLD: So would prices. And demand would fall off, and these industries would shrink.

Look, it’s easier for a high-skilled worker to get into the United States than a low-skilled worker if you don’t have family connections. We have five H-1B workers at Cato, so I could be replaced by a foreign worker.

But if you’re on the lower end of the scale — and, really, the only group of Americans that competes really directly with these workers are Americans without a high school degree — the answer is not to restrict immigration.

The market is sending a very large, loud signal to Americans: If you’re in school, if you’re a young American in school, stay in school. Get your degree. You get a premium for having your degree. Better yet, go on to college and get some skills there.

If you’re an older American without a high school degree, go back and get your degree, upgrade your skills. Let’s not artificially restrict immigration to the United States. We can all win. This is not a zero-sum economy.

Americans can move up the scale ladder, increase their pay, and we can also offer opportunities for immigrants, hard-working, peaceful immigrants from Mexico and other countries.

RAY SUAREZ: Well, Dan Griswold, you have agreed with President Bush’s premise that these are jobs that Americans won’t do. One of the options available, both in the legislation and to the public, is to put these people on the road to becoming Americans.

Once they regularize their status or become citizens, will they not want to do these jobs either?

DANIEL GRISWOLD: You know, we legalized 2.6 million people in the 1980s. And what we learned from that experience — we shouldn’t do it exactly that way. We should do it differently.

But what we learned is, when they became legal, their wages immediately went up; they invested more in their job and their language skills, because they could plan for the future. And so I think you would see immigrants moving up.

And then we can have other immigrants come in and take the lower skilled jobs. This is the American experience. It’s a kind of escalator where people move up.

You know, 100 years ago, we had millions of immigrants from Europe, the huddled masses. They filled these jobs. What did Americans do? They stayed in school. We had the high school movement. They upgraded their skills, and everybody got on this upward escalator. That’s the American way.

RAY SUAREZ: Dean Baker, if the people who are currently here illegally and working were allowed to stay, would that escalator effect, as Daniel Griswold suggests, work for them?

DEAN BAKER: Absolutely, it has been working and will work. I mean, the big issue is: Who are the flow of new immigrants and how large are they?

Again, Dan wants to restrict that to the people at the bottom and maintain protection for those at the top.

DANIEL GRISWOLD: I do not.

DEAN BAKER: I want to open the door for those at the top to make it as easy for doctors, for lawyers, for accountants, for economists to come in and compete with people like us and drive down our wages…

DANIEL GRISWOLD: So do I.

DEAN BAKER: … which will have enormous benefits for the country as a whole. It won’t be very good for us, maybe, but it’ll be enormous benefits for the country as a whole. And I’d say, let’s start with the competition at the top, rather than making those who are most disadvantaged already in society have to compete.

RAY SUAREZ: Well, a third of all the illegal labor in the country is in just three large metropolitan areas: New York, Chicago, Los Angeles. But is this, in effect, the effect that you suggest that these illegal workers are having on wages, something that’s being felt all around the country?

DEAN BAKER: Well, it certainly is felt — I mean, it depends on the place. I would say it is felt all around the country, because obviously people move from place to place.

So what you might imagine, if you had fewer immigrants in these areas, you’d have more domestic migration, you know, people coming from areas that aren’t otherwise creating jobs moving to Los Angeles, New York, and Chicago.

Now, of course, immigrants do help those economies. Of course they do. You know, the fact that you could hire workers at very low wages, that is a boost to the economy, but it is certainly a disadvantage to those people who otherwise would be competing with immigrants.

And it’s just absurd to say we don’t have people competing with immigrants. I mean, if you look at the experience of those without high school degrees and people with high school degrees, which is still the vast majority of the workforce, it has been very, very bad the last 30 years, and immigration is at least part of the story, not the whole story, but a part of it.

RAY SUAREZ: Well, you say that they’re competing with the lowest skilled Americans, but that is four million high school or less Americans who are unemployed or underemployed. Wouldn’t they get some of the jobs, as Dean Baker suggests?

DANIEL GRISWOLD: They would, but I think what you’d see happen is U.S. companies literally could not find the workers they need. They would be priced out of the market. They can’t raise wages without taking into consideration what consumers will pay.

The wages are low in those industries because productivity is low and there’s only so much people will pay. You know, if the cost of going out to a restaurant goes up, buying a new home, having cleaning and janitorial services goes up, we’ll have less purchasing of those services. Those industries will contract.

It’ll be one more reason for the textile and carpet industries to move offshore, and that will cause job dislocations for middle-class Americans in management, and sales, and accounting in those industries.

We can all benefit if we have more open immigration on the top end of the skill scale and the bottom end. We’ve argued consistently at Cato for that.

RAY SUAREZ: Dan Griswold, Dean Baker, gentlemen, thank you, both.