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Friday, November 11, 2005

Migrant Workers in the US

The Congressional Budget Office in the US yesterday released a report on the role of immigrant workers in the US. The thrust of the report is perhaps clearly captured in this statement:

"The United States is known as a nation of immigrants— a characterization that is more appropriate today than at any time since the 1930s. Census Bureau data for 2004 indicate that 34 million of the nation’s 288 million people — 12 percent of the U.S. population—were foreign born. That was the highest percentage of foreign-born people the Census Bureau had recorded in 70 years."

and this:

In 2004, among workers age 25 and older who lacked a diploma, nearly half were foreign born, and most were from Mexico and Central America. At the same time, many other immigrant groups were highly educated. The educational attainment of foreign-born workers from other regions was slightly higher than that of natives; in particular, a higher percentage of those immigrants had taken graduate

"A flexible labor market will adjust over time to the presence of more foreign-born workers. The U.S. economy should attract more capital as investors see opportunities to increase their returns. Increased investment, in turn, will tend to raise workers’ productivity and earnings. Ultimately, lower production costs should increase employers’ profits and lower prices for consumers. Even after such adjustments occur, however, the earnings of native workers whose education and skills are most like those of immigrants could be adversely affected by the increased competition. Over even longer time periods, some of those workers may be motivated to obtain additional education to receive the increased labor market payoffs associated with greater education."

The Ft has an article summarising the report, which draws attention to this point:

"Commonly cited statistics on earnings growth can be misleading if used as indicators of progress during a period in which an increasing share of the workforce is foreign born," the CBO said in a study of immigration and the US labour market commissioned by the Senate finance committee.