Are Low-Skilled Immigrants Good for the Economy?

According to a Reuters/Ipsos poll conducted in mid-July, 70
percent of Americans (including 86 percent of Republicans) believe
that undocumented immigrants threaten traditional U.S. beliefs and
customs, and across the country
voters are expressing their frustration with current immigration
policies at town hall meetings. Advocates of open borders and
people who want to immigrate to the U.S., of course, are calling
for a very different set of reforms. Would making it easier for
immigrants to gain legal status in the U.S. be a step in the right
direction? Allowing more high-skilled immigrants to come to the
U.S. would certainly be good for the economy. But what about
low-skilled immigrants? Last year, Reason’s Shikha Dalmia argued
that low-skilled workers are good for the economy too.

“Shikha Dalmia: 5 Reasons Why Low-Skilled Immigrants Are
Good for the Economy,” produced by Paul Detrick. Approximately 3
minutes.

Original release date was April 11, 2003, and the original
writeup is below.

The Senate’s “Gang of Eight” proposed immigration reform plan
will likely take a look at how to make it easier for high-skilled
immigrants to gain legal status in the United States. Reason
Foundation senior analyst Shikha Dalmia gives five reasons why
low-skilled immigrants are good for the economy too:

1. Americans are the Customers of Low-Skilled Immigrants

Most Americans are not competitors of low-skilled immigrants,
they are actually their customers. They buy all kinds of services
from them: House cleaning services, childcare services, landscaping
services, home construction services. If Americans can spend less
on these services, then they have more money in their pocket to
spend elsewhere, which means more jobs created elsewhere in the
economy.

2. Low-Skilled Immigrants are Mobile

Latino and other foreign workers don’t have ties to the local
community and they haven’t invested in property so they can pick up
their bags and leave at any point to wherever they are needed. They
can go to where houses are built in Arizona or pick fruit in
Florida, they can go wherever they want. They “grease the wheels”
of the labor market, as Harvard economist George Borjas has put
it.

3. Low-Skilled Immigrants are Good for Women

Low skilled immigrants increase the supply of high skilled
workers and these high-skilled workers are often called women. Many
professional women would be forced to spend much more time at home
taking care of their children, cleaning, doing laundry if it were
not for the presence of foreign nannies, Korean dry cleaners or
Chinese takeout.

4. Low-Skilled Immigrants May Cost the Welfare State Less

A big fear about low-skilled immigrants is that because they are
poor they impose a big cost on the welfare state. But the truth is
that most of them don’t even qualify for most means tests benefits
that Americans do so they may actually be saving the welfare state
money rather than costing it money. A CATO working paper from
February 19, 2013 said, “Low-income non-citizen immigrants are
generally less likely to receive public benefits than those who are
native born.”

5. Low Skilled Immigrants Create Jobs

They create more jobs for Americans because they reduce the cost
of a key import in production: labor. When labor costs go down,
more businesses can form, when more businesses can form, there are
more jobs for everyone–including Americans. The fact that there is
someone else to do menial work like pulling weeds means that
Americans can do relatively more value added work. For instance,
their English speaking skills become more marketable in a diverse
economy with lots of immigrants who don’t speak English.

Dalmia appeared last month on Capitol Hill to talk about the
importance of low skilled immigrants. If you would like to read
more articles and videos from Reason on immigration click here.

Video is about 3 min. Produced by Paul Detrick. Shot by Sharif
Matar.