NEWS ANALYSIS : Studies Challenge View That Immigrants Harm Economy

Despite Gov. Pete Wilson’s call this week for new restrictions on illegal immigration, a growing body of research challenges the popularly held view that immigrants are damaging California’s much-battered economy.

Wilson’s open letter to President Clinton endorsed the view that illegal immigrants steal jobs from natives, lower wages for everyone and fill jails, schools and hospitals while paying no taxes.

Clearly, the costs of immigration--in social services, education and health care--fall most heavily on areas such as California, which absorb the bulk of the immigrants. And the net impact of immigration is so difficult to calculate that data can be marshaled to support diametrically opposed views.

Nevertheless, some research shows that immigration can stimulate a region’s economy and create jobs.

Moreover, a number of studies--from Princeton University, RAND, the Urban Institute and elsewhere--find little evidence to support the argument that immigrants take jobs from native-born workers in general, although there are exceptions in specific occupations.

Studies also fail to support the notion that immigrants lower wages for native-born workers.

In all, the findings confirm the traditional belief that immigration over the long term is a positive force that helps drive the state and nation’s growth.

“The studies that looked for displacement (of American workers) generally don’t find it,” said Jeff Passel, director of the program for research on immigration policy at the Urban Institute in Washington. “They find that immigrants complement native workers rather than substitute for native workers.”

One study by the Urban Institute found that foreign immigrants, legal and illegal, helped create more jobs in urban areas than the native population did. The reason, the author said, may have to do with the drive and motivation that prompts people to immigrate in the first place.

“For every increase of 100 people in the native population, employment grew by 26 jobs,” said Maria Enchautegui, a research associate at the institute and the study’s author. “For every increase of 100 in the immigrant population, employment grew by 46 jobs.” The effects are more pronounced in non-manufacturing jobs, she said.

Other studies support the image of the job-creating immigrant entrepreneur. A 1991 survey by the Federal Reserve Bank of New York found that immigrant self-employment rates were at least 7% higher than the rate among native residents.

Of course, not everyone agrees with these findings.

Some researchers argue that the newest wave of immigrants differs markedly from previous generations: They are younger, less skilled, less educated and less able to integrate themselves into society.

The most notable study arguing that immigrants take jobs from natives was conducted by Rice University economics professor Donald Huddle. One low-skilled native worker was displaced, he concluded, for every four immigrants who enter the country.

Extrapolating from that figure, Huddle estimated that immigrants displaced 1.06 million such workers in 1992, at a cost of $6.1 billion to public assistance programs.

Huddle’s study has been widely quoted by supporters of restricted immigration. But it also has drawn fire from academics critical of its assumptions. Among other things, critics have said Huddle’s conclusion was based on visits by researchers to Houston construction sites, where Latino workers were presumed to be immigrants and to have displaced native workers.

Other research reaches conflicting conclusions about whether immigrants consume more in public services than they contribute in taxes.

A state survey of San Diego County concluded that illegal immigrants contributed $60 million in taxes while costing the county $206 million in state and local services, a net drain of $146 million.

Based on those numbers, California’s auditor general estimated that the net cost of illegals to California at $3 billion--a number quoted by the Federation for American Immigration Reform, among other pro-restriction groups.

Nationally, Huddle’s study concluded that legal immigrants consumed $19.5 billion more in services than they paid in taxes.

But those studies have drawn sharp criticism.

The chief complaints: They ignore the economic role of long-term immigrants, overstate the number of illegal immigrants, overestimate the amount of services such immigrants consume and understate the amount of taxes they pay.

“There is every reason to believe that long-term immigrants are at least on a par with natives in terms of costs and revenues,” said the Urban Institute’s Passel.

Other studies--including one by Los Angeles County--suggest that immigrants contribute more than they consume.

The Los Angeles County study concluded that immigrants in the county generated $4.3 billion in taxes to all levels of government in 1991 and 1992. Health, social and justice-related services provided to them, as well as to the children of illegal immigrants, amounted to $947 million, and county school districts spent another $1.5 billion. The net impact: a positive contribution of $1.85 billion.

In any case, there is general agreement that the burden of immigration falls disproportionately on states--notably California--in which the concentration of immigrants is highest. The problem for such regions is not immigration per se, but rather federal policy that fails to allocate tax dollars proportionately, economists say.

The Los Angeles County study found that of the $4.3 billion paid in taxes by immigrants, only $139.1 million went to the county. Meanwhile, the $947 million in services to those immigrants constituted nearly 31% of the county’s total costs.

“The solution isn’t to get rid of immigrants; it’s to change the policy,” said Julian L. Simon, an economist at the University of Maryland. “What you need to do is get the people from Duluth to cough up their ill-gotten gains.”

But there is anecdotal evidence that immigrants in particular occupations may displace some workers.

For years, office buildings in Los Angeles were cleaned by U.S.-born janitors of mainly African-American descent. But in the 1980s, the work force began to shift, first to Mexican-Americans, then to recent Central-American immigrants, said David Stilwell, executive vice president of the Hospital and Service Employees Union Local 399 in Los Angeles.

The result is that the number of union janitors has shrunk from 13,000 to about 8,000, and pay has fallen from a minimum wage of $7.32 an hour and full benefits to about $6.35 an hour. The balance of the jobs have been taken by non-unionized workers--many of them undocumented--who make between $4.25 and $5 an hour with few benefits, Stilwell said.

“There is always some racism and lingering feelings among the old membership that the immigrants took their jobs,” Stilwell said. “But . . . (others) see clearly that it was an attack by the industry” that led to the change, “and not a bunch of poor people coming up to feed their families.”

In health care, a shortage of skilled nurses compelled Los Angeles hospitals to recruit aggressively for immigrants in the 1980s.

Immigration reform stemmed the recruitment, and the nursing shortage abated. But the immigrants’ presence displaced few if any native-born nurses, said Virginia Rusk, a principal investigator on the Los Angeles-Orange County portion of an ongoing study by the U.S. Department of Labor. And the presence of the immigrants has had no effect on prevailing wage rates among nurses, she added.

Still unmeasured is the effect immigrants have had in reviving--or harming--particular neighborhoods; in creating new businesses, particularly in an underground economy where income goes unreported; or in subsidizing industries such as apparel making with their cheap labor.

“There is no question that there are a lot of employers who want low-wage immigrant labor,” said Angelo Ancheta, executive director of the Coalition for Humane Immigrant Rights of Los Angeles.

“These are the same employers who pay less than minimum wage . . . and those businesses are critical to the economy: agriculture, manufacturing, the garment industry,” he added. “What would the economy of Southern California look like if you didn’t have this large pool of low-wage, largely undocumented labor? . . . American workers don’t want to pick fruit and vegetables, clean up as domestic workers and work in kitchens.”