Immigration is also a discretionary policy of the federal government. However, at the bottom end of the labor market this is much less likely to be true. It is a worker’s occupation and not his skill level per se that makes him vulnerable to immigrant competition. Also, there is no assumption that any immigrant increase in the supply of labor automatically reduces wages. The relationship between immigrants and wages is more complex than that represented by the first model in Table 1. For example, newly arrived immigrants who take jobs in light manufacturing in a high-immigrant city like Los Angeles come into direct and immediate competition with natives doing the same work in a low-immigrant city like Pittsburgh. Introduction and Background The United States has a long history of immigration debate. Since low-skilled natives are employed in occupations that are on average 10.6 percent immigrant, this translates into a reduction in hourly wages of 6.7 percent for this category of worker. Since the research indicates that the negative effect of immigration on wages is confined to those at the bottom of the labor market, the most effective response would be one that increases the overall size of the credit, as opposed to increasing the number of persons covered by the program. If we examine hourly wages we find a pattern similar to the one found in Table 1. Studies done in the 1980s and early 1990s, which compared cities with different proportions of immigrants, generally found little effect from immigration. Finally, the mobility of capital also should play some role in preserving labor-market equilibrium in wages between cities. The expansion of asylum grounds to groups not originally intended is likely to undermine public support for this small but needed category of admission. This study seeks to answer the question: Does immigration reduce the wages of low-skilled natives? In Wyoming, which tops the list, a household led by someone born in the U.S. would have a median annual income of $59,689 compared to just $40,145 for a household headed by an immigrant. This means that in higher-skilled occupations immigrant labor may be more easily absorbed into an ever-expanding pool of jobs, while in low-skilled occupations immigrants and natives are competing for an ever-dwindling supply of low-skill jobs. However, the correlation for weekly wages and percent-immigrant found in Table A.1 is only -.22 and for hourly wages it is only -.20.16 This indicates that immigrants are spread throughout the work force and are not simply concentrated in low-wage jobs. Table A.1 in the Appendix provides descriptive statistics for all the variables in the equation. To do nothing is neither wise nor fair. It would take a significant wage differential between the U.S. and their home country to lure immigrant professionals to this country. Each of these possibilities is explored below. The wage consequences of immigration are then calculated based on an existing body of literature that has examined the wage effects of changes in the ratio of skilled to unskilled workers. Second, only about 7 percent of the workers in the top one-third most-skilled occupations are immigrants. Therefore, the movement of labor, capital and goods between cities in the United States spreads the effects of immigration from the areas with large immigrant populations to the rest of the country. Therefore, no one occupation could have undue influence on the outcome. The results are very similar if native-born blacks and Hispanics are treated separately. Each metropolitan area is treated as a discrete labor market so that comparisons can be made in unemployment, wages, or work force participation. In sum, the mobility of labor, goods, and capital makes it very difficult to determine the impact of immigration by comparing cities. However, these studies have been widely criticized because they are based on the assumption that the labor market effects of immigration are confined to those cities where immigrants reside. In addition to interactive effects, there are other reasons to believe that immigration may more adversely affect minorities than whites. As has already been pointed out, lower wages may lead to better returns on investment and lower prices for consumers.32 If these gains are thought to outweigh the losses to the poor, we could attempt to redistribute some of the benefits to those harmed by immigration. The corresponding figure for whites is 49 percent. Without work permits, they face reduced access to jobs, which discourages them from investing in human capital. Correspondingly, the smaller proportion of the native-born whites employed in low-skilled occupations allows a greater percentage of them to avoid the negative consequences of immigration. Nevertheless, whatever the reason for this distribution, the arrival of large numbers of immigrants who find employment at the bottom of the labor market must have a greater impact on America’s native-born minorities than on native-born whites. While the results of the interactive regression in Table 4 indicate that there is no added effect for being minority and in competition with immigrants, the findings do indicate that the effects of immigration on wages is the same for minorities and whites alike. In statistical terms, the percentimmigrant variable may have a different slope for minorities than for the rest of the population. If we wish to do something about the wage effects of immigration, there are two possible sets of policy options that could be pursued. This study focuses only on the narrow question of wages because they are arguably one of the most important factors affecting the quality of life in the United States. The Latino National Political Survey found that 66 percent of Cuban Americans and 75 percent of Mexican-Americans agreed or strongly agreed with the statement that there are too many immigrants in the United States. They have to assume (based on previous research) the size of the impact on wages from any shift in the supply of unskilled labor relative to other skill categories. Since a larger proportion of minorities are employed in low-skilled occupations, a larger proportion of the native-born minority population is adversely affected by immigration. They are, in effect, pushed into the U.S. by conditions at home. The high range for the occupational education variable is 4.9. Thus, it is reasonable to assume that the slope for immigrants is the same as the slope for native-born workers. However, research that has attempted to measure such effects empirically has often come to contrary and conflicting conclusions. The rise in median wages is the good news. These assumptions are wrong – as discussed below, the FLSA applies to immigrants, both legal and illegal, just as it does to U.S. citizens, and immigrants can and do successfully sue their employers for underpayment. However, it can reduce the flow of low-skilled immigrants into the United States. The consequences of immigration for America’s minority population are particularly important because minorities, especially low-skilled minorities, continue to have an especially difficult time in the labor market. It is very likely that these factors provide most of the explanation for the lower wages of immigrants. Additionally, the proportion of the work force employed in occupations that require few years of schooling has fallen in every decade in the postwar period. As a recently released study by the National Academy of Sciences on immigration concludes: “Local labor markets in the United States are certainly not completely closed economies. Looking at all natives in the work force, the results indicate that a one percent increase in the immigrant composition of an individual’s occupation reduces the weekly wages of natives in the same occupation by about .5 percent. Since these occupations are on average 15 percent immigrant, this suggests that immigration may reduce the wages of the average native in a low-skilled occupation by perhaps 12 percent compared to a worker with the same individual and occupational attributes except with no immigrants in his occupation.14 This comes to $36.84 a week for a group of workers that made only $307 a week in 1991. This same pattern exists when only native-born workers with a high school degree or less are examined. The fact that minorities in low-skilled occupations make less on average than whites is not the only reason that the impact of immigration falls more heavily on the nonwhite native-born population. It is possible that immigrants employed outside of low-skilled occupations have also increased demand for low-skilled native labor. These cross-sectional spatial studies treated each city as a discrete labor market so that comparisons could be made between areas with differing levels of immigration. At least one of the workers was said to have worked 122 hours in a week. Borjas, Freeman and Katz’s study of the 1980s found that immigrants held down wages for only highschool dropouts. The fact that in higher-skilled occupations immigrants do not depress wages and may increase them indicates that it is not enough simply to be lowskilled. The sum of this figure and the immigrant variable is -.008. The economic progress of this large component of the U.S. population is clearly important to the future success of the United States. By using certain statistical methods it is possible to examine the possibility that there are added effects from immigrant competition on native-born minorities. There are approximately 4 million people qualified for immigration to the United States but who are waiting their turn to receive the limited number of visas available each year in the various family categories. Furthermore, if those natives harmed by immigration leave highimmigrant areas to avoid competition with immigrants, then this too may mask the effect of immigrants on wages or employment on the city level. Our results show that lack of legal status lowers the productivity and wages of undocumented workers. More importantly, the United States does not currently have, nor is it likely to have in the near future, a means of reallocating the potential benefits of immigration to those made poorer by it. And, because the study does not seek to examine change over time, it is less likely to suffer from omitted variables that may have influenced the wage structure, such as technological change, over the last 25 years. Since roughly 10 percent of the labor force is composed of immigrants, these findings suggest that immigration may reduce the wages of the average native-born worker by perhaps 5 percent. This new research provides important evidence that immigration lowers wages for those at the bottom of the labor market. First, a national computerized system that allows employers to verify that persons are legally entitled to work in the United States needs to be implemented. It is possible that immigrants can avoid occupations where immigrants are highly concentrated by using a network of family and friends that inform them of the best job opportunities available. Finally, the adjusted wage of undocumented workers rose rapidly in the past decade. In contrast, immigrants constitute only 11 of those who have completed four or more years of college. There are a number of reasons for this emphasis. In addition to reducing the flow of low-skilled legal immigrants, more resources should be devoted to controlling illegal immigration. Indeed, Jencks himself seems to think employers may be correct in their assessment of young blacks (cited in Mead, 1992, 108). It is argued that because a minimum wage is not protected under illegal immigrant rights, these low level jobs are handed to illegal immigrants who are willing to get a flat pay of as little as $2 per hour, on average. Because the dependent variable is the log of weekly wages, the coefficients can be interpreted as simple percentages. The second reason for considering the particular effect of immigration on native-born minority workers is that they tend to make less on average than their white counterparts. The reason for the difference between the separate regressions and the interactive regression may be due to the fact that the minority variable is interacting with variables other than the percent-immigrant variable in the full model. Since nativeborn workers are in occupations that are 9.5 percent immigrant on average, these findings suggest that immigration may reduce the wages of the typical worker by perhaps 4.9 percent. The measured impact of immigration on the … Both of these studies indicate that immigration seems to be driving down wages for those at the bottom of the economic scale, thereby increasing the gap between rich and poor. The fact that native-born Hispanics tend to live in high-immigrant areas also makes it very likely that they are in direct competition with immigrants. A z-score can be calculated to determine if the difference in the proportion of whites and minorities in low-skilled occupations is statistically significant. by Therefore, a second regression is performed using the same variables as in the first, with the addition of an interactive term that is the product of average occupational education and the percentage of immigrants in the occupation. The coefficients for the interactive model found in the second column of Table 2 indicates that, as was the case with weekly wages, the effect of immigration varies across occupations, with the negative effect being confined to lower-skilled occupations and workers. So far little attention has been devoted to the demographic characteristics of those employed in the negatively affected occupations. Can Employment-Focused Programs Reduce Reincarceration Rates? This means that if the variables in the analysis fail to tap those “occupational” level effects that have a downward effect on wages, then the possibility exists that the findings with regard to the immigrant variable in lower-skilled occupations are confounded by these untapped effects. Some studies have also examined the specific effects of immigration on native-born minorities. The findings of empirical studies that have examined the impact of immigration on the wages of natives have varied in their results, with older studies showing little or no evidence that immigrants affect wages. Third, the system for tracking vistors from abroad must be improved, since visa overstayers account for 40 percent of illegal immigration. In the sample, 36 percent of native-born blacks, 29.7 percent of native-born Hispanics and 29.5 percent of other minorities27 are employed in low-skilled occupations. Early research done by Butcher and Altonji and Card (1991), Card (1990), Borjas (1983, 1984), Bean, Lowell and Taylor (1988), Muller and Espenshade (1985) and DeFreitas and Adriana Marshall (1983) concluded that immigration does not have a significant negative impact on the labor market performance of natives. Throughout American history laborers have moved to different parts of the country to better their job prospects (Brownlee 1979, 85-90, 118-119). Most of the research on the migration of blacks from the South in the early part of this century has emphasized the importance of labor market conditions in the North as the primary factor contributing to migration (Fligstein 1981; Johnson and Campbell 1981). Term is.018 of immigrants in each metropolitan area unlawful to employ illegal.! Not statistically significant at the groups separately avoids this problem interactive model unlikely to possess skills. 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