Americans have long been concerned about the impact of immigrants on job availability. In 1891, Henry Cabot Lodge, a U.S. senator, viewed foreign-born workers as a cheap labor pool that suppressed wages for native workers. However, Emma Lazarus, who wrote the famous poem “The New Colossus” inspired by the Statue of Liberty, presented a more compassionate perspective. These opposing viewpoints still shape our immigration debates today. However, recent research challenges the assumption that immigrants are job stealers or solely reliant on our charity. In fact, they are primarily job creators.
The assertion that immigrants take away jobs from native-born workers may seem logical if there is a fixed number of jobs in an area. Lodge believed this to be an obvious fact. However, Lodge and his followers overlook two key factors. Firstly, immigrants not only add to the labor supply but also increase labor demand. By participating in the local economy, immigrants generate a need for goods and services, such as housing, food, and transportation. This, in turn, creates more job opportunities for local workers. A notable study by David Card on the Mariel boatlift from Cuba to Miami in 1980 supports this idea. Despite a significant increase in the labor force due to the arrival of Cuban immigrants, there was no negative impact on wages or employment levels in Miami.
Secondly, the Lodge school fails to recognize that immigrants contribute to the economy as employers, not just workers. Immigrants establish new businesses that, in turn, create jobs. In fact, immigrants are much more likely to start businesses compared to native-born Americans. A recent study analyzing the country of origin of business founders in the United States from 2005 to 2010 reveals that immigrants are 80% more likely to start a business. These businesses vary in size, from small establishments to large corporations. Immigrant entrepreneurs have played a significant role in the success of well-known companies like Google, eBay, Yahoo, Tesla, Dow, Dupont, Merck, and Pfizer. When considering the overall impact, immigrants create more jobs as founders than they fill as workers. Furthermore, their businesses provide wages comparable to other businesses.
This pattern holds true regardless of the immigrants’ country of origin. Immigrants from OECD countries (mostly in Europe with higher income per capita) have the same entrepreneurial drive as immigrants from other regions.
One might still have concerns about regional disparities. Immigrant entrepreneurs may create jobs in specific areas while negatively impacting non-immigrant workers in other regions. To address this concern, we can examine the Mariel boatlift as a natural experiment. The unexpected influx of immigrants to Miami allowed economists to study its effects on the local labor market, compared to other unaffected cities. Drawing on the Mariel boatlift example and the Age of Mass Migration from 1850 to 1914, studies indicate that regions experiencing increased immigration also see improved economic performance. These areas exhibit increased employment, even for American-born workers in sectors that rely on immigrant labor. In the long run, regions with higher historic immigration levels have lower poverty rates, lower unemployment rates, and higher per capita income.
At the national level, the economic case for immigration extends beyond these regional impacts. The United States currently faces economic challenges such as slower productivity growth, high government debt, and an aging population. Immigrants have the potential to address these issues by expanding the workforce, driving technological progress, and fostering overall economic growth.
Both major political parties in the United States claim to support job creation and American workers. Viewing immigrants through this lens requires a fundamental shift in perspective. Progressives often emphasize that immigrants take up jobs that Americans do not want. However, it is more accurate to say that immigration increases the number of available jobs. Immigrants contribute to the economy by starting businesses, creating more opportunities for everyone.
It is not surprising that immigrants demonstrate exceptional entrepreneurship once they arrive in a new country. Their willingness to take risks, endure arduous journeys, and seek a better life showcases their energy and determination. Rather than focusing on their weariness, we should embrace immigrants as valuable contributors who can enrich our society and economy.
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