Reducing Immigration Will Create Economic Space for American Workers

Sensible immigration reform can pave the way for aligning economic “Made in America” production goals with assurances that those newly-created U.S.-based jobs would also prioritize a domestic American workforce.

Now is a golden opportunity for Congress to reform immigration policy that would enhance the potential “boon” to workers predicted by several analysts who are cautiously encouraged by employment incentives included in the recently-passed CHIPS and Inflation Reduction Acts in Congress.

The boon to U.S. workers will be substantial even without large increases in mining. Jobs at LG Energy Solution’s new battery plant in Michigan are expected to average $65,000 a year, while jobs with Intel’s planned Ohio semiconductor plant will average $135,000 a year. Many of those will surely be taken by college-educated workers, but that will also have positive ripple effects for workers without college degrees in the surrounding communities.”

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Now is an important time to think logically and strategically about the economic implications of continuing to admit millions of legal and illegal foreign workers into the U.S. labor market annually. Once admitted, whether on pseudo-“temporary” or expedited permanent status, foreign workers naturally will compete with native-born and legal permanent resident immigrants already here for these new jobs.

Why does this matter?

Job and wage competition from foreign workers:

1. increases labor demand at the same time that the human-filled jobs supply is decreasing. Whereas many of these positions are now being filled by automation, the pool of available jobs in both highly-skilled and lower skilled job sectors is shrinking.

Certainly foreign labor’s impact on the availability of jobs varies among employment sectors, both numerically and geographically. But studies show for example, that “each additional robot added in manufacturing replaced 3.3 workers nationally on average. The increased use of robots in the workplace also lowered wages by 0.4 percent during the same period” (1990-2007.)

2. exacerbates the challenge of changing conditions where today’s manufacturing, services and other job sectors increasingly require skill sets and education beyond what the high school diploma previously satisfied as sufficient qualifications in prior decades. There are proposals put forth to address the expected training gaps for this era of transition. Regardless of one’s views on how to address the challenges of college degree surpluses and skills gaps, the question is, will employers invest first in hiring American workers? Or will they rush to fill these positions with foreign workers whose visas the employer controls, and whose wages and benefits employers can either set below market value or deny through the often too convenient loophole of contractual work ?

3. puts unnecessary additional pressures on an existing domestic surplus of college-educated job seekers, many of whom are already unable to find good-paying jobs within their chosen career paths. Pressure from foreign worker competition also further erodes prospects for high school graduates. These workers, often unable to afford the high tuition costs of a college education, can no longer rely on an undergraduate degree to guarantee one’s ascendancy into a middle-to-upper middle income lifestyle.

Addressing the first two issues above, Catherine Rampell of the Washington Post, makes a compelling, albeit likely unintended, argument in favor of reducing immigration.

Why belabor this labor history? It’s to show that it is risky to count on a supposed manufacturing comeback to power a jobs boom in the years ahead. Building more physical “things” in this country does not guarantee huge job growth, much less “bottom-up” job growth.

That’s true even if we invest in manufacturing the technologies of “the future,” as Biden frames it. In fact, as the country transitions to electric vehicles, employment in the U.S. auto manufacturing industry is likely to shrink — even if that EV manufacturing happens here in the United States. That’s because electric cars, having fewer parts than conventional vehicles, will ultimately require less labor to produce.”

She concludes:

But the solution is not to promise to revive some halcyon manufacturing-centric labor market that will never return. It’s to automate as much of the unpleasant, poorly-paid work as possible, or at least make it more humane; and get more U.S. workers trained for better, high-paying jobs — whatever sector they’re in.”

If asked, there are likely few people who would not agree with some turn-over of “unpleasant” or “poorly-paid” jobs to automation. But for those fewer, yet essential remaining jobs still requiring human hands, especially the least desirable “unpleasant”ones, the passing of mandatory E-Verify and reductions in legal immigration could have a positive impact to alleviate the saturation point of total workers (foreign and domestic) seeking the same jobs.

And for those who still drink the Kool-Aid that Americans won’t do those jobs? Let’s see how this belief would hold up to offers of higher wages and benefits reflective of a labor market that truly values the fruits of an American labor pool tight enough to restore equilibrium to the employer-employee bargaining table. Prior to the pandemic downturn, “There were 5.8 million people unemployed in the fourth quarter of 2019, down 341,000 from a year earlier, and the jobless rate declined to 3.5 percent, the lowest rate in 50 years.” Could a brief slowdown in immigration have been one factor among others that helped to improve the employment options for domestic workers?

Immigration policy can, and should be welcoming to a reasonable number of new residents. But “reasonable” must first involve setting policy to ensure adequate economic space for its domestic workforce. It is only when these needs are met that a country can arrive at setting necessary, sensible and rational limits to the number of immigrants permitted to enter legally, and determined in relationship to impact on domestic employment conditions.

This is an optimal time for bipartisan, common sense immigration reforms aimed at supporting a more equitable and fair employment environment for both American workers and immigrants. Just as some of the bipartisan bills passed so far by this 117th Congress will create new jobs, so too should a “Build Back Better” plan be a bipartisan effort that includes sensible immigration reductions to also build back smarter.

CHRISTY SHAW is the Member Services Manager for NumbersUSA