Study Shows No Evidence for 'Substitutability' of U.S. Workers for Immigrants

chong-uk kimA new study from Sonoma State University shows no evidence for immigrants displacing American citizens in the workforce. "Empirically, I don't see any evidence that immigrants are going to take our jobs or decrease our wages," says Sonoma State Economics Professor Chong-Uk Kim.

Kim's study, "Immigration and domestic wage: An empirical study on competition among immigrants," was published in November 2016 in the Journal of Applied Economics. It is based on data from the Current Population Survey, a monthly review of 60,000 U.S. households conducted by the United States Census Bureau.

His research shows not only is there no evidence for immigrant labor hurting the economy, but that more immigrant labor actually results in a modest increase (of less than $35 on average) in annual income for both citizens and non-citizens. The U.S. unemployment rate in November 2016 was 4.6 percent, the lowest it's been since July 2007.

There are two perspectives on immigration, says Kim, which are substitution and compliment. "Substitution means you come, you take my job, you're going to hurt my wage. Compliment means you come, we work together, and we make it better so everyone gets a higher wage."

The study, published with co-author Gieyoung Lim of the Department of International Economics and Law at Hankuk University of Foreign Studies in Seoul, South Korea, says, "We find no empirical evidence supporting the substitutability of native workers for immigrants."

Kim says immigrants would not come to the United States if there were no demand for their labor. "They're coming here because we have work for them," he says. "They're not taking our jobs, they're taking the jobs we don't do anymore."

This phenomenon--and its backlash--is not a new one. "A hundred years ago, the same thing happened with Italian and Irish immigrants. Now it's happening to the Hispanic population," says Kim.

Despite this data-driven conclusion, economists are split evenly on the topic. "It's still a very hot issue," says Kim. "There are a lot of people working on this issue, papers are published almost every day with new evidence."

One thing for certain, he says, is the haste with which the Trump administration has been acting on this issue is ill-advised. "The new administration is making decisions so quickly based on only one perspective, and that's very risky," says Kim. "There's really no one unique solution for this topic."

The study also shows "no statistical difference between skilled and unskilled immigrants on the influence of domestic labor market outcomes," meaning the same impact comes from software engineers in Silicon Valley as farmworkers in the Central Valley.

The third key point found in the study is that there is "no internal competition among immigrants. The income of non-citizen workers mainly depends on state and national levels of economic situations, not the number of non-citizen workers available in the labor market."

This new information, says Kim, is related to his research from graduate school. "I heard this many times from the Hispanic population, the Asian population, that they feared if more immigrants come to this country, they're not going to compete with American citizens, they're going to compete with them."

There was little research in this area, so Kim decided to look into it. "What I found was that immigrant wages depends on the U.S. economic situation, not other immigrants," he says.

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