A rise in the number and types of immigrant workers has benefits for high- and low-earning residents.
San Antonio, Texas. Gainesville, Florida. Gainesville, Georgia. These three metros have one thing in common: Between 1990 and 2011, each saw a significant expansion of its foreign-born population. If critics of immigration are to be believed, the native-born residents of these metros—especially the “the least-educated and poorest” ones—would have felt a pinch when these new arrivals squeezed into their corner of the job market. Perhaps some did. But overall, the data show a different picture.
In San Antonio, residents across the income spectrum saw their wages rise between 16 and 25 percent over this period. In Gainesville, Georgia, the lowest earners saw a 20 percent increase in wages, and the highest ones experienced a 45 percent increase. In its namesake in Florida, that range was 9 to 35 percent.
While there were other factors at play, the diversity explosion, both at the lower and higher ends of the income spectrum in these metros, had a huge role in making all native workers a little bit richer. That’s according to a new study by the Partnership for a New American Economy, an organization led by a bipartisan group of political and business leaders that advocates for immigration reform. From the paper:
When diversity increases through immigration, meaningful wage benefits accrue to all workers—from the highest earners down to the lowest.
Here, diversity is defined as the likelihood that two people in a metropolitan area, when selected randomly, turn out to be from different countries—a description that takes into account not only an increase in the numbers of foreign-born workers, but also their nationalities. To measure it, the authors, Thomas Kemeny, a lecturer in human geography at the University of Southampton in the U.K., and Abigail Cooke, an assistant professor of geography at the University at Buffalo, devised a scale from 0 to 1. The closer a metro’s score was to 1, the more diverse it was. And when a metro experienced a “diversity boost,” its diversity rose by the equivalent of a standard deviation (0.13 on the scale).
The researchers then applied this framework to a U.S. Census Bureau dataset that let them track how the wages of individual workers in 160 U.S. metros changed from 1991 to 2008. Here are the metros with the highest jumps in diversity during this time:
When a metro diversified, the typical worker (whether immigrant or native-born) saw a 6 percent rise in wages. That benefit varied depending on where the worker was on the income spectrum. The top 25 percent of all the earners saw a 6.6 percent jump in wages, on average, and the bottom quartile, a 7.1 percent increase.
In other words, everyone was slightly better off when more immigrants flocked to the city. Per the report:
These findings run counter to what many immigration critics say about foreign-born workers. Rather than harm the wages of U.S. workers, immigrant diversity appears to have widespread benefits across the labor force.
Here’s a graph showing the distribution of diversity benefits across income spectrums in the average metro:
In political discourse, immigrants are often lumped into two categories: the “high-skilled” ones are deemed “good,” and the low-wage earners—who are often undocumented—are regarded as the “the bad ones.” Of course, immigrants are people, and therefore more than the sum total of their economic contributions. But that binary characterization falls apart even if their value is evaluated solely on this basis.
This study examines the impact of diversity boosts at both ends of the income spectrum. In the average metro, if a boost occurred among the top 25 percent of earners—that is, if more high-skilled, high-earning immigrant workers poured in—the average high-earning worker experienced a dramatic 18 percent wage increase. The bottom 25 percent of workers saw a 16 percent improvement. That’s consistent with some previous research showing that high-skilled immigrants innovate and start businesses, creating more space for native workers to grow.
Here’s what the benefits from the boom in high-earning immigrants looks like for different income brackets:
If the diversity increase occurred in the bottom half of the income spectrum, the typical worker was still better off, although by a much smaller degree (1.6 percent). That impact was driven by the benefits reaped by the lowest quartile of workers in the metro, who gained 2.1 percent in wages, on average:
Even if this demographic change took place only in the bottom 25 percent, no harm was detected. Some gains were seen for those in the same workplace as these newcomers.
At various points in history, the perception that immigrants steal American jobs and depress wages has been so widespread and potent that it has moved federal policy and carried presidential candidates to victory. In certain specific contexts, these allegations might well be true. But what this study and other recent research has shown is that more often than not, this characterization of immigrants is based on a rigid and simplistic assumption about how the labor force works. Ultimately, scapegoating immigrants is a means to more political gains for some than economic gains for all.