Skilled Foreign Workers a Boon to Pay, Study Finds
Posted on May 28, 2014
Want a pay raise? Ask your employer to hire more immigrant scientists.
That’s the general conclusion of a study that examined wage data and immigration in 219 metropolitan areas from 1990 to 2010. Researchers found that cities seeing the biggest influx of foreign-born workers in science, technology, engineering and mathematics—the so-called STEM professions—saw wages climb fastest for the native-born, college-educated population.
The new research by three academic economists, who have done earlier research showing economic benefits of immigration, comes as U.S. lawmakers spar over revamping immigration laws, a battle animated by debate over whether foreign workers drive down native wages.
“A lot of people have the idea there is a fixed number of jobs,” said one of the authors, Giovanni Peri of the University of California, Davis. “It’s completely turned around.”
Immigrants can boost the productivity of the overall economy, he said, “because then the pie grows and there are more jobs for other people as well and there’s not a zero-sum trade-off between natives and immigrants.”
Mr. Peri, along with co-authors Kevin Shih at UC Davis, and Chad Sparber at Colgate University, studied how wages for college- and noncollege-educated native workers shifted along with immigration. They found that a one-percentage-point increase in the share of workers in STEM fields raised wages for college-educated natives by seven to eight percentage points and wages of the noncollege-educated natives by three to four percentage points.
Mr. Peri said the research bolsters the case for raising, or even removing, the caps on H-1B visas, the program that regulates how many high-skilled foreign workers employers can bring into the country. The Senate last June passed a bill that would double the allowance of H-1B visas. The current annual cap is 65,000 visas for first-time applicants and 20,000 for workers with advanced degrees. That could climb as high as 180,000 depending on economic conditions. The legislation has stalled in the House of Representatives, with lawmakers divided on a strategy for dealing with immigrants in the U.S. illegally.
Opponents of the H-1B program say that immigrants may not be needed to fill many STEM jobs and that wage gains in these fields could be stronger in the absence of immigrants.
“The argument that we have a shortage is hard to sustain when you look at how many people have STEM degrees,” said Steve Camarota, director of research for the Center for Immigration Studies, a nonprofit group that wants to reduce the flow of immigrants to the U.S. “Most people who get STEM degrees don’t get STEM jobs.”
The research attempts to isolate the cause and effect of a shift in the supply of immigrants—rather than increased demand by employers—by tallying how the number of skilled workers changed over time in each area.
The areas with the biggest influx of foreign STEM workers were Austin, Texas; Raleigh-Durham, N.C.; Huntsville, Ala.; and Seattle. The cities had inflation-adjusted wage gains of 17% to 28% for their native college-educated workers. At the other end of the spectrum, 33 cities saw a decline in foreign STEM workers and 25 of those cities saw an outright decline in wages for their college-educated populations.
The findings suggest an influx of foreign workers wouldn’t hurt wages for the existing workforce, and would raise pay in many cases. The study follows a long line of research supporting the argument that skilled immigrants would boost the U.S. economy.
“Even for computer programmers, immigration of more computer programmers can be a good thing,” said Madeleine Sumption, a senior policy analyst at the Migration Policy Institute, a nonpartisan think tank in Washington. “Their skills are complementary. Clusters of highly skilled people can do better together than in isolation.”
But the latest research doesn’t resolve the debate for lower-skilled natives and immigrants. Previous research has suggested “immigration is better for high-skilled people than for lower-skilled people,” Ms. Sumption said. “It’s a very consistent finding that there’s more risk of competition for jobs at the low-skilled level.”
Workers who enter the U.S. on H-1B visas tend to be well-educated, with 46% holding up to a bachelor’s degree, 41% holding a master’s and 8% with doctorates in 2012, according to data from the Department of Homeland Security, which enforces U.S. immigration laws. They are most heavily concentrated in computer-related occupations, with 61% in that field.
The jobs in question are relatively high-wage positions, with a median salary for approved beneficiaries of $70,000.
JOSH ZUMBRUN and MATT STILES