Decrease in Immigration Does Not Show Improvement in Employment Status of American Workers
Immigrants play a significant role in the U.S. economy, contributing to job creation and economic growth, according to numerous studies.
One key factor is the boost in consumer demand that immigrants bring. Their presence in the country increases the demand for local services, leading to the creation of more jobs, particularly for U.S.-born workers. A study by Gihoon Hong of Indiana University and John McLaren of the University of Virginia found that each additional immigrant creates 1.2 local jobs for local workers.
Immigrants also start their own businesses at a higher rate than U.S.-born individuals, as research by Jennifer Hunt and others has shown. This entrepreneurial spirit not only creates new businesses but also contributes to the overall dynamism of the U.S. economy.
Moreover, immigrants help reduce offshoring by filling skill gaps in the U.S. labor market. By doing so, they help keep jobs within the country, further contributing to job creation.
However, reducing the labor supply, including through more restrictive immigration policies, is likely to have the opposite effect. According to economist Michael Clemens of George Mason University, such measures will lead to lower levels of economic growth, resulting in less job creation and a less dynamic economy.
Business owners hit by sudden reductions to the labor supply invest less in new business formation, Clemens found. This means that restrictive immigration policies could potentially stifle the growth of new businesses and innovation in the U.S.
The impact of recent immigration policies, such as the Trump administration's 2020 proclamation blocking the entry of H-1B, H-2B, L-1, and most J-1 temporary visa holders, has been the subject of several studies. These studies, including one by the National Foundation for American Policy (NFAP) and another by the University of North Florida, have found that such measures did not help U.S. workers.
In fact, research by George Mason University economics professor Michael Clemens, as well as a study by University of North Florida economics professor Madeline Zavodny, suggests that the Covid-19 pandemic and Trump administration policies, including the proclamation, actually reduced H-1B and J-1 visas but did not help U.S. workers.
Contrary to some beliefs, immigration does not increase U.S. natives' unemployment or reduce their labor force participation, as a 2018 study by Madeline Zavodny found. Instead, having more immigrants reduces the unemployment rate and raises the labor force participation rate of U.S. natives within the same sex and education group.
In conclusion, a large body of research suggests that a drop in foreign-born workers is unlikely to produce economic gains for U.S. workers. Instead, immigrants help create and preserve jobs, boost consumer demand, and contribute to the overall dynamism of the U.S. economy.
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