How Immigration Reform Will Bring Economic Growth to the U.S.

Many immigrants have different skills from the native-born population, and complement the skills of the U.S. labor force. Immigrants make the economy more efficient by reducing bottlenecks caused by labor shortages, both in the high-skill and low-skill area.

That’s because the educational backgrounds of immigrants and native-born Americans are different. Statistically, the average skills of native-born American workers are distributed in a bell-shaped curve. Many Americans have high school diplomas and some college education, but relatively few adults lack high school diplomas and even fewer have Ph.D.s in math and science.

In contrast, immigrants’ skills are distributed in a U-shaped curve, with disproportionate shares of adults without high school diplomas who seek manual work and others with Ph.D.s in math and science. Among native-born Americans, 91% have a high school diploma or higher, whereas only 62% of noncitizens do. Foreign-born workers are about 16% of the labor force, according to the Labor Department, yet represent 49% of the labor force without a high school diploma, 25% of all doctorates, and 35% of doctorates in science, math, computer science and engineering.

Since immigrants have a smaller share of high school diplomas and B.A.s, which is where native workers tend to be concentrated, they do not compete directly with most native-born workers. Now think about the arguments some politicians are making about how immigrants take away jobs from Americans during this economy. If the distribution of labor shows that immigrants are entering areas of the labor force that native-born Americans choose not to work in, then those immigrants are filling a vital role in the economy.

Immigrants choose different jobs from native-born Americans. Low-skilled immigrants are disproportionately represented in the service, construction, and agricultural sectors, with occupations such as janitors, landscapers, tailors, plasterers, stucco masons, and farmworkers.

They come to be fruit pickers, as well as janitors and housekeepers, jobs native-born Americans typically do not choose as careers. However, immigrants are not found as crossing guards and funeral service workers, low-skill jobs preferred by Americans. Government, education, health, and social services, are sectors that employ few immigrants. Just looking at the fields of work that immigrants enter into compared to native-Americans, the fields that native-Americans enter compared to immigrants vary quite substantially in terms of how many occupy a given field.

For instance, Almost 8% of immigrants work in food service, compared with 5% of native-born workers. Almost 9% of immigrants are employed in building, grounds keeping, and maintenance, but only 3% of native-born Americans are. In contrast, nearly a quarter of native-born workers are employed in sales and office occupations, compared with 17% of immigrants. Among immigrants, 13% are employed in natural resources, construction, and maintenance occupations, whereas only 8% of native-born workers belong to this category.

Another key consideration is how much is invested by our government into our universities at the higher education level. The National Science Foundation data show that 176,000 foreign graduate students studied science and engineering in American universities in 2010. In 2009, the most recent data available, the federal government spent more than $63 billion on science and engineering research at American universities and research institutions. This funding helps finance Ph.D. programs, which are heavily populated with foreign students. More than $35 billion of this research spending is through the Department of Health and Human Services. Other funders include the Defense Department, at $6.8 billion, and the Department of Energy, at $7.2 billion.

When comparing the number of recipients of doctoral and graduate degrees, 52% of doctorate recipients in engineering and 40% of graduate students in the physical sciences were foreign-born temporary U.S. residents in 2011. By making it difficult for high-skill workers to stay in America, Congress is dissipating the value America receives from private and taxpayers’ investments in research. What we have here is a brain drain effect where our investment into higher educated individuals end up leaving the U.S. for another country and taking that education with them that they received from our world leading research institutes.

If filling the gaps in work fields that native-Americans do not occupy or keeping higher educated individuals here are not sufficient reasons for immigration reform, consider the economic impact in taxes alone for those who worked in the U.S. echnology Policy Institute fellow Arlene Holen, using Congressional Budget Office methodology, has estimated that if no green card or H-1B visa constraints had existed in the period 2003 to 2007, an additional 182,000 foreign graduates in science and technology fields would have remained in America. Their contribution to GDP would have been $14 billion in 2008, including $2.7 to $3.6 billion in tax payments. Three hundred thousand H-1B visa holders would also have remained in the U.S. labor force, earning $23 billion in 2008 and generating $34 to $47 billion in tax revenue over the next decade. That is a substantial amount of money that could be used towards the deficit our government has accrued.

In the end, there are plenty of reasons for how making immigration changes will benefit our economy and the American workforce. By making substantial changes to our immigration laws, immigrants can stay and apply those skills we desperately need in our labor force to help improve our economy.