Illegal Workers and Labor Force Participation

April 5, 2016 | PFIR

 

The just-released March jobs report should put a spring back in American workers’ steps.

Throughout the month, the economy added 215,000 jobs. Hourly wages rose slightly, by 7 cents for private sector workers. With more jobs available and wages ticking upwards, many Americans have decided to search for work. The labor participation rate has been slowly increasing, from 62.7 percent at the start of the year to 63.0 percent today.

Higher wages and more job opportunities clearly encourage struggling Americans to return to the workforce. But wages aren’t rising nearly fast enough, and the labor force participation rate remains near a four-decade low. Removing illegal workers from the labor force would jumpstart wage growth and help millions of Americans find jobs.

Illegal workers compete with American laborers, especially low-skilled ones like teenagers, for many jobs. As of 2010, one out of every five workers in the 10 most common teenage “summer” jobs was either an immigrant or an illegal alien.

That’s hundreds of thousands of positions filled by foreign workers instead of American teens. The lack of readily available jobs is a key reason that only 41 percent of teens were employed or actively looking for work last summer — the lowest share since WWII.

In addition to filling jobs that could go to Americans, illegal workers depress wages. Harvard economist George Borjas concluded that illegal workers from Mexico alone accounted for nearly a 4 percent wage drop for Americans without high school diplomas between 1980 and 2000.

There’s a simple way to spur wage growth and increase job opportunities for Americans — stop forcing them to compete with illegal foreign workers. Deporting illegal aliens and mandating employers use E-Verify, a free program that checks workers’ eligibility, would open up millions of jobs for Americans.

As a result, wages would skyrocket, since businesses would have to increase compensation to attract enough labor.

That’d be good for existing American workers — and aspiring ones. As NPR recently noted, “even a small wage uptick . . . [can] lure ‘discouraged’ workers back into the labor force.” If March’s 7-cent wage increase was able to boost the labor force participation rate, imagine what a wage increase of several dollars could do. Millions of Americans currently without work would reenter the job market.

A country is at its best when all of its citizens are contributing. America’s leaders can make that happen — by ensuring U.S. workers don’t face unfair competition from illegal foreign laborers.

Share this:

Add new comment