<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:21024.wais]
NEW JOBS IN RECESSION AND RECOVERY:
WHO ARE GETTING THEM AND WHO ARE NOT?
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON IMMIGRATION,
BORDER SECURITY, AND CLAIMS
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
MAY 4, 2005
__________
Serial No. 109-39
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
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COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona ADAM SMITH, Washington
MIKE PENCE, Indiana CHRIS VAN HOLLEN, Maryland
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, Chief of Staff-General Counsel
Perry H. Apelbaum, Minority Chief Counsel
------
Subcommittee on Immigration, Border Security, and Claims
JOHN N. HOSTETTLER, Indiana, Chairman
STEVE KING, Iowa SHEILA JACKSON LEE, Texas
LOUIE GOHMERT, Texas HOWARD L. BERMAN, California
LAMAR SMITH, Texas ZOE LOFGREN, California
ELTON GALLEGLY, California LINDA T. SANCHEZ, California
BOB GOODLATTE, Virginia MAXINE WATERS, California
DANIEL E. LUNGREN, California MARTIN T. MEEHAN, Massachusetts
JEFF FLAKE, Arizona
BOB INGLIS, South Carolina
DARRELL ISSA, California
George Fishman, Chief Counsel
Art Arthur, Counsel
Luke Bellocchi, Full Committee Counsel
Cindy Blackston, Professional Staff
Nolan Rappaport, Minority Counsel
C O N T E N T S
----------
MAY 4, 2005
OPENING STATEMENT
Page
The Honorable John N. Hostettler, a Representative in Congress
from the State of Indiana, and Chairman, Subcommittee on
Immigration, Border Security, and Claims....................... 1
The Honorable Sheila Jackson Lee, a Representative in Congress
from the State of Texas, and Ranking Member, Subcommittee on
Immigration, Border Security, and Claims....................... 2
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 5
The Honorable Louie Gohmert, a Representative in Congress from
the State of Texas............................................. 6
The Honorable Linda T. Sanchez, a Representative in Congress from
the State of California........................................ 6
WITNESSES
Dr. Steven Camarota, Director of Research, Center for Immigration
Studies
Oral Testimony................................................. 8
Prepared Statement............................................. 10
Dr. Paul Harrington, Associate Director, Center for Labor Market
Studies, Northeastern University
Oral Testimony................................................. 28
Prepared Statement............................................. 30
Mr. Matthew J. Reindl, Stylecraft Interiors
Oral Testimony................................................. 63
Prepared Statement............................................. 65
Dr. Harry J. Holzer, Professor and Associate Dean of Public
Policy, Georgetown University
Oral Testimony................................................. 75
Prepared Statement............................................. 76
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress from the State of Texas, and Ranking
Member, Subcommittee on Immigration, Border Security, and
Claims......................................................... 113
NEW JOBS IN RECESSION AND RECOVERY: WHO ARE GETTING THEM AND WHO ARE
NOT?
----------
WEDNESDAY, MAY 4, 2005
House of Representatives,
Subcommittee on Immigration,
Border Security, and Claims,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:05 a.m., in
Room 2141, Rayburn House Office Building, the Honorable John
Hostettler (Chair of the Subcommittee) presiding.
Mr. Hostettler. Good morning.
Whether accurate or not, our present economic recovery has
been pegged a ``jobless recovery.'' There is a sense among many
Americans that the job opportunities they and parents once
enjoyed are no longer available to them and their children. For
those on the lower rungs of the economic ladder, the very
availability of the American dream seems to be in question.
Today we will examine the impact immigration is having on these
issues.
Specifically, we will hear from the authors of two studies
that have both concluded that all of the increase in employment
in the United States over the last few years has been
attributable to large increases in the number of employed
immigrants, while the number of employed natives has actually
declined.
The first study was conducted by Steven Camarota of the
Center for Immigration Studies. Mr. Camarota analyzed Census
Bureau data and concluded that between March, 2000, and March,
2004, the number of Native born adults with jobs decreased by
482,000, while at the same time the number of foreign-born
adults with jobs increased by 2,279,000. Thus, all of the 1.8
million net increase of adults with jobs went to foreign-born
workers.
The second study, also relying on Census Bureau data, was
conducted by Professors Andrew Sum and Paul Harrington and
other researchers at the Center for Labor Market Studies at
Northeastern University. They found that total civilian
employment increased by 2,346,000 over the period from 2001
through 2004 and that the number of foreign-born workers who
arrived in the U.S. in this period and were employed in 2004
was about 2.5 million. Thus, the number of employed Native born
and older immigrant workers decreased by between 158,000 and
228,000 over the four year period.
The authors concluded that ``[for] the first time in the
post-WWII era, new immigrants accounted for all the growth in
employment over a four year period. At no time in the past 60
years has the country ever failed to generate any new jobs for
Native born workers over a four year period . . .
Both these studies yield astounding results: Native born
Americans have not seen any increase in employment in recent
years. In fact, the number of jobs they hold has decreased. At
the same time, the number of employed immigrants has risen
substantially.
What are the implications of these findings? I will let the
authors of the studies relate their conclusions in detail, but
let me quote them in summary. Mr. Camarota concludes that
``[b]y significantly increasing the supply of unskilled workers
during the recession, immigration may be making it more
difficult for [similar American] workers to improve their
situation.'' He also finds that ``[t]he fact that immigration
has remained [consistently] high suggests that immigration
levels do not simply reflect demand for labor in this country.
Immigration is clearly not a self-regulating phenomenon that
will rise and fall with the state of the economy.''
Mr. Harrington's study concludes that ``[g]iven large job
losses among the Nation's teens, 20-24 year olds with no four
year degree, Black males, and poorly-educated Native born men,
it is clear that Native born workers have been displaced in
recent years.''
Reading these two studies, I reached the troubling
conclusion that our Nation's immigration policy has not
operated in the best interest of American workers, at least
over the last few years. It appears that the flow of
immigrants, both legal and illegal, seems to pursue its own
independent course, oblivious to whether we are experiencing
good times or bad. For struggling American workers, current
immigration levels can prove challenging during good times. In
bad times, they can be devastating.
Given this disconcerting picture of the prospects for work
for many of our fellow citizens, I couldn't agree more with the
conclusion reached by Professors Sum and Harrington when they
admonish us that ``[n]ow is an opportune time for the U.S.
Congress to reflect on the shortcomings of our existing
immigration policies.''
At this time, I turn to the Ranking Member of the
Subcommittee, the gentlelady from Texas, Ms. Jackson Lee.
Ms. Jackson Lee. Thank you very much, Mr. Chairman.
Two weeks ago, it was reported that African-Americans had
the highest unemployment of any group in the United States,
some 10 percent. We know that the economy is not percolating,
not even simmering, it is probably frying. The question of
economy and jobs, however, must be fairly and distinctly
separated away from the idea of immigration equates to a bad
economy.
Frankly, Mr. Chairman, I believe that our economy is
frying, not percolating, not spiraling upwards but spiraling
downwards; and I make the argument that with real economic
policies that confronted the question of job creation for all
Americans, we would be a better country.
We will be hearing testimony today about two articles on
the effect that immigrants have had on American workers. One of
them was written by Steven A. Camarota. It is entitled, ``A
Jobless Recovery? Immigrant Gains and Native Losses.'' Among
other things, this article observes that between March of 2000
and March of 2004, the number of adult immigrants holding a job
increased by more than 2 million, but the number of adult
Natives holding a job was nearly half a million. The article
concludes that immigration may have adversely affected the job
prospects of Native born Americans.
Particularly, I think what may be missing from this article
is the clear analysis of what kind of jobs, where the jobs are
located, and the interest and availability of Americans for
those jobs.
The other article reaches a very similar conclusion. It was
written by the Center for Labor Market Studies. It is entitled,
``New Foreign Immigrants in the Labor Markets in the U.S.: The
Unprecedented Effects of New Immigration and Growth of the
Nation's Labor Force in Its Employed Population, 2000 to
2004.''
It is important to understand that these articles are using
a broad definition of the term ``immigrant.'' they include
undocumented aliens, aliens who are lawful, permanent residents
and naturalized citizens. In fact, the article written by the
Center for Labor Market Studies goes even further. In that
article a definition of an immigrant is an individual who is
born outside of the 50 States and the District of Columbia.
Persons born in the U.S. Virgin Islands, Puerto Rico and Guam
are counted as being part of the immigrant population.
Our witness today, Professor Harry J. Holzer, will explain
why we should question the conclusion of these articles. Dr.
Holzer thinks that immigration has modest negative effects on
less-educated workers in the U.S., but it also has positive
effects on the economy. He expects the positive effects to grow
much stronger after baby boomers retire. Also, according to Dr.
Holzer, the employment outcomes of Native born Americans mostly
reflect the underlying weakness of the U.S. labor market,
rather than large displacements of new immigrants.
Particularly, Mr. Chairman, I would like to note the
obvious, I am an African American, and in my lifetime I have
experienced discrimination. Sadly to say, America still
discriminates--in the board room, in leadership roles in
corporate America, in education, in opportunities for
undergraduate education, opportunities for graduate education,
focusing African Americans on disciplines that will help and
create opportunities for them, equally so of the minorities
that have been discriminated or stigmatized, therefore
lowering, sometimes, their opportunities to succeed.
Isn't it interesting to talk about job loss for Americans,
and we can find a number of groups--Hispanic Americans, African
Americans, Muslim Americans--who still face discrimination in
America. Maybe if we fix those discriminatory practices, we
would find a fuller job market for all to participate in.
I agree with Dr. Holzer that immigrants have a positive
effect on the economy. Likewise, I would say I want to increase
the job market for the constituents that I represent in the
18th Congressional District, many inner-city youth, many
African Americans, many poor Anglos, poor Hispanics looking for
work that does not exist.
In fact, I recently participated in a conference at the
Offshore Technology Conference; and one of the issues was
creating jobs, creating a workforce for the energy industry in
the 21st century. They are lacking in job applicants between
the ages of 25 and 35. One of the reasons is because our
educational system has failed to educate those who would be
qualified to take these jobs.
Immigrants create new jobs by establishing new businesses,
spending their incomes on American goods and services, paying
taxes, and raising the productivity of United States
businesses. What I would hope is that, as we listen to these
particular panelists, that we will find not accusations but
solutions.
For example, I raise the question of asking Americans at
this stage of their lives to be bilingual on jobs that they
have previously not had the training, that provides a great
deal of consternation and divisiveness in our community. We
should be able to assume a job whether we are bilingual or not,
and that means that those who are able to perform the job
should be able to do the job and to be able to be hired for the
job. However, to castigate immigrants as a cause for a bad
economy I believe is the wrong direction to go.
I hope this same hearing is being held in Financial
Services, Ways and Means, and Energy and Commerce, as well as
Education and Labor so that we can focus our attention on the
real key issue, creating new, exciting, dynamic jobs for
Americans and those who live within our boundaries and, as
well, fixing the economy.
The American economy does not have a fixed number of jobs.
Economists describe the notion that the number of jobs is fixed
as the ``lump of labor'' fraught policy.
Job opportunities expand with the rising population. Since
immigrants are both workers and consumers, their spending on
food, clothing, housing and other items creates new job
opportunities. Immigrants tend to fill jobs that Americans
cannot or will not take in sufficient numbers to meet demand,
mostly the high and low ends of the skill spectrum. Occupations
with the large growth in absolute numbers tend to be the ones
that only require short-term, on-the-job training. This
includes such occupations as waiters and waitresses, retail
salespersons, cashiers, nursing aides, orderlies and
attendants, janitors, home health aides, manual laborers,
landscaping workers and manual packers. The supply of American
workers suitable for such work is falling on account of an
aging workforce and rising education levels.
Now I do not suggest that no American will take the jobs of
being a waiter, a retail salesperson, a cashier, a nursing
aide, a janitor, home health aide. I would not be so arrogant
to suggest that. But by creating a bustling economy, all those
jobs will expand. They are basically service jobs. Where is the
manufacturing arm of the United States? Where is the
intellectual job creation of the United States? Where is the
high-tech market of the United States? This is what a nation
that is capitalistic and democratic accepts as a good quality
of life.
Immigrants came in the early 1900's. They did work. They
moved up the ladder. They are now the corporate barons of
America. That is what is happening to America now. Immigrants
of color come to the United States, matched with African
Americans who first came here as slaves, and all of a sudden
they are all circling around the same pool of lack of
opportunity. America should wake up, create opportunity,
eliminate discrimination, expand its market, invest in its
economy, create new jobs. That is the answer, not pointing out
or isolating immigrants.
Finally, Mr. Chairman, some people are concerned that
undocumented workers lower wages for American workers. This is
a legitimate but probably exaggerated concern. It is not the
mere presence of undocumented workers that has led to low
wages. The problem is the lack of bargaining power that these
workers have against their employers. No worker chooses to be
paid low wages or to work under poor conditions, nor do we
force employers to give low wages. I would argue that if you
have earned access to legalization, allow immigrants to access
legalization, create a good job market, we will create a
workplace for all to work in.
The way suppression is attributable to the ability of
employers to exploit its foreign workforce, underpaying foreign
workers is only one of the methods used by employers to cut
labor costs. Temporary and part-time workers are employed
without worker benefits, and the labor laws are violated
routinely, and these happen to be Americans. The solution to
this and many other immigration-related problems in our country
is comprehensive immigration reform.
Mr. Chairman, I am delighted to note that our Full
Committee Ranking Member is present, and I would like to be
able to ask unanimous consent to yield to him at this time.
Mr. Hostettler. The lady's time has expired, but I will
recognize the gentleman from Michigan, the Ranking Member from
the full Committee, for an opening statement.
Mr. Conyers. I want to associate myself with the remarks of
our Ranking Member, Sheila Jackson Lee.
What I am interested in is the importance of us not
confusing the problem of illegal immigrants with all
immigrants, and somehow I am getting the feeling that this is
all being put together in one big cauldron and that we are
going from there.
The second point that I would like to make is that if there
are any reservations about the contributions of naturalized
citizens, I will be listening carefully to discuss this with
our witnesses and with my distinguished colleagues on the
Committee. Because our governor from Michigan, Jennifer
Granholm, is a naturalized citizen, coming from Canada at
probably the age of two. I also throw in the names of Dr.
Kissinger and Governor Schwarzenegger as others. The point is
that naturalized citizens should certainly be separated from
the issues surrounding the undocumented immigrants, those who
are here living outside of the immigration requirements.
Now my concern about elevating naturalized citizens is so
strong that I have introduced for the second term a proposal
that naturalized citizens, after 20 years in this country,
would be able to do the only thing that they can't do right now
and that is run for President of the United States. It seems to
me the reason that this was done several hundred years ago is
pretty clear, but whether that is a concern at this time, I
don't think so.
Now it is true that many employers take advantage of
undocumented workers and that creates some friction in the job
market area. We are having traditional exploitation of foreign
workers who we bring in here. I have heard, for example, in the
agricultural industry it has been stated that we couldn't do
much farming if we didn't bring in people to pick the fruit and
do all of the stoop labor that is involved in that area. So I
think that there are some huge issues that should be studied as
well, as referenced by the gentlelady from Texas, by other
Committees for their complete impact.
Now we are going through a period of employment stagnation.
Under this Administration, we have never had so many people
recently out of work; and the figure 5.2 percent unemployment
is very disingenuous because a lot of people stop looking for
work after they can't find it. And Michigan is very aware of
that because we are hit by an even larger unemployment
consideration.
Two more examples. We have an incredible outsourcing
problem. We are paying corporations to leave this country, and
they get tax credits for it. And then we have two foreign trade
policies--that I hope the witnesses will feel free to touch
on--three really, NAFTA, CAFTA, and China's Most Favored Nation
policy, in which our textile industry is on the rocks right
now.
So I look forward to these hearings, and I thank the
Chairman for allowing me to present a few thoughts before the
witnesses begin. Thank you, sir.
Mr. Hostettler. I thank the gentleman.
The Chair now recognizes the gentleman from Texas, Mr.
Gohmert, for purposes of an opening statement.
Mr. Gohmert. Thank you, Mr. Chairman.
Very briefly. I appreciate the witnesses being here. I am
looking forward to your testimony.
My perspective comes from having a great-grandfather that
immigrated to this country in the late 1800's, and before the
turn of the century. When he came, he didn't speak English and
had less than $20. Within 25 years, before the turn of the
century, he built the nicest home in Cuero, Texas, and did
extremely well for himself.
I think America is still the land of opportunity. We need
immigration, it needs to be legal, and we don't need to hurt
the country.
I am very encouraged by some of what I see from the
Hispanic immigration in that they--most come with very strong
family values and moral values, and I think they are good for
the country. What we need to know about is, from you
gentlemen's perspective, is the effect of immigration and how
it can be made better. We do know that 19 people can knock down
the biggest buildings we have, so I am strong on knowing
exactly who is coming in. That is my perspective, and I am
looking forward to hearing yours.
Thank you.
Mr. Hostettler. Does anyone else wish to make an opening
statement?
The Chair recognizes the gentlelady from California, Ms.
Sanchez.
Ms. Sanchez. Thank you, Mr. Chairman and Ranking Member
Jackson Lee, for convening another Subcommittee hearing to hear
an important issue that is related to immigration.
Today we are looking at the issue of how immigrants impact
American workers and Americans looking for jobs; and this
hearing is an intersection of two issues that I care very much
about, immigration and labor. I honestly believe that
hardworking, law-abiding people who emigrate to this country
should have every opportunity to work so that they can provide
for their families and, if they choose to, make America their
new home. I also feel that undocumented immigrants that have
been in this country for years, contributing to American
businesses and our economy, should have a chance to earn legal
status and a stake in this country so that they can continue to
contribute to the United States on a permanent basis. We should
never forget--at all costs, we should never forget that
immigrant labor is what helped build this country and what
continues to help this country's economy.
Obviously, American workers helped to build and sustain
this country as well. You will not find a stronger advocate for
American workers than myself. I am a proud member of IBEW Local
441, and I am a founding Chair and a current co-Chair of the
Congressional Labor and Working Families Caucus.
I fully support American workers and want to make sure that
their jobs and their families are protected, and I am confident
that if we think real hard and we think thoughtfully about
these issues we can create policies that make sure that
American jobs are secure and also that law-abiding immigrants
work toward earned legalization in this country.
As this Subcommittee and this Congress work on immigration
reform this year, we have to take the rights and the needs of
both immigrant workers and American workers into consideration.
We have to balance those interests.
I am looking forward to hearing from the witnesses today,
and I want to thank them for taking their time to testify and
to answer questions from the Subcommittee. I hope that they
will help us formulate realistic and workable policies that
benefit--that take into account the benefits of immigration and
also protect American workers.
With that, I will yield back to the Chair.
Mr. Hostettler. I thank the gentlelady.
The Chair will now introduce the members of our panel.
Steven Camarota is Director of Research at the Center for
Immigration Studies here in Washington. He has testified
numerous times before Congress and has published many articles
on the impact of immigration in such journals and papers as
Social Science Quarterly, The Washington Post, the Chicago
Tribune and National Review. Dr. Camarota writes regularly for
the Center for Immigration Studies on a broad range of
immigration issues, including his recent reports on labor,
Social Security, immigration trends, and border and national
security. He holds a Ph.D. from the University of Virginia in
public policy analysis and a Masters Degree in political
science from the University of Pennsylvania.
Paul Harrington is Associate Director of the Center for
Labor Market Studies, or CLMS, and professor of economics and
education at Northeastern University in Boston. At the CLMS,
Dr. Harrington conducts labor market research at the national,
State and local level on a broad range of issues, including
immigration, higher education performance, workforce
development, and youth and families.
Dr. Harrington and CLMS were the first to estimate the
sharp increase in the number of undocumented immigrants during
the 1990's. Paul Harrington earned his Doctor of Education
degree at the University of Massachusetts, Boston; and he also
holds Master's and Bachelor's degrees from Northeastern
University.
Matthew Reindl is the proprietor of Stylecraft Interiors,
an architectural woodworking factory in New York. His family
has owned this factory for over 50 years. His grandfather
founded the company in 1951, after immigrating to America in
1930. Mr. Reindl is the third generation of his family to run
the business.
Over the past several decades, Stylecraft Interiors has
employed American citizens and legal immigrants from around the
globe, including countries in Europe, the Caribbean and Central
America. In addition to his work at the company, Mr. Reindl is
the graduate of the New York Institute of Technology in
electromechanical computer technology.
Dr. Harry Holzer is Professor and Associate Dean of Public
Policy at Georgetown University and a Visiting Fellow at the
Urban Institute in Washington, D.C. His research has primarily
focused on the labor market problems of low-wage workers and
other disadvantaged groups, and he has published multiple books
on his findings.
Formerly, he was the Chief Economist for the U.S.
Department of Labor, and a professor of economics at Michigan
State University. Dr. Holzer received both his Bachelor of Arts
and Doctorate in Economics from Harvard University.
We thank the witnesses for being here. You will notice that
there is a series of lights. Without objection, your full
written statements will be made a part of the record, and if
you could stay as close to the 5-minute time limit, we would
appreciate it.
Mr. Hostettler. The Chair now recognizes Mr. Camarota for 5
minutes.
TESTIMONY OF STEVEN CAMAROTA, DIRECTOR OF RESEARCH, CENTER FOR
IMMIGRATION STUDIES
Mr. Camarota. Mr. Chairman and Members of the Subcommittee,
thank you for inviting me to testify on the impact of
immigration on the U.S. labor market during the recent economic
slowdown. My name is Steven Camarota, and I am Director of
Research at the Center for Immigration Studies, a nonpartisan
think tank here in Washington.
Now, prior to the slowdown that began in 2000, my own
research and general set of assumptions had been that the
primary effect of immigration would have been to reduce wages
and perhaps benefits for Native born Americans primarily
because it is increasing the supply of labor but not
necessarily affecting unemployment or overall employment.
An important study--just to give you one example--published
in 2003 in the Quarterly Journal of Economics found that
overall immigration reduced the wages of American workers by
about 4 percent and those with less than a high school
education by about 7 percent; and the effect exists regardless
of legal status. You are just adding more workers and exerting
downward pressure on wages.
However, a more careful analysis of recent data has made me
rethink that the only effect is on wages and possibly benefits.
In a study that we published at the end of last year, we found
that between March of 2000 and March of 2004 the number of
adult natives who were unemployed increased by 2.3 million, but
at the same time the number of employed immigrants increased by
2.3 million--by adults, I mean--18 years in age and over. About
half of the growth in immigrant workers since 1970 was from
illegal aliens. We have added about 1.2 million new adult
illegal alien workers in the United States in the last 4 years.
Overall, the level of new immigration, legal and illegal,
does not seem to have slowed very much since 2000. By remaining
so high when the economy was not creating many new jobs,
immigration almost certainly has reduced job opportunities for
some natives and immigrants already here.
Now of course it would be a mistake to assume that every
job taken by an immigrant is a job lost by a native, but the
statistics are striking, and they should give serious pause to
those who want to legalize illegal aliens instead of enforcing
the law and reducing the supply of labor. Not only did native
unemployment increase by 2.3 million, but perhaps most
troubling of all we found that the number of natives between
the ages of 18 and 64 not in the workforce increased by 4
million over this time. And detailed analysis shows that this
increase in non-work among Americans was not due to some rise
in early retirement or increased college enrollment or even new
moms staying home to spend time with their new babies.
Now our analysis also shows little evidence that immigrants
only take jobs Americans don't want. For one thing, immigrant
job gains have been throughout the labor market, with more than
two-thirds of their employment gains in jobs that require at
least a high school education. However, it is true that
immigration has its biggest impact at the bottom end of the
labor market in jobs done by less-educated workers. In job
categories such as construction labor, building maintenance,
and food preparation, immigration added 1.1 million adult
workers in the last 4 years, but there was nearly 2 million
unemployed adult natives in those very same occupations in
2004.
Those arguing for high levels of immigration on the grounds
that it helps alleviate pressure of a tight labor market are
ignoring the very high unemployment rate among Americans in
those very same occupations, averaging about 10 percent in
2004.
Not only is native unemployment highest in occupations
which saw the largest growth in immigrants, the available
evidence also shows that the employment picture for natives
generally looks worse in those parts of the country that saw
the largest increase in immigrants. It is exactly the kind of
pattern you would expect if immigrants are displacing natives.
For example, in States where immigrants increase their share of
the workforce by 5 percentage points, the number of natives
working actually fell by 3 percent on average. But in States
where the share of immigrant workers increased by less than 1
percent, the number of natives holding a job actually went up
by about 1.4 percent.
Now, of course, businesses will continue to say
``[i]mmigrants only take jobs Americans don't want.'' But what
they really mean is that, given what those businesses would
like to pay and how they would like to treat their workers,
they cannot find enough Americans. Therefore, employers want
the United States to continually increase the supply of labor
by non-enforcement of immigration laws.
In conclusion, I would argue forcefully that probably one
of the best things we can do for less-educated natives and
legal immigrants already here is to strictly enforce our
immigration laws and reduce the number of illegal aliens in the
country. We should also consider reducing unskilled legal
immigration as well. This would greatly enhance worker
bargaining power vis-a-vis their employers and allow their
wages, benefits and working conditions and employment
opportunities to improve.
Thank you.
Mr. Hostettler. Thank you, Dr. Camarota.
[The prepared statement of Dr. Camarota follows:]
Prepared Statement of Steven A. Camarota
Mr. Chairman and members of the subcommittee: Thank you for
inviting me to testify on the impact of immigration on the labor market
during the recent economic slow down. My name is Steven Camarota, and I
am Director of Research at the Center for Immigration Studies, a non-
partisan think tank here in Washington.
Prior to the economic slowdown that began in 2000, I had generally
assumed that the primary impact of immigration would have been to
reduce wages and perhaps benefits for native-born workers but not
overall employment. An important study published in 2003 in the
Quarterly Journal of Economics showed that immigration reduces wages by
4 percent for all workers and 7 percent for those without a high school
education. \1\ A significant effect to be sure.
---------------------------------------------------------------------------
\1\ ``The Labor Demand Curve Is Downward Sloping: Reexamining the
Impact of Immigration on the Labor Market,'' by George J. Borjas.
November 2003. The Quarterly Journal of Economics.
---------------------------------------------------------------------------
However, after a careful examination of recent employment data, I
have become increasingly concerned that immigration may also be
reducing employment as well as wages for American workers. A study by
the Center for immigration Studies published last year shows that
between March 2000 and March 2004 the number of unemployed adult
natives increased by 2.3 million, but at the same time the number of
employed immigrants increased by 2.3 million. \2\ By adults I mean
persons 18 and older. About half the growth in immigrant employment was
from illegal immigration. And overall the level of new immigration,
legal and illegal, does not seem to have slowed appreciably since 2000.
By remaining so high at a time when the economy was not creating as
many new jobs, immigration almost certainly has reduced job
opportunities for natives and immigrants already here.
---------------------------------------------------------------------------
\2\ The report ``A Jobless Recovery: Immigrant Gains and Native
Losses'' can be found at the Center's web site www.cis.org/articles/
2004/back1104.html
---------------------------------------------------------------------------
Of course, it would be a mistake to assume that every job taken by
an immigrant is a job lost by a native, but the statistics are
striking. And they should give serious pause to those who want to
legalize illegal aliens instead of enforcing the law and reducing the
supply of workers. Not only did native unemployment increase by 2.3
million, but we also found that the number of working-age natives who
said they are not even looking for work increased by 4 million.
Detailed analysis shows that the increase was not due to early
retirement, increased college enrollment, or new moms staying home with
their babies.
Our analysis also shows little evidence that immigrants only take
jobs Americans don't want. For one thing, immigrant job gains have been
throughout the labor market, with more than two-thirds of their
employment gains in jobs that require at least a high school degree.
However, it is true that immigration has its biggest impact at the
bottom end of the labor market in relatively low paying jobs typically
occupied by less-educated workers. But such jobs still employ millions
of native-born workers.
In job categories such as construction labor, building maintenance,
and food preparation, immigration added 1.1 million adult workers in
the last 4 years, but there were nearly 2 million unemployed adult
natives in these very same occupations in 2004. About two-thirds of the
new immigrant workers in these occupations are illegal aliens. Those
arguing for high levels of immigration on the grounds that it helps to
alleviate the pressure of tight labor markets in low- wage, less-
skilled jobs are ignoring the very high rate of native unemployment in
these job categorizes, averaging 10 percent in 2004.
Not only is native unemployment highest in occupations which saw
the largest immigrant influx, the available evidence also shows that
the employment picture for natives looks worst in those parts of the
country that saw the largest increase in immigrants. For example, in
states were immigrants increased their share of workers by 5 percentage
points or more, the number of native workers actually fell by about 3
percent on average. But in states where the immigrant share of workers
increased by less than one percentage point, the number of natives
holding a job actually went up by 1.4 percent. This is exactly the kind
of pattern we would expect to see if immigration was adversely
impacting native employment.
Of course, businesses will continue to say that, ``immigrants only
take jobs Americans don't want.'' But what they really mean is that
given what they would like to pay, and how they would like to treat
their workers, they cannot find enough Americans. Therefore, employers
want the government to continually increase the supply of labor by non-
enforcement of immigration laws.
I would argue forcefully that one of the best things we can do for
less-educated natives, and legal immigrants already here is strictly
enforce our immigration laws and reduce the number of illegal aliens in
the country. We should also consider reducing unskilled legal
immigration.
This would greatly enhance worker bargaining power vis-a-vis their
employers and would result in lower unemployment rates and increased
wages and better working conditions for American workers, immigrant and
native alike.
ATTACHMENT
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Mr. Hostettler. Dr. Harrington.
TESTIMONY OF PAUL HARRINGTON, ASSOCIATE DIRECTOR, CENTER FOR
LABOR MARKET STUDIES, NORTHEASTERN UNIVERSITY
Mr. Harrington. Thank you.
I will begin by talking about the contributions of civilian
employment--of foreign immigration to civilian employment
growth in the U.S. over the past 3 decades to give some
historical context to this.
During the decade of the 1970's, the proportion of foreign-
born immigrants that became employed in the United States was
about 12 percent. About 12 percent of the overall employment
rise was among foreign-born new immigrants. Between 1980 and
1990, new immigrants accounted for about a quarter of the total
rise of employment growth in the country. 1990 to 2000, that
share actually rose to 44 percent during this period of time.
Particularly it is important to understand during the 1990's it
was a period of very strong economic growth, with sharp
declines in overall unemployment rates in the Nation.
Between 2000 and 2004, though, all of the employment change
that we had in the United States, all the job growth that we
had in the United States was concentrated among foreign-born
individuals. Minimally 110 percent of the net rise of
employment in the U.S. was among foreign born. So the impact of
new immigration on the growth of the employed population of the
Nation in the last 4 years has been historically unprecedented.
The annual average number of employed new immigrants over
the 1990's increased by about 600,000 a year. Between 2000 and
2004, that growth averaged between 600,000 and 750,000 new
immigrants per year, exceeding the annual inflows that we had
during the 1990 boom years. This large influx of new employed
immigrants occurred despite the recession of 2001, the
terrorist events of 9/11, and the jobless recovery of 2001 to
2003. So there seems to be little connection between this flow
of newly employed immigrants and overall levels of economic
activity in the American economy.
All the net increase in the number of employed civilian
workers between 2002 and 2004 took place among new immigrants,
while the number of Native born and established immigrant
workers declined somewhere between 150 and 250,000, we
estimate.
During the same four year period of time, the relative size
of job losses among teens and young adults with no
postsecondary schooling, black males and blue collar workers
were quite substantial. These job losses were above
expectations based on overall job performance in the Nation.
Those Native born who were most in direct competition with new
immigrants lost jobs at the highest rates.
Who were these immigrants? An above-average fraction were
males, about two-thirds were males. A high share were under the
age of 30. Half of all new employed immigrants were under the
age of 30 and a very high share were under the age of 35.
Seventy percent of all the new employed immigrants were age 35
or under. A very large proportion lacked a high school diploma.
In fact, 35 percent of newly employed immigrants between 2000
and 2004 had no high school diploma at all, although an
additional 27 percent had a college degree. So it was a bit of
a bimodal distribution in the educational characteristics of
that population.
About 60 percent were from Mexico, Central America, South
America; another one-fifth came from Asia, fewer than 10
percent were from Europe or Canada; and about one-half of these
individuals appear to be undocumented immigrants.
While these immigrants were employed in every industry and
occupational group, they were overrepresented in agriculture,
construction, food processing, leisure and hospitality
industries, and low-level service industries including personal
care, entertainment and janitorial services. Many were employed
in industries where unemployment and job vacancy ratios were
quite high.
The ratio of unemployed workers to job vacancies in the
construction industry in 2004 ran eight to nine to one. In
other words, there were close to nine workers for every one job
vacancy in the construction industry. In the manufacturing
sector, there were about five experienced unemployed workers
for every one job vacancy in that industry. In the leisure and
hospitality industry, that ratio ran at three to one. Many
others worked in industries where the absence of real wage
growth indicates no labor shortage at all. The vast majority of
jobs obtained by new immigrants were in industries and
occupations where there were no demonstrated labor shortages at
all.
Teenagers in 2004 had the lowest employment population
ratio. In other words, the fraction employed in the U.S.
economy was the lowest it has ever been since we began
measuring it in 1948. Between 2000 and 2004, the employment
rate of teenagers fell from about 46 percent--about 46 out of
100 teens had a job on average in 2000--fell down to about 36
to 37 percent by about 2004. It was the largest absolute rise
of any group in the American economy.
The 16 to 24 population had the second largest reduction in
the size of their employment rates over that period of time.
Other groups that expanded relatively large job losses were
black males, blue collar workers and manufacturing construction
industries, and the latter of that group were--much of the
employment in that group was characterized by off-the-books
sort of work activities.
Overall--and I will end on this--in this labor environment
characterized by little new job growth, labor surplusses in
most industries and occupations, high levels of immigration,
particularly among young, unskilled and low-educated workers
leads to job displacement among Native born. There is little
empirical evidence to support the notion that new immigrants
are taking large numbers of jobs that Americans do not want to
do.
Thank you.
Mr. Hostettler. Thank you, Dr. Harrington.
[The prepared statement of Dr. Harrington follows:]
Prepared Statement of Paul Harrington
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Mr. Hostettler. Mr. Reindl.
TESTIMONY OF MATTHEW J. REINDL, STYLECRAFT INTERIORS
Mr. Reindl. Chairman Hostettler and Members of the
Committee, thank you for the privilege to testify at today's
hearing.
I operate a small family-owned woodworking factory
established by my grandfather in 1951, an immigrant to this
country in 1930, when one person's salary was enough to support
a family, buy a house, start a business and achieve the
American dream. My grandfather was a man that always obeyed the
law and taught his family to respect the rules and laws of the
country. He took great pride in becoming an American citizen.
Unfortunately, I see the American dream collapsing before
my eyes. The American working class is being squeezed from all
ends. Our cost of living is going up drastically, while at the
same time salaries are being suppressed. Today, many married
couples find it difficult to live on one salary. High-paying
computer and technical jobs are being outsourced to foreign
countries. Many of our manufacturing jobs are leaving the
country to foreign countries, where the salaries range from 20
cents to $3.50 an hour. This huge wage imbalance is one factor
that will keep American job and wages suppressed and is a
little difficult for the Government to control.
Another factor that is making it more difficult for both
legal immigrants and Native born Americans to live the American
dream is the massive influx of millions of illegal aliens into
our country. This is something our Government can control. In
fact, it is the constitutional responsibility of the United
States Government to patrol our borders and stop invasions.
I am here speaking for the numbers--for the shrinking
numbers of middle-class Americans whose wages are being
depressed due to an onslaught of illegal aliens and the
unwillingness of our Government to enforce existing laws.
As my competitors break the law and hire illegal aliens, my
product price cannot be raised. My health care, material,
insurance and tax costs have all gone up. In order to stay in
business, I cannot give my legal employees the raises they
deserve.
Mr. Chairman and Members of the Committee, Federal law
prohibits anyone from hiring, aiding or abetting illegal
aliens, yet Federal agencies, local governments, private and
church organizations are setting up so-called hiring sites so
that legal and illegal immigrants can work off the books and
disregard Federal and State laws.
In Freeport, Long Island, a hiring site was set up with a
grant that was given to the village from the Department of
Housing and Urban Development. This is a flier circulating
throughout the village by its organizers. Note it says, day
labor site authorized by the village. Day laborer--meaning some
legal immigrants but too many undocumented workers, also known
as illegal aliens--why are my tax dollars supporting this? Why
is my Government supporting illegal activity? Why do I have to
compete against employers blatantly breaking immigration, tax,
Social Security and insurance laws?
In a 2002 Barron's article, a contractor who does
multimillion dollar construction jobs blatantly brags about
hiring day laborers and not paying workers compensation because
he says it is very expensive.
What frustrates me the most is that everywhere I look the
Government law enforcement agencies refuse to enforce any laws
pertaining to illegal aliens. We have millions of aliens
illegally employed in our country, and the Government only
fined 13 employers in 2002, 1 year after 9/11. I guess INS or
ICE does not read Barron's. I think everyone will agree it is a
pathetic record.
To my knowledge, not one employer in the last few years has
been jailed for hiring an illegal alien. This whole problem can
be fixed immediately with no new laws, no new legislation, just
enforce existing laws. All the laws and fines are on the books,
and they all exist. What does not exist is our Government's
will to enforce our laws.
Without employment or the hope of employment, illegal
aliens will not be tempted to enter our country in violation of
our immigration laws. Employers need to be prosecuted for
hiring illegal workers, and legal immigrant workers need to
believe that all employers respect our laws.
The Federal Government can't allow a criminal minority of
employers to profit from illegal labor practices because it
undermines the founding principles of our Nation.
That concludes my testimony, and I look forward to any
questions. Thank you.
Mr. Hostettler. Thank you, Mr. Reindl.
[The prepared statement of Mr. Reindl follows:]
Prepared Statement of Matthew James Reindl
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Mr. Hostettler. Dr. Holzer.
TESTIMONY OF HARRY J. HOLZER, PROFESSOR AND ASSOCIATE DEAN OF
PUBLIC POLICY, GEORGETOWN UNIVERSITY
Mr. Holzer. Thank you, Mr. Chairman.
It is my view that the employment difficulties of Native
born Americans in the last 4 years mostly reflect underlying
weaknesses of the U.S. labor market in that time, rather than
large displacements by new immigrants, and I would like to make
five points to that effect.
My first point is, very simply, net immigration has really
remained very constant in the period between the 1990's and the
post 2000 period. Instead, what has changed is the rate at
which we create new jobs in the United States.
If you go back to the 1990's, especially the late 1990's,
we were creating three million new payroll jobs on average per
year. In the more recent period, starting in early 2003 through
2004, I think it is accurate to describe the American economy
as having had a short recession and a jobless recovery for 3
years. In that period, from March, 2001, to 2004, the total
number of nonforeign payroll jobs in the U.S. declined by 1.7
million, and that cannot be attributable to the arrival of
immigrants. At the same time, the U.S. population was growing
by 8 million, mostly reflecting Native born Americans. So what
really changed in this time period is the rate of job creation,
not the rate of immigration, which is very constant.
My second point is that, contrary to some of the other
interpretations you have heard this morning, immigration cannot
account for many other employment-related difficulties in the
labor market. If you look beneath the aggregate level of
numbers, you see all kinds of patterns and shifts across
sectors that really are quite totally unrelated to immigration.
Consider what is happening in the manufacturing sector. We
have lost roughly 3 million jobs between March of 2000 and
March of 2004. Now, it is true that new immigrant employment
rose in the manufacturing sector by about 300,000, but that
means new immigrants only account for roughly one-tenth of the
total job loss in manufacturing. Therefore, the vast majority
of it reflects other factors.
We saw job increases in other places like the public
sector, almost a million new jobs created in the public sector,
virtually none of those going to immigrants. If you look across
many other sectors in the economy, increases in employment in
health care, decreases in employment in retail trade, those
patterns are almost completely unrelated to the flow of new
immigrants in the economy. And that reflects a broader point
that every year, in fact, every quarter, many, many millions of
jobs are created and destroyed in the American economy. That is
how our economy and our labor market works. The flow of about a
half a million new immigrants into the labor force every year
is a very small part of that overall churning in the labor
market.
Similarly, the earnings growth of over 100 million
nonsupervisory workers in the United States--which have not
risen at all in the last 2 years--cannot possibly be driven by
the 2 million immigrants that have newly arrived in the labor
force during that time period.
My third point is that it is important to keep our eye on
the ball over the longer term. Most economists expect this
labor market to recover. We can't say exactly when. The
dominant fact of the labor market over the next 20 years will
be the retirement of the baby boomers in very large numbers;
and during that time period, when that begins to happen,
projections show that immigrants will account for all of the
growth in the labor force. So it is very important for that
growth in the labor force to occur during that period.
We need workers to pay the taxes, to pay for the health and
retirement benefits that the rest of us are expecting,
especially in certain key sectors of the labor market, science
and engineering, health care. We will need immigrant workers to
help fill the jobs that contribute importantly to the services
and the growth of the economy that we want to see here.
Fourthly, most studies show that over the long run
immigrants have a modest negative effect on the employment
earnings of less-educated workers, and they generate other
important benefits for the economy.
Mr. Camarota has already cited one study showing a 3 to 4
percent decline in wages for less-educated workers. That study
is at the high end of the numbers generated by economists on
earnings losses. Some other studies equally credible find much
smaller negative effects. But virtually all economists believe
that immigrants also provide important benefits for the
economy. They are consumers as well as producers. They do
contribute important labor in areas where sometimes shortages
occur, certainly in terms of health care, engineering, et
cetera. They help reduce costs in housing, food and elsewhere
that are important for these workers.
My last point simply is, what does this all mean for
policy? I think if we want to generate more jobs in the United
States there are a sensible set of fiscal policies that can
help to do that, and I can talk about them more during the
question and answer period.
Over the long term, we really need to keep our eye focused
on the real issues in the American labor force: the education
and skills of the workforce, the ability of the American
workers to get health care, child care and other important
supports. I think we might make some changes in the immigration
law, but, again, we need to keep our eye on the long-term ball,
not on the short 3- to four year period that is very unusual
and that is subject to different interpretations.
Thank you.
Mr. Hostettler. Thank you, Dr. Holzer.
[The prepared statement of Dr. Holzer follows:]
Prepared Statement of Harry J. Holzer
Two recent papers, by Steven Camarota (2004) and by Andrew Sum et.
al. (2004), present data showing that the employment of new immigrants
in the U.S. rose during the period 2000-2004, while that of native-born
Americans (and even earlier immigrants) declined.
A superficial reading of the data in these papers might suggest
that rising immigration in the past four years has been a key factor in
accounting for the poor labor market performance of native-born
Americans during this period. But such a reading would be highly
inaccurate. The employment outcomes of native-born Americans mostly
reflect the underlying weakness of the U.S. labor market, rather than
large displacements by new immigrants.
<bullet> Net immigration has remained fairly constant between the
1990's and the post-2000 period; instead, what has changed is the rate
of job growth in the U.S. economy.
During the 1990's, 13 million immigrants arrived in the U.S., for
an average of about 1.3 million per year (Capps et. al., 2004). Since
the year 2000, that rate of immigration has remained largely unchanged
(Sum et. al., Table 1). The total share of immigrants in the population
has risen only from 11 to 12 percent during the past four years.
In contrast, the rate of net job growth in the U.S. has collapsed
between the late 1990's and the period since 2001. Between March 1995
and March 2000, our economy generated nearly 15 million new nonfarm
payroll jobs and increased employment by about 13 million.\1\ But,
after a period of modest job growth between March 2000 and 2001 (with
payroll and employment increases of about 1 million each), the economy
went through a short recession followed by a relatively ``jobless''
recovery for 3 years. Between March 2001 and 2004, total employment
grew by just over one-half million, while the number of nonfarm payroll
jobs declined by about 1.7 million. At the same time, the US population
grew by about 8 million. In the past year, job growth has picked up
somewhat, though the labor market remains quite weak.\2\
---------------------------------------------------------------------------
\1\ The Bureau of Labor Statistics (BLS) calculates employment
rates of individuals from its monthly Current Population Survey of
households, while numbers of payroll jobs are drawn from its survey of
establishments. The latter is based on much larger samples and is
widely considered more accurate in the short term. But the former
captures self-employment and casual employment that may not appear in
official business payrolls.
\2\ Between March 2004 and 2005, both employment and payroll jobs
rose by over 2 million. But the percentage of the population employed
in March 2005 remained at 62.4 percent--well below the peak of 64.7
achieved in the year 2000.
<bullet> Contrary to the interpretations suggested by Camarota and Sum
et. al., immigration cannot possibly account for many of the labor
---------------------------------------------------------------------------
market developments that have occurred since 2000.
In the 1990's, strong immigration coexisted with very low
unemployment rates and record high percentages of the population
employed. Indeed, immigration helped to relieve the pressure of very
tight labor markets on employers, who had difficulty finding enough
native-born workers able and willing to fill the jobs they were
offering. Yet the same rate of immigration today coexists with a
sluggish labor market, in which an additional 5 million jobs would be
needed to recreate the employment rates of the late 1990's and 2000.\3\
---------------------------------------------------------------------------
\3\ With a population of over 225 million, it would require about
5.2 million more jobs to generate the peak employment rate of 64.7
achieved in the year 2000.
---------------------------------------------------------------------------
The papers by Camarota and Sum et. al. clearly show that, in the
aggregate, employment among new immigrants has increased while that of
native-born Americans has declined since 2000. But a look at some more
disaggregated data suggests a far more complex story. While new
immigrant employment has been relatively concentrated in a small number
of sectors (such as building/grounds maintenance, food preparation and
construction), the shifts in jobs across other sectors of the U.S.
economy have been much greater.
For example, the number of payroll jobs in manufacturing declined
by about 3 million between March 2000 and March 2004; new immigrant
employment rose, but only by 335,000 (Sum et. al), in this sector. The
number of payroll jobs in the public sector rose in this time period by
850,000; almost none of these jobs went to new immigrants. Strong job
growth has occurred in diverse services such as health care and
professional services, while employment growth has slowed or declined
elsewhere (such as in retail trade), in patterns almost completely
unrelated to immigration.\4\
---------------------------------------------------------------------------
\4\ These numbers are calculated from various tables available at
the BLS website (www.bls.gov).
---------------------------------------------------------------------------
Indeed, the U.S. labor market is one in which many millions of jobs
are newly created and newly destroyed every year. Millions of workers
are constantly reallocated across firms and sectors of the economy
(Davis et. al., 1996). When the overall rates of new job creation in
the economy exceed those of job destruction, net job growth is
positive; when overall job creation lags behind (or is comparable to)
job destruction, then net job growth is weak. Either way, the new
employment of a few million immigrants over a 3- or 4-year period has a
major effect only on the small number of sectors, especially in
specific geographic regions, where they are heavily concentrated;
otherwise they play a fairly minor role in the overall churning of the
labor market.
Does the labor force participation behavior of native-born workers
and immigrants respond differently to a strong or weak economy? In a
strong job market, American workers respond by entering the labor force
in great numbers--as they did in the 1990's. But, in a weaker job
market, some Americans withdraw from the labor force in favor of other
pursuits--such as enrollment in higher education. Since immigration
rates to the U.S. and immigrant participation in the labor force are
much less sensitive to these changes in our economy, their net share of
labor force activity and employment will temporarily bump upwards when
this occurs--as they have since 2000. But none of this implies that
immigrants are directly displacing U.S. workers in large numbers.
One other area in which a weak overall labor market affects
American workers is in their real earnings--i.e., their rates of pay
adjusted for inflation. In the past four years, increases in earnings
have been fairly modest, despite the dramatic growth of productivity in
the U.S. workforce. In fact, the average real earnings of over 100
million nonsupervisory workers have failed to rise at all in the past
two years.\5\ This development is another sign of a weak overall labor
market, and cannot possibly be attributed to the 2 million or so new
immigrants who have gained employment in the U.S. since 2000.
---------------------------------------------------------------------------
\5\ Between March 2003 and 2005, average weekly earnings of
nonsupervisory workers rose by just 3.6 percent--well below increases
in the Consumer Price Index (CPI) and other measures of inflation in
the same period. Yet worker productivity grew by about 7 percent in the
same period.
<bullet> Over the next few decades, tight labor markets are likely to
---------------------------------------------------------------------------
return as Baby Boomers retire in large numbers.
Will the current weakness of the U.S. labor market last
indefinitely? Most economists expect the labor market to strengthen
over the next several years, although the exact pace at which this will
occur remains uncertain.
Over the longer term, the labor market will be hugely affected by
Baby Boomer retirements. Roughly 60 million workers, now aged 41-59,
were born in the period 1946-64. They will soon begin retiring in large
numbers, and will likely generate a period of labor market tightness
that will persist over 20-30 years. Indeed, all net growth in the labor
force over the next two decades will be generated by immigrants (Aspen
Institute, 2002).
There are many ways in which the labor market will adapt to these
changes. Retirements will be delayed; labor will be replaced by new
technologies and foreign outsourcing; and wages in some sectors will
need to rise. But immigration should also play a key role in this
adjustment process (Ellwood, 2001). Indeed, foreign-born students and
workers will be a major source of new scientists and engineers in the
U.S. over the next few decades, and will be critical to continuing
productivity growth here (Freeman, 2004). The role of immigrants in
other sectors of the economy where extremely tight labor markets are
expected--such as nursing and long-term care for the aging population--
will be critical as well.
<bullet> Most studies show that, over the longer term, immigrants have
very modest negative effects on the employment of less-educated workers
in the U.S., but generate other benefits for the U.S. economy.
Professors George Borjas and Lawrence Katz of Harvard University
have recently calculated that immigration in the period 1980-2000 might
have reduced the earnings of native-born U.S. workers by 3-4 percent,
with larger negative impacts among high school dropouts but smaller
among all other education groups (Borjas and Katz, 2005). Their
estimates are at the high end of those generated by labor economists;
others, including Professor David Card of the University of California
at Berkeley, have found smaller negative effects (Card, 2001).
Virtually all economists agree that immigrants also provide some
important benefits to the U.S. economy. Beyond providing labor in
sectors and areas where tight markets and even shortages might
otherwise occur, immigrant labor helps reduce the prices of some
products--such as housing and certain foods. These lower prices imply
higher real incomes to most Americans, including the disadvantaged.
<bullet> Native-born American workers, especially those who are less-
educated, would be best served by policies designed to stimulate more
employment in the short term while improving their skills and
supporting their incomes in the longer term.
Since native-born workers have been hurt not by rising immigration
but by declining job growth in the past four years, policies that
encourage greater job growth might be considered in the short term. For
instance, tax cuts and public spending could be much better targeted to
those who generate more spending and therefore more employment--i.e.,
lower-to-middle income Americans--rather than the wealthy. Temporary
tax credits for new job creation and business investments might be
considered as well.\6\
---------------------------------------------------------------------------
\6\ The New Jobs Tax Credit of the late 1970's, and the Investment
Tax Credit of various time periods, could serve as models for any new
such credits now.
---------------------------------------------------------------------------
Over the longer term, Americans need to improve their skills to
maintain and increase their earnings growth. For the disadvantaged,
this can be encouraged by a wide range of efforts, such as expanding
higher-quality pre-school programs, reforms in K-12 education, more
public support for occupational training and internships/
apprenticeships, and greater funding for Pell grants and other supports
for higher education. Expanding access to work supports like health
care and child care, along with higher minimum wages and expansions of
the Earned Income and Child Tax Credits, would help as well.
Immigration reforms that adjust the skill mix of those entering the
U.S. over time might also be considered. But these should be based on a
careful reading of our skill and labor market needs over the next
several decades, rather than a misreading of our very recent
experience.
Conclusion
Recent papers by Sum et. al. and by Camarota show that employment
of immigrants rose while that of native-born Americans declined between
2000 and 2004. But these findings do not prove that the former
development caused the latter to occur. Indeed, immigration has
occurred at a fairly constant rate in the U.S. since the 1990's--while
employment and earnings growth of American workers have fluctuated
dramatically. Over the long term, immigration has modest negative
effects on less-educated workers in the U.S. but other positive effects
on the economy--and the latter will grow much stronger after Baby
Boomers retire. American workers are thus best served by policies
designed to stimulate job growth in the short-term, and their own
skills and incomes over the long-term, rather than by policies to
drastically curb immigration.
REFERENCES
Aspen Institute. Growing Together or Growing Apart. Aspen, Colorado.
2002.
Borjas, George and Lawrence Katz. ``The Evolution of the Mexican-Born
Workforce in the United States.'' Paper presented at the conference
on Mexican Immigration and the U.S. economy, National Bureau of
Economic Research, Cambridge MA, February 2005.
Bureau of Labor Statistics website. www.bls.gov. Various tables.
Camarota, Steven. ``A Jobless Recovery? Immigrant Gains and Native
Losses,'' Center for Immigration Studies, Washington D.C., October
2004;
Capps, Randolph et. al. The New Neighbors: A User's Guide to Data on
Immigrants in U.S. Communities. The Urban Institute, Washington DC,
2004.
Card, David. ``Immigrant Inflows, Native Outflows, and the Local Labor
Market Impacts of Higher Immigration.'' Journal of Labor Economics,
January 2001.
Davis, Steve; John Haltiwanger and Scott Schuh. Job Creation and
Destruction. Cambridge MA: MIT Press, 1996.
Ellwood, David. ``The Sputtering Labor Force of the 21st Century: Can
Social Policy Help?'' In A. Krueger and R. Solow eds. The Roaring
Nineties. New York: Russell Sage Foundation, 2001.
Freeman, Richard. ``Doubling the Global Workforce: The Challenge of
Integrating China, India and the Former Soviet Union into the World
Economy.'' Presentation at the Institute for International
Economics, Washington DC, November 2004.
Sum, Andrew et. al., ``Foreign Immigration and the Labor Force of the
U.S.: The Contributions of New Foreign Immigration to the Growth of
the Nation's Labor Force and its Employed Population, 2000 to
2004,'' Center for Labor Market Studies, Northeastern University,
Boston MA, July 2004.
Mr. Hostettler. We will now turn to questions from the
Members of the Subcommittee.
First of all, Dr. Camarota, you conclude that over a recent
four year period, the number of Native born Americans with jobs
dropped by almost 500,000, while the number of immigrants with
jobs increased by over 2 million. Do you believe that there is
any relationship between the two numbers?
Mr. Camarota. Yes. I think if we look deeper into the data
we do see that the areas where natives often do the worst are
those sectors of the economy such as building, cleaning and
maintenance, construction labor, food processing and
preparation. In those sectors, unemployment averages about 10
percent for natives, and have seen some of the biggest hits.
And it is precisely in those sectors where we have added the
most immigrants. In just those sectors we have added over a
million new immigrants in just those low-income job categories
in the last 4 years. Two-thirds of those are probably illegal
aliens, based on the data.
At the same time, there were 2 million Native born adult
Americans in those very same occupations who said that they
were unemployed and looking for work. So if you look at the
States, too, geographically you do seem to find evidence that
places with lots of immigrants also had the worst job
performance for natives.
Mr. Hostettler. I appreciate that.
You have also done work on Social Security, the impact on
Social Security. In these portions of the labor market that you
are talking about, do individuals who contribute to Social
Security in those portions of the labor market, do they wind up
receiving more in benefits in Social Security or less in
benefits than they paid into the system?
Mr. Camarota. Right. One of the reasons immigration is a
problem for the Social Security system is the Social Security
system is redistributive in nature. And because such a large
share of immigrants have very little education, they make very
little money--even legal immigrants paid on the books and that
sort of thing. As a consequence, they don't pay that much in
Social Security taxes because in the modern American economy,
people with relatively little education don't pay that much.
However, when it comes time to retire, we generally pay them a
more generous benefit. So immigration creates problems for the
Social Security system because of it's redistributive nature.
And there are other factors as well.
Just very briefly, we have something called the earned
income tax credit. A very large share of legal, unskilled
immigrants qualify for that, and that is designed to give you
back basically all or most of your Social Security tax. So,
overall, immigration is problematic for the Social Security
system.
Mr. Hostettler. Thank you very much.
Dr. Harrington, do you agree with Dr. Camarota that large
numbers of new immigrant workers are directly competing with
Native born workers for jobs and that these are jobs that
Americans will, in fact, do?
Mr. Harrington. Yes, I do. I think the evidence is that we
have got about--a little bit over a third of all newly employed
immigrants are high school dropouts. They also found that about
70 percent of them are under the age of 35. When you look at
the structure of employment rates, in other words, the
probability that somebody has a job by age and by educational
attainment, you see that the employment rate declines are the
highest among high school dropouts over the last 4 years among
Native born, and you also see that the decline in employment
rates are the largest among teens. In fact, when you look at
the other end of the labor market where there are few
immigrants, that is, adults 55 and over, only 3 percent of the
total rise in immigrant employment is among that
population.That is the only group of Native born workers where
the employment rates have risen.
So I think the evidence is very clear that there is this
competition between immigrants and Native born. I think the
evidence that particularly teenagers and young adults just
refuse to take jobs that immigrants take is just absolutely
wrong.
Mr. Hostettler. Thank you.
Mr. Reindl, you have a unique perspective on the impact of
immigration, especially illegal immigration, on employment and
the economy, especially with regard to companies such as your
own, which make it a matter of resolve to follow the
immigration laws. In the Intelligence Reform bill passed last
year by Congress and signed into law by the President, we
called for a significant increase in Immigration and Customs
Enforcement agents, in fact, in the House. We wish to have at
least half of those new agents dedicated to employer sanctions.
As an employer in an industry of employers, what impact do
you think it would have on the employment of illegal aliens if
employers realized in New York, for example, that a large
number of Immigration and Customs Enforcement agents, ICE
agents, were dedicated to enforcing the employer sanctions law.
Mr. Reindl. If they actually made headlines and locked up
some of these unscrupulous employers, and employers see that
you are going to get caught, it will have a great impact. That
is the whole key. You have to enforce the law. We are just not
doing it. It is at every level of Government. It is not just
ICE doing it. What about Social Security fraud? What about
income tax? What about IRS? I mean, these laws are being
blatantly broken in our faces, and no Government agency will
enforce it.
I have complained to worker's comp, New York State, the
Department of Labor, to go after these hiring sites. No
investigations. None. Every level of Government, no
enforcement. That is what I see, if we can start getting all
the different agencies together and cracking down, especially
where it is being thrown in our face, that is the first thing
you have to do. Thanks.
Mr. Hostettler. Thank you. My time has expired.
The Chair now recognizes the gentlelady from Texas for 5
minutes.
Ms. Jackson Lee. Mr. Chairman, if I might ask unanimous
consent to call on the Ranking Member of the Full Committee at
this time.
Mr. Conyers. Thank you, Mr. Chairman. I think what we have
been hearing is that American workers are being negatively
impacted in our economy by foreign workers, mostly illegals.
And Professor Holzer, I think that may be an
oversimplification because we have had a decline of job growth.
We have had a stagnant economy, more or less. So I think it is
too easy to just raise up the immigrants who are kind of easy
targets to make this kind of accusation. If we move forward on
that premise legislatively, I think we may be going in the
wrong direction. What say you?
Mr. Holzer. I largely agree with those comments. Again, if
you look over a longer time period the rate of immigration in
the last 4 years is no different than it was in the roaring
1990's when the same level of immigration was consistent with
very low unemployment rates, very high percentages of the
population employed.
How could the same level, the same rate of immigration now
have generated all these problems, not only for the millions of
Americans who aren't working, but again for well over 100
million workers who are actually experiencing negative wage
growth? That cannot possibly be attributed to this influx of
immigrants, which is no different now than it has been over the
previous many years.
Again, when you look at many different sectors of the
economy, except for those few where the immigrants are
concentrating--look what is happening in manufacturing, health
care, many other sectors--one cannot possibly attribute the
large increases or decreases in employment to the flow of
immigrants. We need to look at the economy broadly, not just
those few sectors where immigrants are concentrated.
Mr. Conyers. Well, here is the problem. Illegal immigrants,
yes. We have got to go after them. We have got to prevent them
from coming over or coming into the country. But there are a
number of areas in our economy where we need immigrant labor,
and I don't know if that point has been made here, but I think
Mr. Reindl was moving in that direction when he was saying if
you are not prosecuting employers who are exploiting foreign
labor then you are not going to get any resolution to the
problem. If IRS isn't prosecuting vigorously, that adds to it.
Do you think that we have, Mr. Reindl, a problem in which
we can say we have got to get to this immigrant problem but at
the same time we don't say--and, also, we need immigrant labor
because a lot of things wouldn't happen without them because we
have jobs that many Americans won't take no matter what their
condition is?
Mr. Reindl. Well, there is no job an American won't take.
It is just that the pay levels have been depressed so much that
they are seeking jobs elsewhere. At least in my field that is
how it is.
As far as enforcement goes, you hit it on the right head.
There is no enforcement.
But one thing--it is not just, like this day laborer sign
that I was holding up before. There are legal and illegal
immigrants getting jobs at this site, working off the books.
They are not paying into Social Security. They are not paying
into worker's comp, and there is just no enforcement at any
level. But it is both legal and illegal, and it drives me nuts
that our Government allows this.
Mr. Conyers. What about, Mr. Holzer, these huge trade
agreements, NAFTA, CAFTA, China Most Favored Nation, promoting
U.S. corporations to go overseas? We have a great deal of
outsourcing in labor going on, our outsourcing that creates
unemployment here. The automobile industry is now becoming an
example of that in Michigan.
Mr. Holzer. I would favor the elimination of tax subsidies
and credits that encourage outsourcing that work.
More broadly, though, I believe that international trade,
exports and imports do create benefits for the American
consumer as well as some losses for the American worker. I
think we need to balance, carefully balance those benefits and
costs in a strong robust labor market. If we also invested in
the retraining and reeducation of many of those workers as well
as a better set of unemployment insurance and other supports,
the damage done to those workers losing those jobs would be
considerably reduced.
Mr. Conyers. Well, on the next round I want to talk about
how we get to a full employment economy.
Mr. Hostettler. The Chair now recognizes the gentleman from
Iowa, Mr. King, for 5 minutes.
Mr. King. Yes. I thank the Chairman, and I appreciate the
testimony of the witnesses. This subject is interesting to look
at the economy from the perspective of yourself, Mr. Reindl,
and versus the broader perspective as proposed by Mr. Holzer. I
would direct my first question to Mr. Holzer. That is, is there
such a thing as too much immigration, be it either legal or
illegal?
Mr. Holzer. I wouldn't say that any total number of
immigration is too much. I think it really depends on the
nature of the immigrants and how they get here and what their
characteristics are.
Like all of the witnesses today, I am concerned about
undocumented and illegal immigrants. I believe in enforcing the
laws we have to the best of our ability. I also believe that no
matter what we do on the enforcement side that some of those,
many of those workers will still be here, especially the ones
who have been here.
Mr. King. With regard to whether there is such a thing as
too much immigration, you would qualify, then, the type of
immigrants and the characteristics they bring with them, the
work skills. What about cultural background? Would they be
things that you would consider?
Mr. Holzer. I would be very reluctant to look at cultural
backgrounds. I think that is very easy to misinterpret, and we
don't know how those translate into the labor markets. Again,
some kinds of immigrants are probably more desirable from a
strictly economic point of view than others. But I think at all
skill levels, immigrants do contribute to lower costs, lower
prices.
Mr. King. Let us go to my question. How much would be too
much immigration, provided that, say, we have talked about low-
skilled, unskilled, illiterate people coming in and taking
these jobs that allegedly Americans won't take. I happen to
agree with Mr. Reindl. I believe that Americans will do any job
and that you have to pay them for it and provide the benefits
for that.
Unskilled, illiterate labor, either legal or illegal, how
much would be too much for a nation that has a population of
roughly 282 million people?
Mr. Holzer. I don't know the answer to that. I am not sure
anyone has a fixed number they can say.
Mr. King. Isn't that, Mr. Holzer, the central question
here, that as we open the doors up and we get greater and
greater groups of immigrants coming in, if we don't address
that question and have a national debate on how much
immigration is too much, we can't begin to deal with the other
questions that are underneath that great umbrella question?
Mr. Holzer. No. I would argue that the central question--
given the level of immigration that we are realistically
talking about, which has been fairly constant over time, we are
not bumping into these theoretical hypothetical limits.
Mr. King. Let me----
Mr. Holzer. If I could finish, the question is what to do
with the immigrants to have a level playing field.
Mr. King. I asked the question how much is too much. We
stopped our immigration and gave a time for assimilation back
in the 1920's. We didn't have an acceleration immigration
policy during that period of time all the way up until we
adjusted policy in the early 1960's and adjusted the policy in
the 1980's. So maybe the legal numbers coming in the 1990's
aren't a lot different than the legal numbers coming in this
decade.
But I would submit to you this question, how would we know
how many came in? Are we 8 million, 10 million, 12 or 14
million illegals, or is that number larger or smaller?
Mr. Holzer. As I said, I believe the rate of incoming
immigration has remained constant over the time. It is well
below the peak levels at the turn of the 20th century----
Mr. King. Yes. Is that percentage of population or in total
numbers?
Mr. Holzer. As a percentage of our population.
Mr. King. I would agree with that. Thank you.
I would turn to Mr. Reindl to make a statement here. I have
certain empathy with you. I spent my life building a
construction company and sold that company to my oldest son a
couple of years ago. He finds himself in a condition today
where he is competing against his competitors that hire illegal
labor. He pays benefits, provides year-round jobs, retirement
benefits, health insurance benefits and guarantees them 12
months of work.
He has just finished a job where they have to wait for the
carpenters to come in from Mexico in order to begin, because
they don't come as early because it is cold in that part of the
country until about the 1st of May or so, and they leave
earlier than the end of the year.
I tell him, you must hire legals, not illegals, no matter
what the temptation is, no matter how hard you have got to work
to survive.
I would just ask you to address that subject matter. Can
you continue facing that kind of competition?
Mr. Reindl. Believe me, it is getting harder. It is getting
harder every day. My competitors are hiring either illegals or
they are not paying their full share of benefits. It is now
kind of unheard of in my industry to pay for full health
benefits for my employee and their families. I am one of the
rare shops that is doing it now. I don't know if I can continue
because my product price can't be raised.
Mr. King. Then I don't know if anyone has spoken on this
panel to the effect on the middle class. What is happening in
your opinion to the middle class that we have had in America?
Mr. Reindl. I think it is shrinking, obviously. I mean, so
many friends my age are moving out of New York and fleeing to
other States where the housing is less because they just can't
make ends meet in New York. So it is getting tough on us.
Mr. King. I thank you.
Then quickly to Mr. Camarota. With the statement made by
Mr. Holzer with regard to our immigration numbers are not
greater than they have been at the peak period of times in the
early part of the 20th century, could you speak to that, Mr.
Camarota?
Mr. Camarota. Yes. Well, in terms of absolute number,
obviously, the number coming in. In terms of percentages, we
did hit an all-time high in 1910 of about 14.7 percent. But we
will probably be at that all-time high and then beyond that at
the current rate within about a decade or so. So we are on
track to pass what was a very unusual time in American history
anyway.
Mr. King. Even as a percentage of the overall population?
Mr. Camarota. In terms of numbers we have triple the number
of people.
Mr. King. Thank you, Mr. Camarota. Thank you, Mr. Chairman.
I now yield back.
Mr. Hostettler. The Chair recognizes the gentlelady from
Texas for 5 minutes.
Ms. Jackson Lee. Thank you, Mr. Chairman. Ms. Sanchez, do
you want to go at this time?
Ms. Sanchez. Yes. If you will yield, I would.
Ms. Jackson Lee. I will go after you.
Ms. Sanchez. Thank you.
Ms. Jackson Lee. I would ask unanimous consent to allow Ms.
Sanchez to go, and I will follow her.
Mr. Hostettler. Without objection.
Ms. Sanchez. Thank you. I am interested, Mr. Camarota, in
your testimony. You stated that between March 2000 and March
2004 the number of unemployed adult natives increased by 2.3
million, but at the same time the number of employed immigrants
increased by 2.3 million.
Looking superficially at those numbers, it sounds like a
very compelling argument. Now, I am not a statistician, but
wouldn't you agree that the two events could have occurred
independently from one another or have been completely mutually
exclusive?
Mr. Camarota. As I said, it would be wrong to think that
somehow every job taken by an immigrant is a job lost by a
native. But if we look at those parts where native unemployment
went up, in some of the biggest rates by education or by age or
by occupational category, they do tend to be precisely those
parts of the economy where there was the largest influx of
immigrants. And if we----
Ms. Sanchez. But the question is, though, if you just look
superficially at that, could those two things have happened
independently or mutually exclusively of one another?
Mr. Camarota. I don't think they did but they could have,
sure.
Ms. Sanchez. Thank you. This is for all the panel.
I am just going to throw some things out there and I am
going to be peppering you all with different questions.
But you know it is interesting, some of you on the panel
have said that there are no jobs that Americans won't take.
Well, we have had previous hearings where we have had folks in
the dairy industry out West talk about jobs that pay $12 and
$14 an hour that they have advertised for and cannot get any
American workers who are willing to do that work.
So they find that there is a need for immigrant labor. So I
am just going to throw that out to you, that you know this
absolute--there are no jobs that no Americans, that some
Americans won't take--It actually does occur, in fact. It is
not a rare phenomenon.
Coming from a great agricultural State of California, there
are a lot of jobs, trust me, in California, that there are
Americans who aren't willing to do that work despite repeated
attempts.
I want to ask Mr. Harrington and Mr. Camarota. You talk
about enforcement of immigration, and you talk also about
depressed wages and lack of benefits. Don't you think we could
achieve the objective of trying to raise wages and raise
working conditions if we enforced labor protections and
workplace enforcement of working conditions? Isn't that one
side of the equation? Because I haven't heard you all speak too
much about that.
Mr. Harrington. I think that is a very important side of
the equation. One of the things Mr. Reindl talked about was the
creation of new labor market institutions. When I drove in this
morning I came from Annandale, Virginia and on Little River
Turnpike out there is a shape-up. It is a group of guys that
are standing at 7-11 about 6 in the morning. These are guys
going to get picked up and engage in a wide variety of under-
the-table economic activities, largely cash payments. Whether
they get paid or not I don't know. It is certainly not going to
contribute to the State's unemployment insurance system, Social
Security system and the like. But there has been a----
Ms. Sanchez. I am talking about the employers. Let us talk
about the employers, whether they are paying minumum wages--
Mr. Harrington. That is what I am talking about. There are
employers stopping at the shape-up picking these guys up on
construction jobs, on landscaping jobs, on brick laying jobs,
on a variety of activities, all of which disappears, it's all
under the table. That is replicated thousands of time
throughout the country. You will find it in D.C., you will find
it in Philadelphia, you will find it in Los Angeles. We have
created over the last 4 or 5 years a whole set of illegal labor
market institutions that we have not seen since the Great
Depression.
Ms. Sanchez. So enforcement would help on that?
Mr. Harrington. Absolutely.
Ms. Sanchez. My time is very limited so I am going to skip
really quickly to Mr. Reindl. I really feel for you because I
used to do labor compliance work. I used to do go out to job
sites construction job sites and make sure that the contractors
that were on those jobs were paying their employees. Davis-
Bacon wages are in California little Davis-Bacon wages.
Oftentimes they were cheating and not paying for wages that
they were supposed to be. They weren't paying full worker's
compensation.
So I am very sympathetic to you, but I am going to make
several suggestions to you: Number one, that tax breaks and tax
incentives that give benefits to companies that reincorporate
overseas or ship jobs overseas is probably one of the problems,
because folks locally are finding it hard to compete with
companies that do that to depress labor markets.
And the free trade agreements that we sign into with other
countries which don't include workforce protections or any
labor rights also means that those labor markets have much
depressed wages and so companies flee the United States in
order to compete, because we are essentially giving them no
other option. But we are incentivizing them from leaving this
country. So it makes it very difficult to keep honest employers
that are willing to pay benefits and willing to pay decent
wages in business in the United States.
I would just make this one last suggestion. You know, the
minimum wage has not been raised in this country in the longest
period of time since its inception in the 1930's. There are a
number of us who have been trying to raise that minimum wage to
get those wages up so there will be more competition for those
jobs. Unfortunately, that is something that Congress has been
unwilling to pass.
With that, I will yield back as my time has expired.
Mr. Hostettler. The Chair now recognizes the gentleman from
Texas for 5 minutes.
Mr. Gohmert. Thank you, Mr. Chairman. I just have a few
questions. Let me ask, Dr. Harrington, you had given us a
number of statistics. I am curious, do you have any idea what
percent of the immigrants being employed, the foreign born
immigrants, speak English?
Mr. Harrington. I don't know the answer to that, sir.
Mr. Gohmert. This can be to any of you. Is there any
evidence that there are jobs taken by foreign born immigrants
which have actually been refused by Americans first?
Mr. Harrington. Sir, I can just speak to this. One of the
ways economists judge what is going on in the labor market is
something called the employment rate. When you look at the
employment rate, particularly in our cities, you see the
employment rates of young adults have plunged.
In the City of Los Angeles, the employment rate for 16 to
19-year-olds already low during the year of 2000 at 31 percent,
fell to 21 percent just 4 years later. The State of California
fell from 38 to 30, from the U.S. went from about 46 to 36
percent. These are historically unprecedented declines in
teens.
Mr. Gohmert. We have seen increases in obesity, indicating
perhaps laziness among teenagers. Do you have statistics that
show that those 16-year-olds actually went in and applied for
jobs?
Mr. Harrington. No, sir, I don't.
Mr. Camarota. I could just point out one thing.
Mr. Gohmert. I thank you.
Mr. Camarota. The current population surveys asks people
are you currently looking for work, and what was your last job.
When we look at that, we find millions of people who said, hey,
I am really looking for work, and my last job was in hotel and
restaurant, my last job was in food processing and preparation.
Now maybe they are being deceptive or maybe they are not really
looking, but the available evidence suggests that there are
millions of people who say that very thing when asked.
Mr. Holzer. If I could have a different reading of those
same numbers.
Mr. Gohmert. Sure.
Mr. Holzer. The large joblessness or lack of employment
that you see in inner city areas reflects a range of factors.
One of the issues is the fact that a lot of young people become
discouraged very early on and never even enter the labor force,
because they see a very limited set of opportunities facing
them in terms of jobs and wages. Early in life they make
another set of choices that I think is very unfortunate, that
they often regret later on. It is very important to improve
those opportunities to help draw those workers in.
However, there are workers looking for jobs, and the CPS
does indicate that there are some number of million. That
doesn't mean that they apply for every available job. I would
dispute this notion that millions of unemployed workers have
looked in these small number of sectors where immigrants are
mostly concentrated.
Mr. Gohmert. Are there any statistics regarding the number
of unemployed foreign born immigrants, whether legal or
illegal? Does anybody know?
Mr. Camarota. Yes. There are statistics on that.
Unemployment rates among immigrants vary quite a bit by
education and so forth. Let us see if I can find you a rate
here. The overall rate he says is a little bit higher.
Immigrants are a little bit more likely to be unemployed. It is
about 7 to 8 percent. It is a little bit lower for natives.
Mr. Gohmert. Okay. Let me talk about the IRS not pursuing
employers. Are there any estimates on how many employers or
employees do not pay FICA or withholding to the IRS?
Mr. Camarota. I can speak to the issue of immigration. Most
sociological research indicates that between 50 and 60 percent
of illegal aliens are paid on the books. In my work I have
usually estimated 55 percent. Now what they usually--the
evidence often----
Mr. Gohmert. Paid on the books means----
Mr. Camarota. Their employers pay Social Security, but what
they usually do is get a lot of withholding so they don't pay
any income tax. In other words, they usually claim a lot of
exemptions. That way they don't have to file at the end of the
year. That is usually--at least for Federal income tax, that is
what they do.
Mr. Gohmert. Anyone else? I thank you.
Thank you, Mr. Chairman, I yield back.
Mr. Hostettler. The Chair now recognizes the gentlelady
from California for 5 minutes, Ms. Waters.
Ms. Waters. Thank you very much, Mr. Chairman, and Members.
I am trying to digest some of this data and information that is
being presented to us. I think we should all look carefully at
it, because I think it is important for us not to handle this
as a political issue where people are fanning the flames of
fear and division in an effort to make people think they are
protecting them in some special way and approach this from a
very strong public policy approach to deal with what is a
problem.
I do think we have a problem. I am not in denial about
that. I do think there is some job competition. I don't know
the extent of it. I am going to take a look at all of this
information, and I think we should not be in denial about that.
At the same time, I think we must recognize that for some
of the people who are yelling the loudest, they are not yelling
at this Administration and the President about protection of
the border.
As you know, the President put funds for 200 border patrol.
Some of us have signed on both sides of the aisle a letter to
the President saying that you promised 2,000 and that is not
enough, but we want you to live up to your commitment to
protect the border and to stop the flood of illegal
immigration.
One of the reasons it is so important for us to handle this
with integrity is we do not want to confuse legal immigration
with illegal immigration. We do not want to create hatred and
division in the way that we handle this issue. So I think there
are a number of things that must be done.
In addition to securing the border, how many folks are
willing to say that we are going to not just fine employers
because that becomes a cost of doing business? How many people
are going to make it a crime for employers to hire illegal
immigrants? How many people are willing to do that?
For those of you on the other side of the aisle, I thank
you for being here. If my friends who are wanting cheap labor
for certain sectors of our society and who will come up with
kind of phony guest worker programs, are not willing to talk
about making it a crime to hire illegal aliens, immigrants, I
don't want to hear from them, because they are not serious
about this.
Again, we have talked about minimum wage. Some of the same
folks refuse to support an increase in minimum wage. That will
go a long way toward encouraging more natives to go after some
of these jobs.
Yes, it is not an either/or. There are some jobs that
natives will not take. You are not going to find people in any
of our districts flooding to the agricultural areas to pick
grapes or lettuce or anything else. You know it. Everybody
knows that, and we must recognize that.
While I don't like these phony guest worker programs that
would exploit immigrants in ways that will not recognize, in
some way, the amount of time and the number of years they may
put into this so that they can be looked at as those who would
be supported for some kind of permanent status, I believe that
we can work in ways that we can get tough on illegal
immigration, recognize that some things have already happened
in the system that must be taken care of.
I am not for illegal immigrants not being able to be
themselves. I know what happens when you don't have any money,
when you don't have any food, your children are hungry. I know
what happens, it is an increase in crime. So we can't have it
all ways, we can't have it both ways.
We can't have Members talking out of both sides of their
mouth about this issue. If we are going to stem the tide of
illegal immigrants that, yes, are causing competition in jobs,
and, yes, they are taking jobs that some people would take, and
recognize that there are jobs that natives will not take and
recognize that we need an increase in minimum wage and we need
to make it a crime for employers who hire illegal immigrants
and the Federal Government--you know, Lou Dobbs has gone just
wild on this subject. But the most interesting thing was they
found that there were illegal immigrants who were working on a
Federal Government project, who are working to construct a
courthouse someplace.
So, you know, we all have to see what role we can play in
making sense out of this, and not simply talking about it in a
way that will just not recognize the way this whole thing has
evolved. We must also remember that most of this focus is just
on certain illegal immigrants.
Now, if you are from Cuba you can come as long as the boats
can get you out of Cuba, and they have the wet foot/dry foot
policy. You get one foot on land, then you can stay, and that
is no, no ceiling on that.
Now, if you are from Haiti, you can't come at all. So we
have got a lot of work to do, and we have got to figure out how
to do it with integrity, and we have got to make sense out of
how not to just disregard the fact that we have allowed this
problem to evolve over a period of time.
You have families involved. People talk about deportation
where you would split families. I am not for that either. Don't
forget, you know, I come from African heritage where people who
were brought to this country, families were split and sold off
and went in one direction and the other direction.
So that is why I say it is very complicated. We have to
really approach it in a manner that will recognize all of these
complications and not simply that there are illegal aliens,
immigrants here who must be deported, or somehow we can have
them here when we want them to do certain kind of work but when
we don't need them we close down the border to them.
Thank you very much, Mr. Chairman.
Mr. Hostettler. The gentlelady's time has expired.
The Chair now recognizes the gentleman from Arizona for 5
minutes.
Mr. Flake. I thank the Chairman and the witnesses.
Mr. Camarota, what is your or your organization's estimate
as to the number of illegals currently in the workforce here in
the U.S.?
Mr. Camarota. Yes. It looks like about 6 million total
immigrants account for roughly, a little less than 3.5 percent
of all workers and about 1.5 percent of economic output.
Mr. Flake. So just over 6 million. Those are--those who are
in the workforce being paid not under the table but as----
Mr. Camarota. Oh, no, about 3 million of them are being
paid under the table. That is a rough estimate, 3 million off
the books.
Mr. Flake. So there are as many being paid under the table
according to your estimates?
Mr. Camarota. Yes, a 50/50 split about.
Mr. Flake. If we have--if we enforce the current law, the
current law says that anybody who is here illegally, obviously,
goes home. I have heard talk of some generational attrition or
some other terms to deal with those who are here illegally now
that are in the workforce.
What is your recommendation for those who are here
illegally now in the workforce? Is it to immediately enforce a
law, send them home immediately?
Mr. Camarota. Well, obviously we take quite a lot of time
and effort to begin to enforce the law, so the process would be
relatively slow.
Mr. Flake. What is a lot of time?
Mr. Camarota. Oh, I think it would take a couple of years
to hire the agents necessary to really take a bite out of it.
Nonetheless, I think if we started right now we would see an
immediate effect on the number of illegal aliens in the United
States.
The way I usually articulate it is what we can have is
attrition through enforcement. About 4- to 500,000 illegal
aliens either go home on their own, get deported or get green
cards actually each year. So if we can increase that number to
maybe 6- or 700,000 and dramatically reduce the number of
people coming in, the problem would take care of itself over
time.
Now there might be some long-term residents who have been
here a long time. We might want to look at some kind of amnesty
after we get a handle on enforcement.
Mr. Flake. So amnesty you are in favor of?
Mr. Camarota. Well, I said we might want to consider it,
after we show that we are enforcing the law, the immigration
law is back in business, the border is being policed properly
and so forth, we can certainly consider that, yes, as a way of
clearing the decks, tying up loose ends. But you certainly
don't start with an amnesty when you haven't taken even the
most elemental steps.
Mr. Flake. I am puzzled as to why you believe it would take
so long to start enforcing it. We have the technology now where
any employer could know if a Social Security number issued is
valid or not. We could do that tomorrow. I have had this
software demonstrated in my office. We could do that tomorrow.
We could have--your estimate is some 3 million that are
working that have taxes withheld on their behalf. I would
submit that number is far, far, far higher than that, given the
amount of money that is collected that is in the Social
Security system. We are told that it is 10 percent of the
surplus we are running is money paid into dead accounts or
fraudulent Social Security numbers.
That says to me it is a lot more than 3 million. I think
the number is a few hundred, 150 billion or so over a decade or
a decade and a half that has been paid into dead accounts.
So we have the technology, we just don't have the will
right now to enforce it at the employer level. I am just
wondering if we did enforce it and send them home, enforcing
the law right now, an employer would have a $10,000 fine per
occurrence if you hire somebody now knowingly that has a
fraudulent Social Security number, what would you then
recommend? Those who are unemployed here now be forced to take
those jobs that they currently have, or do we have a 5-year
plan like the Soviets used to where you move employees, like
they have in Cuba today, where you move the unemployed to those
systems? If you are an unemployed school teacher in Maine,
there is a job for you in Yuma picking lettuce. What do you
envision there?
Mr. Camarota. The way the labor market works if there was a
reduction in supply through labor enforcement through the law
then employers would have two choices, they could either pay
more and treat their workers better and offer more benefits if
they couldn't attract workers at their current pay rate, or
they can mechanize and invest in labor-saving devices and
techniques.
To give you an example, the sugar farm, sugar farming in
Florida was once done mostly by immigrant labor, but more
recently they simply got rid of all of that labor and they
mechanized it. There are machines, and they are used in other
countries, like Australia and Europe, to pick a lot of fruits
and vegetables. But we don't have them here because the
Government gives----
Mr. Flake. If you look at the statistics from the Bureau of
Labor Statistics over a 10-year period from 2002 to 2012, they
see percentage increases, for example, registered nurses, 27
percent increase; post-secondary teachers, 38 percent; retails
salespersons, 15; nurses aides, orderlies and attendants, 25
percent increase. We simply don't have the demographics to
support over the next 10 years that kind of job growth.
It is--I mean, you can argue if the demographics are this,
but we simply don't. But you are arguing for fewer legal low-
skilled workers to come in. You make that argument in your
testimony.
How do you reconcile it? We just have to mechanize and
change or what?
Mr. Camarota. Pay unskilled workers better. I think one of
the most serious problems we face in this country is all the
unskilled workers who make so little. I would like to see
enhanced increase in the minimum wage. I would like to see fair
labor laws enforced more vigorously. But it seems to me you
can't constantly add to the supply of labor at the bottom of
the labor market and then bemoan the fact that people are
discouraged workers, that work doesn't pay. That policy,
current immigration policy is directly contrary to the idea
that we want the poor in the United States and the working poor
to do better.
Mr. Flake. Thank you, Mr. Chairman.
Mr. Hostettler. The Chair now recognizes the gentlelady
from Texas for 5 minutes, Ms. Jackson Lee.
Ms. Jackson Lee. Thank you very much, Mr. Chairman.
Mr. Camarota, I think that we can--I see it in my visioning
that we have an opportunity for common ground and
collaboration, because, frankly, it would be remiss of me, it
would be certainly dishonest not to suggest that I am an
enthusiastic supporter of increasing the minimum wage. In fact,
I would like to welcome you in a meeting with the leadership of
this House to sit down and talk about putting the minimum wage
legislation on the Floor of the House almost immediately. It is
valuable.
I think this hearing is important. I thank the Chairman
very much for this hearing, because I have listened to the
questions of my colleagues on both sides of the aisles. The
good news is, Mr. Chairman, that the questioning is valid, and,
if you will, issues are being raised on both sides of the
aisles about who is actually the necessary scapegoat for a job
recession and the need for recovery.
I think this hearing may suggest, as I did in my opening
remarks, that this needs to be a topic to be discussed by a
number of oversight Committees throughout this Congress, both
the House and the Senate, because we have lagged behind in job
creation. That is the crux of an immigration hearing today,
that we have lagged behind in job creation.
At the same time that prospectively, if there was a sort of
engine into the economy, we need to look for a workforce or
have a viable workforce here. With the demographics presently
in the United States who happened to be maybe nonimmigrant and
nonundocumented, we don't have the employee base if, for
example, an economic engine was to immediately start up and
look for people of varying types of skills.
I made the point that I was just recently at the offshore
technology conference, one of the largest energy conferences in
the world, held in the energy capital of the world, we like to
say, Houston, Texas.
The bemoaning there, Mr. Camarota, was that we did not have
that core group of educated, trained chemists and other
scientists and geologists--an unfortunate statement to know
that geology has been taken out of high schools--we are not
preparing the workforce of the 21st century.
If for example that industry was to grow and develop as I
hope that it does fairly and balanced and with environmental
protections and they look for a whole new level of workers,
which could come from the trained workforce that we hope that
we are producing out of America's secondary schools and
colleges, they would not be there.
In fact, I would say to you, even though this is not the
Education and Workforce Committee, shame on us because we are
actually not preparing Americans for the jobs in the 21st
century.
Let me just say to Mr. Holzer, you were taking an enormous
number of notes, but let me pose a question for you, because I
think your information is particularly important.
The Ranking Member of the Full Committee asked the question
that we talk about, naturalizing immigrants, are we talking
about those who have legal permanent residency status right at
this point? Are we talking about undocumented? So we need to
clarify what we are talking about. I would like you to make
that point first, because certainly there are immigrants in
this country who are first-generation who happen to be citizens
because they have gone through the process.
The other thing is, speak to this issue of job creation and
the plight that America faces with a diminishing base of
potential workers and the devastation that would occur to
America potentially if we did not have an increasing wave of
workers. You might want to use as a backdrop countries like
Germany, who had the closed door policy to immigration. If you
have any backdrop information on that.
You didn't mention it in your testimony, but I heard you
say something about youth who took other opportunities,
unfortunately which they didn't. But you are an American. Try
to comment on this question of discrimination and the fact that
there are populations in the United States that have been sort
of thwarted of their opportunities, and they happen to be
American, because of discrimination.
So I would appreciate your making an assessment on those
points and the points you think you may have left off the
table.
Mr. Holzer. Thank you. Let me try to address the issues you
have raised. First of all, the issue is that there are very,
very different groups of immigrants, some legal, some illegal.
The niches they fill in the economy are really very different.
To lump them all together is an enormous mistake, by the
numbers that Mr. Harrington cited.
Over one-fourth of the newly-arrived immigrants in the last
4 years are college graduates and they are often filling jobs
in science and engineering, in some parts of health care like
nursing, where right now employers really are having difficulty
finding workers at the low end, both among legal and illegal
immigrants. There are jobs not only in agriculture.
Ms. Jackson Lee. We shouldn't be happy with that though.
Mr. Holzer. I agree with that. That is an important
problem. I acknowledge what you and I agree is that the
solution to that problem is not to cut off immigrants. It is
changes in our immigration policies that open those doors and
allow more Native born Americans to gain those skills so we
would be less dependent on that immigrant flow.
Similarly, even at the bottom end of the economy, not just
in agriculture but in some parts of health care, we have great
difficulty finding people to be home health aides, nurse's
aides, et cetera. Again, we depend on the immigrants there,
sometimes illegal, frequently legal, to come in. So, again, to
lump all those different categories together I think is very
problematic.
The second issue you raised, I believe, was about education
policies and how do we open more of those opportunities to
workers, and especially in the context of a retirement issue,
of baby boomers retiring in very large numbers. There, again, I
think there is a wide range of ways in which our labor market
will adjust to the retirement of baby boomers. Some of the
earlier panelists have alluded to that. There will be
increasing of wages in some sectors to draw more workers into
those sectors, there will be increasing uses of technology, et
cetera.
But I think to close to door on immigrants in a time period
when we are facing these potential labor shortages would be an
enormous mistake. I don't think the labor market on its own,
especially in areas like health care, where there are cost
pressures containing and constraining the ability of providers
to raise wages to the level that would draw in a lot of Native
born workers.
We will be quite dependent on foreign workers and certainly
at the high end, not only in nursing but in science and
engineering. Those will be very, very important sectors in
which the flow of immigrants, once the baby boomers retire, I
think will be very critical to the overall health and economy.
So I think shutting those doors----
Ms. Jackson Lee. You add the European model where
immigration has been slowed or limited or blocked. Do you have
any understanding of that?
Mr. Holzer. I haven't looked closely at that model, but I
think it is correct that part of the inability of some of those
sectors in some of those countries to attract workers may be
related to their restrictive immigration policy.
Finally, I want to speak to this issue of the real problems
faced by Native born minorities, low-income folks of all racial
and ethnic groups who want and lack opportunities in this
country. In fact, I spent my entire career doing research on
those issues and worrying about those problems.
I think, overwhelmingly, the economic literature suggests
that if there is an adverse impact of immigration on those
groups, that it is small potatoes compared to the wide range of
barriers these groups face. Many changes in the economy in the
last 20 years that have contributed to their disadvantage--
everything involving all kinds of new technologies, new trade
patterns, the shrinkage of the institutions that traditionally
have protected those workers like minimum wages and collective
bargaining.
I do think that many of these young folks do lack
educational opportunities. They lack opportunities to get
quality preschool. They lack opportunities to get quality K-12
education. In many cases, they either don't develop the skills
necessary for higher education or they lack the financing. We
haven't allowed Pell Grants to grow at a rate at which the full
number of people who could benefit from higher education would
be allowed to afford it.
As you indicated, discrimination does remain a problem.
Study after study does document the continuing presence of
discrimination in housing markets in our neighborhoods as well
as in labor markets.
So when you look at that full range of issues, there are
things that could be done on each of those to open up
opportunities, to draw more of those workers into the
workforce, to improve their skills and their ability to
compete. To focus so intensely on immigration is simply to be
barking up the wrong tree or a very limited tree in a forest of
many other causes.
Mr. Hostettler. I thank the gentleman. The gentlelady's
time has expired.
Ms. Jackson Lee. Thank you.
Mr. Hostettler. Just to clarify for the Subcommittee, that
is the only tree we bark up in this Subcommittee is
immigration. While those other issues are important, they
happen to be the jurisdiction of other Committees.
The Chair recognizes the gentleman from California, Mr.
Lungren, for 5 minutes.
Mr. Lungren. Thank you, Mr. Chairman.
I came to Congress in 1979 and volunteered to serve on the
Immigration Subcommittee because I was from southern
California. I saw the impact of rampant illegal immigration but
didn't have all the answers. I knew there were problems out
there and attempted to try to bring some leadership to the
Congress.
I was the Republican floor manager for Simpson-Mazzoli, was
one of the authors of the employer sanctions portion of that as
well as the other half of that.
I am as disappointed as anybody that employer sanctions
haven't worked, haven't been enforced by Democrat or Republican
Administrations. My sense is there is a failure of the will of
the American people to support it or there has been thus far,
in part because there is a feeling among the American people
that we can't get all our jobs filled with Americans.
So I would just like to ask the panel this--Look, I came
here in 1979. We had illegal immigration at the time. We had a
flow across our southern border. I investigated and discovered
we had a flow across our southern border at least for a hundred
years. It has been legal or illegal, depending on whether we
had a program for it or not.
In the number of years since I first came here, I have seen
the impact of immigrants, both legal and illegal. But a large
number of illegal immigrants are now in areas they weren't
before, the construction industry, and areas of the country
they weren't in before.
When I was here before I said this is the impact in
southern California, in the Southwest, you may see it later in
the country. A lot of people didn't want to be concerned about
it, because they never thought it would happen anywhere else. I
defy anybody to go to any place on a construction site in most
major metropolitan areas and not realize what language is being
spoken, to go to landscaping crews, to go to hotels, to go to
restaurants, et cetera.
I mean the fact of the matter is, in my judgment, we rely a
great deal on this immigrant labor.
My point is--my question to the panel is this, number one,
do you think it is reasonable that we could cut off the major
flow of illegal immigration in this country, that being our
southern border, without any adverse economic consequences to
this country?
Number two, do you really believe that all the jobs that
are currently taken by those who are here illegally would
readily be taken by American citizens?
Thirdly, if you do believe that they would readily be taken
by American citizens, at what economic enticement would that
come?
Dr. Camarota.
Mr. Camarota. Yes, I most certainly believe we could
enforce the law at a reasonable cost over time. I think that
the economy would benefit, low-wage workers would benefit, the
rule of law would benefit. American taxpayers would benefit.
One of the things about----
Mr. Lungren. Could I ask you a question?
Mr. Camarota. Sure.
Mr. Lungren. Where would you get the people to work in
agriculture?
Mr. Camarota. I think that you would get--what would happen
is that you would see significant gains in productivity. They
would move to like dry-it-on-the-vine agriculture like they use
in Australia. They would buy the machines to pick the lettuce.
Mr. Lungren. So mechanization rather than workers?
Mr. Camarota. Well, I think that you attract workers to
that by paying more, employing them year around, giving them
benefits, treating them decently. So with those two things,
gains in productivity as well as improvement in wages and
benefits and working conditions, and the beauty of it is we
have no fear that it will spike inflation because unskilled
labor is such a tiny fraction of total economic output in the
United States that even if wages for people at the bottom went
up a lot it wouldn't mean anything even in the area of
agriculture. The price of a head of lettuce, only about 15
percent of it is based on the price of the guy who actually
picks it.
Mr. Lungren. Where would we find the folks who would be out
working in the fields? Where would they come from?
Mr. Camarota. As I indicated, you could attract Americans
and legal immigrants in the United States by paying them better
and treating them better.
Mr. Lungren. But realistically, tell me where they are
going to come from. In the 1930's and 1940's we had breaks at
schools so school kids would go out and work in the fields. The
college kids would do that. The folks from the city would go
out and do that. We had a lot more people working there.
I am trying to figure this out realistically because I am
frustrated by this. I hear academics coming up here and telling
me it will not have any impact if we cut it off. I see a
Congress that refuses to come up with a guest worker program. I
see a refusal of the Government to enforce employer sanctions.
Frankly, at the end of this period of time things are worse
than they were before. I hear people saying all we have to do
is raise wages and we will have people flooding to the fields
to work there. I would like to see that, but I really have
skepticism about that happening. Where are they going to come
from?
Mr. Camarota. Well, there are hundreds of thousands--
whether you might not realize it--of Native born Americans who
work in agriculture. There are also legal immigrants who work
there, though it is true that a very large share of people who
work there are illegal aliens.
Nonetheless, there are huge productivity gains. Let me just
give you an example. When they ended the Bracero program, which
was our old guest worker program, the tomato farmers actually
testified before Congress, if you end this program we are out
of business, there is no way.
What happened when they ended that program? They mechanized
and productivity increased manyfold. Their profits went up.
Even during the Depression there were farmers saying we can't
find anybody to do this labor.
What they have difficulty finding is people who will do
very hard jobs when they don't want to pay anything. Consider
coal mining is a perfect example. The job pays well, has
benefits, and it is all done by natives but it is a miserable
job and also increased our productivity.
Mr. Lungren. But very--much less in numbers of people
working in the coal mines than we had before because of
mechanization?
Mr. Camarota. That is exactly right. Good analogy, I like
it.
Mr. Lungren. So we will not have jobs taken by Americans;
what you will do is eliminate those jobs?
Mr. Camarota. There will be fewer jobs.
Mr. Lungren. Right.
Mr. Camarota. Pay better, have more benefits and the rest
would be taken care of by productivity. I like your analogy.
That is exactly what happened to coal mining.
Mr. Lungren. That is one reason why people wonder why their
tomatoes don't taste as good as they used to. It's because we
developed tomatoes that have a tougher skin on them that could
be mechanized--picked by mechanization instead of by
individuals.
My point is, though, if we are talking about jobs, what you
are really saying to me is that we are going to eliminate a
good number of those jobs so we won't have the need for this
immigrant labor, but they are not going to be replaced in like
number by American jobs.
Mr. Camarota. But there will be fewer people competing for
those jobs because immigration would be reduced. So the jobs
that would remain would pay better, be here year round, have
benefits, and be the civilized kind of work that would attract
Native born Americans or legal immigrants as well.
Ms. Jackson Lee. Would the gentleman yield?
Mr. Lungren. I wish I had time to yield.
Mr. Hostettler. The gentleman's time has expired. But if
the witnesses are willing, I would like to turn to a second
round of questioning, if there are no conflicts with schedules
on the part of the witnesses. We appreciate that.
We will now turn to a second round of questions. I will
start with 5 minutes.
Dr. Holzer, your response to an earlier round of questions
was very enlightening to me and it actually answered a question
that I had even before I had to ask it. But I am a registered
professional engineer in the State of Indiana. My wife is a
registered nurse in the State of Indiana.
You have mentioned that as a result of cost containment
that, well, I will have to get the record to see exactly what
you said, but I think, in essence, that as a result of cost
containment measures, it may be in fact that future--especially
in the health care industry--that it may be in fact immigrants
that take a preponderance of those jobs in the future.
In fact, we understand now that we are going to be
considering a provision in the supplemental bill that will add
50,000 new legal permanent residents, potential permanent
residents for the nursing field, new visas that will be handed
out. The reason being--while economics was not my strong suit--
my understanding of economics to a great extent has to do with
cost containment overall, in that an individual or an entity
will pay only so much for a given good or service.
So the point that you made, and it was made earlier with
regard to the fact that the current trends in immigration with
regard to the type of jobs that they take, and therefore, the
magnitude of the wages that they earn and the amount of money
that they pay in to Social Security, you mentioned in your
testimony that in order to--you didn't say this, but I am
extrapolating--in order to offset that, that in fact there is
going to have to be an influx of much larger immigration
numbers in the higher wage level categories. You mentioned,
actually, science and engineering and health care once again.
So given that the trend of your testimony is that we will
have to allow for immigration purposes--and not necessarily
illegal immigration purposes, as is the case with the bill that
is going to be considered in the House tomorrow--but we are
going to have to significantly increase the number of
immigrants, visas available for immigrants, to take jobs such
as in science and technology and health care that Americans
won't do because of cost containment measures.
I assume that what you are saying with cost containment
measures is that we will not be able to pay health care workers
and scientists and engineers wages sufficient for native
Americans to go into those fields.
Given the fact that there is discussion of a guest worker
program that some of the Administration has said, we are going
to match every willing employer with every willing employee,
meaning in the world. Every willing employee in the world. That
if we are talking about moving from melon pickers and apple
pickers and roofers and the like to registered nurses,
scientists, engineers and everything else, theoretically
speaking, of a guest worker program and the trend of your
testimony, aren't we saying that Americans will compete for
wages, cost containments, however you want to put it, for wages
with the rest of the world? That is my first question.
Will we not be competing with--will our children and others
be competing with every other engineer, engineering graduate,
scientist, nursing graduate in the world, and, secondly, is the
fact that a significant portion of the rest of the world has a
lower standard of living than us, making it likely--and your
testimony alludes to it somewhat--isn't it likely that those
other people are going to be willing to take much less in wages
and salaries to meet the requirements of the employer in the
United States?
Mr. Holzer. Mr. Chairman, there are several different
strands to your question. I will try to disentangle them.
Mr. Hostettler. There are actually two questions. First of
all, isn't the United States worker in the future, with the
guest worker program that says--and then this is theoretical--
every willing employer with every willing employee, is that not
going to be the case with American workers, native workers
competing with every other worker in the world? That is the
first question. Not just my strand. Is there going to be
someone else to compete with?
Secondly, given the fact that 90 to 95 percent of the rest
of the world has a lower standard of living than the United
States, isn't that going to depress wages for those scientists,
engineers, nurses, thoracic surgeons, cardiologists, whoever,
in the health care industry in the future?
Mr. Holzer. I think there are different issues that play
out differently in different sectors. The amount of
competition, coming from either guest workers or from foreign
workers varies a lot from field to field.
In health care, the demand for work to be done here in the
United States is so strong that I think, again, it varies. In
some parts of health care, such as nursing, the issue really is
skills and whether or not domestically born students are going
into those fields and developing those skills. The other
areas--the bottom end of health care doesn't require a lot of
skills, but their wages and benefits are what attract workers
and keep them in that area.
I don't believe that--. The rise in wages that would be
necessary to balance that market, I think, would be quite
large. I think guest workers, immigrant workers will help to
meet that demand, which will be very strong. If you look at
projections when baby boomers retire, the increase in demand
for health care would be very dramatic. It would take large
increases either in the supply of workers or in their wages to
meet those demands. So I am not worried in that sector about
Americans being crowded out or their wages being competed down
because I think the demands are so strong.
Mr. Hostettler. Excuse me, Dr. Holzer, I don't mean to
interrupt. But you said in a previous question that cost
containment measures are going to turn to the need for
immigrant workers over Native born workers. I mean, that is in
essence what you said, and now you are saying that won't be the
case?
Mr. Holzer. I think the demand will be so strong in that
sector that--yes, I think cost containment is important because
I think--when economists talk about the market equilibrating
and wages rising to close these shortages, the increases in
cost that would be necessary to meet that entire demand will be
very large when you look to the future when the baby boomers
are retiring. So I think it will not be possible to do that
strictly through domestic workers because the cost increases,
the wage increases necessary would be enormous. So there I
think there will be a need for immigration and other sources of
labor to help out, meet those needs.
In other areas, you talked about Americans competing with
workers around the world who earn lower wages, and that
competition can occur in a lot of ways. It can occur through
exports or imports of goods and services. It can occur through
outsourcing. And I think, in some sectors, for instance,
wherever it is possible to digitize the work that is done,
potentially that work can be done overseas, and those workers
in those sectors will face this competition. The estimates I
have seen so far suggest that could be 10 to 15 percent of jobs
in the United States, potentially, on the high end could face
competition from engineers and computer programmers and others
in India and China and other parts of the world. But in many,
many other sectors there is a strong home bias. The work has to
be done here; construction, health care, education, most of our
domestic retail trade and entertainment services are all done
here. So the amount of competition that will come from foreign
workers who remain abroad in those sectors will be much less.
So there is this potential competition, but I think it does
vary greatly from one field to the next. And this fear that it
will depress American wages overall I think is not probably
well founded.
Mr. Hostettler. Excuse me, just one more thing. They will
be done here, but they won't necessarily need to be done by a
Native born worker.
Mr. Holzer. If the work remains here, that is right.
Mr. Hostettler. Thank you.
The Chair now recognizes the gentlelady from Texas, Ms.
Jackson Lee.
Ms. Jackson Lee. Thank you very much.
Mr. Camarota, could you clarify, did you include
naturalized citizens in your study?
Mr. Camarota. Unless I otherwise--and there are places
where I talk about illegals separately--I include all of the
foreign born, and that includes legal permanent residents,
illegal aliens, guest workers and naturalized U.S. Citizens.
Ms. Jackson Lee. Out of the discussion that we have been
having here today, would you care to alter that potential
analysis? Let me try to understand.
You don't take away from the very underpinnings of the
founding of this country, which--besides unwilling slave labor
that spent 400 years unpaid and building this Nation from its
agricultural to its industrial to a certain extent--mostly it
is agricultural, but certainly it is hard labor building
buildings, et cetera. We just recently discovered that this
Capitol, U.S. Capitol where we debate, was built on slave
labor. But looking at the immigration of the late 1800's into
the early 1900's, you are not suggesting that that was not a
good phenomenon for America where these immigrants came in and
helped build the population and ceded themselves into the
American fabric of society; is that what you are suggesting out
of this study?
Mr. Camarota. Well, my study is trying to look at what is
the impact on employment patterns for natives from immigration.
So the reason one does that is hopefully to provide some
elucidation about--an insight into what a policy might be based
on what has happened so far. So that is all this study does.
Ms. Jackson Lee. You are taking a historical perspective of
looking at the immigrants, the Irish, the Italians and others
who came, late 1800's into the 1900's; do you take that as a
backdrop? Because, in essence they came--not undocumented, but
they were not citizens as they came. They eventually became
citizens, but they went into the workforce. Was that a negative
impact?
Mr. Camarota. This study isn't focused on that. But my
reading of the historical record is that that immigration,
including when my family came to America, absolutely did
adversely affect American workers at that time. Specifically
what happens, if you look at the history, is that it is only
with the cessation of the European immigration from World War
I, 1914, and then also the restrictive legislations of the
1920's, that then you get the great migration of African-
Americans out of the south and they begin to take industrial
jobs, and that has enormous implications for the social
mobility of that group.
So I would say that that immigration--including when my
family came--came at the expense of unskilled workers in the
United States, especially African-Americans, absolutely. That
was an inevitable consequence of dramatically altering the
supply of labor then, and I think we are seeing some very
similar patterns today.
Ms. Jackson Lee. Well, I might concede that there were jobs
being created in the north, but I would say that that migration
was complimented--or that may be too nice a word--was motivated
by the increase of Jim Crowism and Klanism in the south to move
people--out of survival, to leave the south to be able to
survive.
But I do want to ask you to clear up one other point as
well. You called--in the course of the English language
sometimes--you cited work as being uncivilized, and I just
wanted to make sure that you got a chance to--you said they
would be able to go into civilized kinds of work. Are you
trying to suggest that the agricultural industry creates
uncivilized kinds of work? And would you comment on the fact
that the agricultural industry's utilization of certain types
of population also generates into the food costs that we
experience here in the United States, which most Americans have
become accustomed to?
Mr. Camarota. What I meant to say, so that you will
understand, is that jobs in agriculture often are constructed
in such a way that the worker has to work very long hours in
very difficult conditions. You know, the living conditions are
poor; there is one toilet for 30 people. It is not supposed to
be that way, but that happens, partly because you have added so
many workers to the supply of labor that it makes it easier for
employers to get away with that.
Now, in terms of price, this actually has been studied
quite a bit, and the fact is that the price of labor in
agriculture has very little to do with the price of produce----
Ms. Jackson Lee. Thank you very much. Thank you for
clearing that up.
Let me go to Mr. Holzer.
Mr. Holzer, does that equate, and particularly on the issue
of the agricultural question of poor job conditions, which in
this Committee we have tried to work on in a bipartisan
manner--I offered legislation that deals with
institutionalizing housing and health benefits. Certainly, that
is a challenge, but how do you respond to Mr. Camarota, that in
fact it is uncivilized or it is not good working conditions, so
that is why we throw that population over there, and if you
gave housing or health care, you would see throngs of Americans
running over into the fields to provide assistance to the
agriculture industry?
Mr. Holzer. I think that is unlikely, that the supply of
labor----
Ms. Jackson Lee. You are not critiquing him by suggesting
that we shouldn't make better work conditions in the farm area.
Mr. Holzer. I completely support legislation to improve
working conditions, simply out of issues of fairness for those
who work in that area.
Part of the reason that wages have declined for less
educated Americans has to do with the fact that we have
weakened the institutions that traditionally protect those
workers, everything from minimum wage laws to collective
bargaining and other institutions as well, and I believe those
institutions should be strengthened. Nevertheless, having said
that, I don't think that the supply of domestically born labor
to that industry would be very responsive. It would take very,
very large wage increases over a long period of time to start
changing those patterns; I simply don't see that happening any
time in the short term. If you were to cut off the supply of
immigrant labor to that industry, there would be impact on
costs certainly in the short run and on the ability of those
firms to compete; it would not be very positive. And I don't
think it would be a very attainable solution.
So, yes, I think, out of fairness, those conditions should
be raised, but that should be done separately from cutting off
the supply of available labor; I don't think Americans will
want to take them.
Ms. Jackson Lee. Just for a moment, Mr. Chairman.
Do you know of any data where the agricultural industry has
reached out to American workers? I mean, you are saying you
don't think they would come. Do you think it is because we have
not tried to recruit them, or do you have any kind of data or
recent studies that you have looked at that says that they are
just not moving in that direction, they just don't get the
youngsters--whether they live in rural or suburbia America--to
say, I think I want to go out to California and work in the
farm industry?
Mr. Holzer. I personally haven't seen any formal study of
the supply of labor to that sector. It just runs counter to my
sense of these broad trends in labor markets where workers, and
especially young people, look for future opportunities, and
they look toward the sectors that are more dynamic, most parts
of the service sector, the higher end of manufacturing,
construction, et cetera. And I think the image of agriculture
in the eyes of the vast majority of Americans is of a sector
that was important in the past, not in the future. And I don't
think very many young people today are looking there for their
future employment opportunities.
Ms. Jackson Lee. Thank you, Mr. Chairman.
Mr. Hostettler. The Chairman now recognizes the gentleman
from Iowa, Mr. King, for 5 minutes.
Mr. King. Thank you, Mr. Chairman.
I have a pile full of notes here from the conversation that
has been very interesting. And many of them I would like to
comment on, but first, I would like to direct a quick question
to Mr. Camarota, and that would be, have you taken a position
on if there is such a thing as too much immigration, and if so,
how much?
Mr. Camarota. Obviously, there are a lot of things to
consider. But from the context of this discussion, I think that
we should look very hard at what its impact is on the poorest
Americans. And right now, I think, what the available evidence
suggests, common sense and economic data suggests that it is
adversely impacting low-income Americans. And therefore, if for
no other reason, we might argue questions of assimilation, do
you want to be a nation of 600 million people? All of these
questions matter. But it appears to me from the context of this
that the impact on the poor is critical, and the available
evidence suggests that, right now, it is too much.
Mr. King. And so would you settle on a number? Because we
are going to have to set some policy in this Congress, policy
that produces actually a number, which predicts a number.
Mr. Camarota. I kind of come down in terms of--enforcement
in terms of illegal immigration and on legal immigration in
terms of green cards, more or less where the Jordan Commission
came down, eliminate the more extraneous categories. The late
Barbara Jordan, who chaired the commission in the 1990's----
Mr. King. About 450,000?
Mr. Camarota. Yes, something like that.
Mr. King. You have taken a position, and I think it is
important that all of us who have discussed this issue take a
position on whether there is such a thing as too much
immigration, and if so, how much.
But as I listened to this conversation across here, a
number of times, I have heard Members make the statement, and
also witnesses continually before this Subcommittee, that there
are jobs that Americans won't do, jobs that Americans won't
take. And of course, there was disagreement on this subject
matter.
But I would like to illustrate it this way, and that is, I
may not be able to hire Bill Gates to mow my lawn every week; I
would not have enough money to do that. And I don't have enough
money to hire Bill Clinton to mow my lawn every week, but
someone does. He would mow it every week if you put enough
money out there on the table for him. He would cut your grass,
and it would be good press for him, and you would have a nice-
looking lawn. And so I think, within that context, you can
understand that Americans will do this work; it is a matter of
whether the wages and benefits are there. Because people all
around this world are rational individuals, and they know--
employers know and employees know--that labor is a commodity,
like corn and beans and oil and gold, and it is in the
marketplace. And the value of that is established by supply and
demand. And one of those examples would be, I read a study some
years ago about Milwaukee, where, as it was referenced, the
immigration--I think you referenced it, Mr. Camarota--African-
Americans moving up from the South to the North. And there was
an area of Milwaukee that was 6 blocks by 6 blocks, 36 square
blocks, without a single adult male that was employed. This was
about 7 or 8 years ago that I read the study. But they had
migrated up from the South to take the good brewery jobs in
Milwaukee. And as the breweries got automated, then those jobs
disappeared. Those families stayed there. Now, it was a
rational decision because the benefits to stay there weren't as
great as the benefits to migrate and learn a new skill; that is
rational people living in a place.
But another thing is, labor is portable, and it was
portable as demonstrated by that example, in the 1930's, when
they moved forward. And where the jobs are and where the wages
are and where the benefits are, the people will follow. They
will make rational decisions.
I would submit this, is that we have a huge jobs magnet in
the United States, and it is rational for employers to seek to
hire illegals for all the reasons that we know, low wages, no
benefits, no litigation risks, no unemployment claims. And if
you can hire them cheaper, then why wouldn't you do that if
there isn't going to be employer sanctions, which at one time,
it did work in this country, and today there is no will on the
part of the Administration to enforce them.
So I have looked at that from this perspective. And I am
going to direct my question to Mr. Reindl because he is really
the subject of this, the person I am trying to help; and that
is, I would like to shut down the current on this
electromagnet, the jobs magnet that we have, not dramatically,
not at once, not export 12 million people overnight, but change
the economic decision in a rational way so we can incrementally
address this situation that we have.
So I have drafted a piece of legislation, and I have it
here with me today, and it is called the Real IDEA Bill, the
Illegal Deduction Elimination Act. And what it does is it
removes the Federal deductibilty for wages and benefits that
are paid to illegals. We have the Instant Check program, as was
addressed by Mr. Flake a little earlier. That means that an
employer would be--there is not an excuse any longer for an
employer to, knowingly at least, hire an illegal, at least as
far as their information in front of them is concerned. So we
give them a safe harbor, if they use the Instant Check program,
but then a 6-year statute of limitation, so the IRS can come
in, do the audit, and if they paid say $10 million out to
illegals, those that are on the books, then the IRS can levy
penalty, interest and then the back tax liability that would
come to, on that $10 million, roughly $5 million to $6 million
dollars out of the $10 million.
Mr. Reindl, would you speak to whether that would help your
business?
Mr. Reindl. I think it would, as long as there is
enforcement. If you pass another piece of legislation through
and the law-abiding businesses are going to be forced to do
another extra burden on them, you are not going to stop the
guys hiring illegal aliens because they don't want to do any
paperwork. So I think there should be a piece of legislation
that goes after these guys that are just breaking every law. If
they are going to hire an illegal alien, they are not going to
do any paperwork. So really, that is my point.
And you know, they are saying Americans don't want to do
the jobs. I mean, pay me $50 an hour and I will go and pick
apples all day long, I don't have a problem with that.
One of the reasons why I have been able to stay in business
was because we are one of the most high-tech shops on Long
Island. We have implemented machines. As Mr. Camarota was
saying before, that is important. That is the only way I
survived in the last 10, 15 years. That is really the key. Yet
you have to increase technology. It is supply and demand. If
there's a limited number of people, you have to pay them more.
When I am real busy, when the shop is real busy, I will hire
someone for a while. I will pay them anything they want just to
get the work out. That is the way it is.
So I think that the main problem is the enforcement of the
law, and there is just none.
Mr. King. Thank you, Mr. Reindl.
I yield back.
Mr. Hostettler. The Chair will now recognize the gentlelady
from California, Ms. Waters, for 5 minutes.
Ms. Waters. Thank you very much.
Gentlemen, there has been very little discussion about job
training in America, which I think is extremely important to
helping natives be prepared for jobs and to get jobs. I am
particularly focused on two things. I would like to ask if any
of you have ever heard about a project where inmates were doing
reservations for an airline a few years ago, have any of you
ever heard about that, where inmates were doing--I think it was
airline reservations? Have any of you heard about any of the
jobs that were being done by inmates with new technology?
Mr. Camarota. Customer service jobs, yes, I have heard of
that, sure.
Ms. Waters. Do you know that the same inmates who perform
some of these jobs while they are incarcerated cannot get those
jobs when they get out of prison? Are you aware of that?
Mr. Harrington. Excuse me, ma'am. If you would like, I
recently spent some time out at the Youth Opportunity Movement
program out in Los Angeles, and one of the major problems they
have for particularly young men coming out of the camps, who go
through some training programs, is access to employment after
completing the training is very limited because they have
felony records, and employers are very unlikely to hire them in
many industries, including construction and manufacturing.
Ms. Waters. Well, that is part of it. And I suppose what I
am trying to bring to everybody's attention is--and I wish I
had an exact description of the reservations project that was
being handled by inmates--to point out that if they can do the
job while they are incarcerated, they can certainly do it when
they get out. And I think we have to find a way by which to
open up job opportunities for people who serve their time. I
think there are ways to do that. And I think that when we look
at whether or not Americans are available for certain jobs,
this is one area that must be looked at.
The other is job training. Nursing, I think it is
absolutely unconscionable that we think that the only way that
we can get nurses is to import them from other places. First of
all, we have not given enough support to the training and
development of RNs or LPNs in this society. We have RN programs
in community colleges with little support for people who are
trying to be trained. Many of these jobs could be accessed by
single-parent families, but they need child care support. They
need transportation support. There are some programs, such as
one in San Antonio, that is giving a lot of support to train
RNs, and they have been successful at it.
I am very much interested in job training for Americans,
for natives, for all these young people that you are talking
about. I don't mind competition, and I don't mind the young
people competing with legal immigrants, but I do mind those
industries, such as Wal-Mart and some of the others, who hire
undocumented--to hire them where they are denying opportunities
for natives to have those jobs. And I think we have to just own
up to this stuff. I mean, basically, without even any empirical
data, we basically understand and know what is going on, and I
think there are honorable ways by which to address all of these
problems. And so I would like to see some information about job
training for natives factored into this discussion.
Have you given any thought to this, Mr.--I can't see your
name from here.
Mr. Holzer. Yes, I have. And I would agree with you that it
is not an either/or proposition----
Ms. Waters. That is right.
Mr. Holzer. And in fact, certainly during the late 1990's
when I was at the Labor Department, we were using the moneys
generated by H-1(b) visas. We were taking that money directly
and using it to finance education and training opportunities
for Native born workers in many of the same areas in which
shortages occur which to me seemed a much more sensible way to
address this issue than to simply cut off immigration and
pretend--we are talking about leveling the playing field and
allowing American workers both the skills and the incentives to
compete with those foreign workers. And I think we can do
vastly more of that.
There are many job training programs that are cost-
effective, that have positive impacts, the Job Corps, the
Career Academies. We know the Pell grants are a successful way
of opening the doors to higher education to many of the same
fields you mentioned, like nursing, LPNs, RNs, et cetera.
Funding for Pell grants has not kept up anywhere near the
potential demand for those among people who could use them. So
I support your notion, and certainly, we should be investing a
lot more than we are investing----
Ms. Waters. What do you think about tax credits for some of
the industries that are job intensive, tax credits that really
work for them? Because I really do believe that, to the degree
that you are able to train, particularly unskilled workers, in
the workplace, in the situation where they would be working,
that you are able to get more people who are trained for real
jobs. What would you think about tax credits for job training
in order to get more people into the work force who are
competing or would like to compete for jobs that are being
given to undocumenteds?
Mr. Holzer. I support tax credits for training of entry-
level workers. We want to be careful not to create enormous and
expensive windfalls. We don't want to be subsidizing the
training that is already occurring, but we can certainly
identify entry-level workers who get very little of the total
training that is right now done in the private sector, and I
think there are many creative ways in which we could give tax
credits as we do for R&D spending. We could have tax credits to
subsidize new training in those sectors that would likely be of
limited expense and cost-effective as well.
Mr. Hostettler. The gentlelady's time has expired.
Ms. Waters. Thank you very much.
Ms. Jackson Lee. I would ask that the gentlelady have an
additional 30 seconds because I would ask her to yield to me
for just a few minutes, and then I am going to yield back.
Ms. Waters. Yes, unanimous consent for 30 seconds, and I
yield to the gentlelady from Texas.
Mr. Hostettler. No objection.
Ms. Jackson Lee. I thank the Chairman. I thank the
gentlelady from California. I wanted to just build on her
comment.
I think you need to write immigration legislation, which we
have just written, that utilizes dollars for job training and
make it work, and speak to the gentlelady's point about
creating opportunities for jobs, whether it is Wal-Mart or
elsewhere, which we failed to do. I know the Chairman says this
is an Immigration Committee, and it is, but part of the issue
is, what do we do about Americans not having jobs, and how do
immigrants affect the economy?
Mr. Chairman, I think this has been an excellent hearing
because we have heard perspectives on both sides of the aisle
that happen to agree with each other, that immigration may not
be the sole issue of why we have a receding economy and not a
growing economy. It may be trade. It may be minimum wage. It
may be work conditions, but particularly, we need to find ways
to provide access to legalization, Mr. Chairman, and as well,
we need to find ways to employ Americans, to help Mr. Reindl,
to enforce employer sanctions, but to not stigmatize the new
force of the workforce of the 21st century. It can work, I
think, harmoniously with working Americans, including those in
the minority population and the youth population.
Ms. Waters. Will the gentlelady yield back so that I can
get the question in to the gentleman from California?
Ms. Jackson Lee. I will yield to the gentlelady. I thank
the Chairman.
Mr. Hostettler. Yes, the time has expired.
The Chair now recognizes the gentleman from California for
5 minutes for questions.
Mr. Lungren. Thank you very much, Mr. Chairman.
Mr. Reindl, your statement is an eloquent statement of
frustration. Are you aware of specific direct competitors you
have that knowingly hire illegal aliens and thereby have a
competitive advantage over you?
Mr. Reindl. Well, I would say--when I put a help wanted ad
in the paper, I would say 90 percent of the people applying are
immigrants. Half of them turn out to be illegal aliens. In my
interview process, though, I ask, well, what other factories
have you worked in, and a lot of them have worked in factories
around my location. And they admit to being illegal aliens. So
they are working in other factories.
Mr. Lungren. You obviously have conversations with some of
your competitors, don't you? I mean, not collusive
conversations, but conversations about what is going on?
Mr. Reindl. Once in a while, if I run into them, not too
often.
Mr. Lungren. Do you ever talk about difficulty in hiring
employees?
Mr. Reindl. It is a problem.
Mr. Lungren. No, no. Do you ever talk to them about it?
Mr. Reindl. Yes.
Mr. Lungren. What do they say? Why do they hire who they
hire?
Mr. Reindl. Well, no one has admitted to hiring--they
always say it is hard to find people to work.
Mr. Lungren. Right.
Mr. Reindl. And I believe that the problem is our product
price has been depressed so much that we can't pay the
salaries, and that is the problem.
Mr. Lungren. You are talking about the employment base that
you see now when you interview people. A large number--90
percent--you say appear to be foreign born. A huge percentage
of that is illegal. Is that different than what you saw 5 years
ago, 10 years ago?
Mr. Reindl. Yes, 10, 15 years ago, I would say 50 percent
were immigrants, and the rest were Native born Americans.
Mr. Lungren. So it is an accelerated situation, as you see
it?
Mr. Reindl. Yes, and by the way, my wage increase has not
increased that much in those 10 to 15 years.
Mr. Lungren. Dr. Camarota, you have talked about the impact
of immigration and illegal immigration here. Would you support
an effort to enforce the law that would include expelling
people from this country who are here illegally in large
numbers?
Mr. Camarota. As I indicated, the way I think we should
think about this is attrition through enforcement. If we began
making sure that it was much more difficult for illegal aliens
to get jobs, get drivers licenses, open bank accounts, access
public benefits, if it is more difficult to cross the border,
if it is more difficult for people to overstay a temporary
visa, I think what we would naturally see is a significant
increase in outmigration of illegal aliens. As I indicated,
about a half a million people leave the illegal alien
population each year, 400,000 to 500,000. They either go home
on their own, get deported or get green cards. We could
significantly increase that number with enforcement, and if we
reduce the number coming in, then the problem takes care of
itself over time. But we would obviously need to deport more
people than we are doing now.
Mr. Lungren. What numbers are you talking about? What
numbers would you be talking about, that you could foresee that
we would be deporting?
Mr. Camarota. I think the key thing would be that, when we
come across someone who is illegal in the normal course of law
enforcement and other activities, then when that person comes
to the attention of authorities, then that person is made to
leave, and that would convey the sense that the immigration
law--I would imagine that--I would certainly, maybe double or
50 percent more than we are deporting now, but our main focus
would be on denying all the benefits and accessing all the
things that illegals can easily do now.
Mr. Lungren. Would it make any difference whether someone
has been here 1 year, 2 years, 5 years, 10 years?
Mr. Camarota. In terms of--you can look at that two ways.
The person who just got here hasn't been breaking the law that
long, whereas the person who has been here 10 years is quite
the accomplished law breaker; he has been here longer, so you
might want to think about whether you want to reward him.
I guess my position on this is simply, you want to begin by
enforcing the law. If, at some point after you get a handle on
the situation, you want to legalize the illegal aliens, I can
think about that, some percentage who are still here, but it
seems to me you have got to start with the unequivocal
enforcement of the law.
Mr. Lungren. Dr. Harrington, what would you say about an
effort by the Federal Government to actually enforce the law,
not only with employer sanctions, but also expelling large
numbers of people who are here illegally?
Mr. Harrington. I think employer sanctions are a very
important component of law enforcement, not unlike what
Congresswoman Waters suggested, that we are allowing a
deterioration in American labor market institutions, I think it
is quite undesirable. And by enforcing a variety of Federal,
State and local employer/employee relationship laws, including
the Social Security Act, Fair Labor Standards Act, occupational
safety and health laws, I think that would diminish some of the
incentives for some of the foreign immigration undocumented
workers entering the United States and working under the
circumstances which they have, I think that alone could go a
long way toward adjusting----
Mr. Lungren. What do we do with those that are here?
Mr. Harrington. Well, sir, I think, number one, the first
thing you do is enforce the laws on the books. That is, if
someone is working illegally in a manufacturing plant, that the
law be enforced against that employer.
Mr. Lungren. But what do you do with respect to the
employees? See, it is very easy for us to talk about what we
are going to do generally, but when you get down to saying we
are going to expel these individual people who have been here,
who live down the street from you, go to church with you, you
may see, I think, that you might get a little different
reaction.
Mr. Harrington. There is absolutely a fairness issue.
Mr. Lungren. I am frustrated because I hear a lot of people
talking about what they want to do, but I want to know what we
are going to do. So my question to you is, would you support--
would you foresee us expelling large numbers of illegal aliens
who have been working in this country and been here for some
period of time? That is the only question.
Mr. Harrington. I guess part of my answer to that is that,
as we enforce the wage and hour laws in the country, that the
ability of the individuals--because, remember, a lot of the
illegal immigration we have is labor-market development--so as
a consequence, what that means is that your ability to go ahead
and engage in that kind of work activity just diminishes as we
straighten out the bottom of the labor market.
The second part of this is that I would expect people to
leave the country voluntarily and, in some, deportation. The
magnitude of that I don't know, and I am not expert enough to
say.
Mr. Lungren. Mr. Holzer?
Mr. Holzer. I also believe in strongly enforcing existing
wage and hour laws, but I would be reluctant to directly answer
your question. I would be reluctant to deport large numbers of
immigrants who have been--they have families in many cases,
children who have gone to school. And the disruption that would
be caused by deporting large numbers I would have some trouble
with. And in many industries where those workers have worked
for many years, have generated some good work experience and
some good work qualifications and performance, I would be
reluctant to punish them as well by deporting them in large
numbers.
Mr. Lungren. See, I appreciate your answers because I am
trying to focus us and force us to actually look at what we
would be able to do--what we as a generous country would be
willing to do. Because if I am here 20 years from now having
the same conversation and we have an accelerated problem, I am
not going to be very happy about it. And I just hear a lot of
talk about the problem and a lot of talk in general terms about
what we should do. We have got to come down to the nitty-gritty
of what we can do, will do and what the American people will
support, as well as what we think is fair within our concept of
being humane. And I don't mean to get away from the fact that
people broke the law, but I am talking about what we can
actually do as a country, as opposed to what we can talk about
but never come together in a consensus to in creating
legislation and enforceable programs.
I thought we created something with employer sanctions in
1987, I really did. And it has been my lament ever since that
we never enforced it. The question now is, how do we pick up
from where we are now and have a rational program that does
what America needs to do--that is what we ought to look to
first--but treats people as fairly as we can in the process.
Thank you.
Mr. Hostettler. I thank the gentleman.
Without objection, the gentlelady from California has one
question to ask, and then we will conclude with that.
Ms. Waters. Thank you very much, Mr. Chairman.
I think that there have been some good suggestions about
what to do about employers and what to do about securing the
border, but I have real problems with gross deportation because
I do not think you can split up families. And I think that my
colleague on the opposite side of the aisle has been trying to
get to that. What do you do with a father who is illegal, a
wife who is legal and two children who are legal? You get that
father; he is apprehended. Are you going to deport him and
leave the mother and children without the wage earner? Those
are real problems. And I have problems with that.
I am supportive of all the other stuff that we have talked
about that I think makes good sense in terms of how you begin
to stem the tide, but what do you do with this deportation? I
am for deportation of criminals, that I am for, you commit a
crime, you get kicked out of here, but I am not for wage
factories where wage earners who are illegal are deported and
split from their families. How do you handle that?
Mr. Camarota. Would you like me to--well, there are
actually a lot of illegal aliens with U.S.-born children. And
if we began to enforce the law, obviously, a lot of those
people would go home. Now the children would continue to enjoy
U.S. Citizenship under current law, so if those children
choose, they can come back to the United States; that would be
their choice as American citizens when they reach adulthood.
But the fact that there are children doesn't mean that you
can't enforce the law. We incarcerate parents all the time in
the United States, and that is a hardship on those children----
Ms. Waters. What about the legal wife?
Mr. Camarota. Well, in general, because U.S. Citizens can
always sponsor their spouse, not subject to any per-country
limit, there are relatively few illegal aliens married to--
well, there are virtually no illegal aliens married to
citizens, but there are some illegal aliens married to LPRs who
haven't yet become citizens. Now that is a more difficult
circumstance. But most of the demographic analysis shows that
the bigger problem--and the thing I think you are most
concerned about--is that you have U.S. Citizen children; that
is a very common circumstance. The circumstance where you have
an illegal alien married to an LPR is a small fraction of
illegal aliens----
Ms. Waters. What do you do about the children who are now
in high school, two kids, ready to graduate?
Mr. Camarota. And the children are U.S. Citizens, or they
are illegal aliens?
Ms. Waters. They are U.S. Citizens.
Mr. Camarota. Well, that would mean that the illegal alien
had been here for roughly 18 years, and the demographic
analysis shows, again, that there are--because if the illegal
alien parent came and then had a child subsequent to that, and
then that child reached all the way to 18 years of age, then
the person--we have relatively few people like that. But what
we do have a lot of is people who came as children as illegal
aliens themselves and have really been here for, say, 8, 9
years and have socialized in the United States; that now that
is a much more common circumstance.
Most analyses suggest that maybe 15 percent of the illegal
alien population, or 10 percent or less, have been here for
more than 20 years. Actually, most people think it is more like
7 to 8 percent have been here for that long. So there are very
few people who have children who have gone all the way to
adulthood, but there are millions with children, and they do
represent a challenge in terms of enforcement, but I would
submit, living in a foreign country is not necessarily a
hardship, and those children----
Ms. Waters. So you would deport them, you would deport that
family?
Mr. Camarota. Well, as I said, if you begin to enforce the
law, lots of people would go home on their own, so it wouldn't
necessarily involve any formal deportation. Let me give you a
substantive example. In the case of Pakistan, we think that the
number of illegal aliens from Pakistan after September 11 fell
by half, and there was practically no significant increase in
enforcement. What there was, was an unambiguous conveyance to
illegal aliens from that country that the immigration law was
back in business. Now, unfortunately, that was selected
enforcement----
Ms. Waters. Bad example. Bad example. Bad example.
Mr. Camarota. And I have real problems with selective
enforcement, but if they were across the board, we would see a
similar kind of situation.
Ms. Waters. I am sorry, that does not satisfy me, but thank
you very much.
Mr. Hostettler. Thank you.
I want to thank the panel of witnesses for your testimony
today, for your appearance here; you have been very helpful in
this process. All Members will have five legislative days to
add to the record if they have questions of the witnesses. We
ask that the witnesses answer within three weeks.
The Subcommittee business being completed, we are
adjourned.
[Whereupon, at 12:39 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress from the State of Texas, and Ranking Member,
Subcommittee on Immigration, Border Security, and Claims
We will be hearing testimony today about two articles on the effect
that immigrants have had on American workers. One of them was written
by Steven A. Camarota. It is entitled, ``A Jobless Recovery? Immigrant
Gains and Native Losses.'' Among other things, this article observes
that between March of 2000 and March of 2004, the number of adult
immigrants holding a job increased by more than two million, but the
number of adult natives holding a job was nearly half a million fewer.
The article concludes that immigration may have adversely affected the
job prospects of native-born Americans. The other article reaches very
similar conclusions. It was written by the Center for Labor Market
Studies. It is entitled, ``New Foreign Immigrants and the Labor Market
in the U.S.: The Unprecedented Effects of New Immigration on the Growth
of the Nation's Labor Force and its Employed Population, 2000 to
2004.''
It is important to understand that these articles are using a broad
definition of the term ``immigrant.'' They include undocumented aliens,
aliens who are lawfully employed on a temporary basis, aliens who are
lawful permanent residents, and naturalized citizens. In fact, the
article written by the Center for Labor Market Studies goes even
further. In that article, the definition of an ``immigrant'' is an
individual who was born outside of the 50 states and the District of
Columbia. Persons born in the U.S. Virgin Islands, Puerto Rico, and
Guam are counted as being part of the immigrant population.
Our witness today, Professor Harry J. Holzer, will explain why we
should question the conclusions in these articles. Dr. Holzer thinks
that immigration has modest negative effects on less-educated workers
in the U.S., but it also has positive effects on the economy. He
expects the positive effects to grow much stronger after Baby Boomers
retire. Also, according to Dr. Holzer, the employment outcomes of
native-born Americans mostly reflect the underlying weakness of the
U.S. labor market, rather than large displacements by new immigrants.
I agree with Dr. Holzer that immigrants have a positive effect on
the American economy. They create new jobs by establishing new
businesses, spending their incomes on American goods and services,
paying taxes, and raising the productivity of United States businesses.
The American economy does not have a fixed number of jobs.
Economists describe the notion that the number of jobs is fixed as the
``lump of labor'' fallacy. Job opportunities expand with a rising
population. Since immigrants are both workers and consumers, their
spending on food, clothing, housing, and other items creates new job
opportunities.
Immigrants tend to fill jobs that Americans cannot or will not take
in sufficient numbers to meet demand, mostly at the high and low ends
of the skill spectrum. Occupations with the largest growth in absolute
numbers tend to be the ones that only require short-term, on- the-job
training. This includes such occupations as waiters and waitresses;
retail salespersons; cashiers; nursing aides, orderlies and attendants;
janitors; home health aides; manual laborers; landscaping workers; and
manual packers.
The supply of American workers suitable for such work is falling on
account of an aging workforce and rising education levels. The median
age of American workers continues to increase as the Baby Boomers near
retirement age.
Some people are concerned that undocumented workers lower wages for
American workers. This is a legitimate, though probably exaggerated
concern, but it is not the mere presence of undocumented workers that
has led to low wages. The problem is the lack of bargaining power that
these workers have against their employers. No worker chooses to be
paid low wages or to work under poor conditions. The wage depression is
attributable to the ability of employers to exploit this foreign
workforce. Underpaying foreign workers is only one of the methods used
by employers to cut labor costs. Temporary and part-time workers are
employed without worker benefits and the labor laws are violated
routinely. The solution to this and many other immigration-related
problems in our country is comprehensive immigration reform. Thank you.
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