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Good migrations: foreign labor, native wages.

ACCORDING TO LOU Dobbs and other self-proclaimed defenders of the nation's borders, hordes of immigrants are depressing American wages. But a recent study from the National Bureau of Economic Research questions the conventional wisdom that competition from immigrants invariably hurts native workers.

Two economists, Giovanni Peri of the University of California at Los Angeles and Gianmarco Ottaviano of the University of Bologna, compared the growth in the percentage of immigrant workers with the change in the average wages of native-born workers in the 86 largest U.S. metropolitan areas between 1970 and 2000. They found overall immigration actually is associated with higher wages for U.S.-born workers. The higher the percentage of immigrants in a city, the higher the average real wages for native-born workers rose.

The economists also looked at what happened to average wages in cities with particularly high and particularly low immigration flows. They found that for every 2 percent increase in foreign-born workers in a city, the average annual wage of native-born workers increases by $140. In cities like Los Angeles and Miami, whose percentage of foreign-born workers shot up by more than 30 percent during the period, average native wages rose by over $4,200 more than in low-immigration cities. Foreign-born workers, it turns out, are not substitutes for native workers; instead, immigrants seem to bring skills that complement native skills, enhancing the productivity of both groups.

The one down note in this upbeat analysis: Competition from low-skilled immigrants drove down the average wages of native-born high school dropouts by 2.4 percent. Dropout rates have steeply declined during the last 30 years, however, and high school dropouts now constitute only 8 percent of the U.S. work force.
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Title Annotation:National Bureau of Economic Research
Author:Bailey, Ronald
Publication:Reason
Article Type:Brief Article
Geographic Code:1USA
Date:Feb 1, 2006
Words:285
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