Experts weigh how illegal workers affect US employment.

This is one of the key questions being posed as the US considers the economics of illegal immigration - with no easy solutions to the challenges in sight.

As Congress debates a new immigration bill, some economists believe any restrictions are likely to be disruptive to a variety of industries, from construction to hospitality to agriculture. At the very least, restrictions could add to employers' costs as they scramble to attract new workers with higher wages. But new regulations might also be good for those without much education or marketable skills: Business might be forced to train them. And those in lower wage brackets might see their wages rise as they face less competition for jobs.

"Do undocumented workers take away jobs from Americans?" asks Anthony Chan, chief economist at JPMorgan Private Client Services in Columbus, Ohio. "My best guess is that they take some jobs away. Some Americans are willing to work at those jobs at low salaries, but not all [Americans are]."

Analysts are quick to point out that the economics of undocumented immigration are complex. Few models have been crafted that try to look at how the US economy would perform without tapping into inexpensive labor for some jobs.

"We can't run econometric models. The numbers aren't good enough," says David Wyss, chief economist at Standard & Poor's in New York.

One challenge in performing any calculations is agreeing on the number of undocumented workers. Only estimates exist, and they range from 9 million to 20 million. The conventional estimate is 11 million. But no one really knows for sure.

By way of contrast, the Bureau of Labor Statistics calculates how many people out of a workforce of 143 million are unemployed. Last month, 7,193,000, or 4.8 percent, were out pounding the pavement.

The Center for Immigration Studies, which is in favor of some restrictions on immigration, recently issued a report looking at jobs and undocumented workers. One of its conclusions was that between March 2000 and March 2005, only 9 percent of the net increase in jobs for adults went to people born in the US.

"This is striking because natives accounted for 61 percent of the net increase in the overall size of the 18- to 64-year-old population," writes Steve Camarota, director of research.

Howard Hayghe, an economist at the Department of Labor, confirms that this number is correct. But he also points out that by 2005, the economy was doing a better job of producing jobs - and the percentage of native-born residents finding jobs rose to 41 percent. In other words, the stronger economy absorbed more workers of all educational levels. "The more office buildings you build, the more people you need to clean them. The more roads you build, the more workers you need," says Mr. Hayghe.

In addition to the 7 million Americans looking for jobs, another 1.5 million are considered to be "marginally attached" - that is, not actively looking for work. Moreover, some 386,000 are counted as "discouraged" workers. And there are about 19 million, including students and senior citizens, who are not in the workforce.


"If we close the borders and have less undocumented workers, it would put some upward pressure on overall wages," says Mr. Chan. "It's no secret business will have to pay workers more money."

But it's not a given that business will do that. "They may just outsource a larger percentage of the work, or the jobs may just disappear," Chan says.

Economists certainly differ on whether tighter immigration will have any effect on the economy. "It's similar to asking a big part of the labor force to leave," says Mark Zandi, chief economist at Moody's Economy.com. "In today's economy where the job market is at capacity, asking people to leave means the economy will not grow as fast. In fact, there could be a very difficult adjustment over the first three to four years when this process is in full swing."

On the other side are those who say it will have very little impact on the economy because most undocumented workers are low paid and relatively unskilled. Yes, there might be some adjustments - Americans might have to eat more plum tomatoes that can be harvested by machines. And the US may have to increase its already swollen import bill to make up for what can't be produced here.

"We might have a lower unemployment rate and a somewhat lower gross domestic product, but it wouldn't be a huge impact," says Mr. Wyss.

However, that depends on who is affected. San Diego builder Sherman Harmer Jr., president of Urban Housing Partners Inc., typically delivers about 300 units of housing per year. He relies on workers coming across the US-Mexican border who have some form of documentation. "We have a shortage of construction workers in California," he explains while in New York.

If he didn't have access to these workers from Mexico, he says he would have to slow the amount of construction he does: "There would be a reduction in the inventory of new homes, condos, and apartments, and that would drive prices even higher."

But, as he walks down 125th Street in upper Manhattan, Kevin Brown, a plumber, says restrictions on illegals might be good for him. "Could I have a better job?" asks Mr. Brown, whose parents are from Jamaica. "Possibly," he says, adding that he knows people out of work who could do a job taken by an illegal immigrant. However, he's also quick to add, "I don't blame anyone. Everybody's got to live."

Not far away, Miguel Almanzar, a bicycle messenger, is reading a newspaper. "This country is made of immigrants," says Mr. Almanzar. But he wants them to be legal immigrants. "There is the threat of terrorism," he says. "Now, the country needs to secure its borders."

By Ron Scherer | Staff writer of The Christian Science Monitor
From: csmonitor.com/2006/0330/p01s01-ussc.html

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