CHAPTER 4

The Economy

A huge increase in America’s population—more than one-fourth of the people in this country are immigrants and their children—was bound to make huge changes in the nation’s economy. Millions of new immigrant workers have not only fueled substantial growth, but have set in motion significant changes and surprising innovations. Our economy would not be the same without them.

Immigrants fill important roles at both the top and bottom of the occupational ladder. From eldercare to office cleaning, to chopping onions at the back of restaurant kitchens, immigrants have become familiar in a wide array of low-skilled jobs. Less well known, they are also working in large numbers in many professional fields. Forty percent of the country’s software engineers as well as more than a quarter of physicians and surgeons are foreign born.¹

As America’s economy over the decades shifted away from manufacturing to services, an available pool of hardworking immigrants helped make the evolution possible. They have helped any number of service industries grow and flourish. In some cases they have likely allowed some industries to survive. They have not just filled but also added jobs. As consumers they have expanded the economy, which in turn supports jobs of all kinds.

Immigrants have also been a source of innovation. They have invented new businesses and provided new services. They have played a role in transforming the structure of certain industries—in meatpacking, for example, by supplying low-wage labor for unpleasant jobs. Because of the specialized skills many have brought, they have shaped the development of the remarkable high-tech sector. Indeed, the National Academy of Sciences report on immigration and the economy concluded that high-skilled immigrants “have boosted the nation’s capacity for innovation, entrepreneurship, and technological change.”²

Overwhelmingly, the changes immigrants have brought to the US economy have been highly beneficial, but we should not overlook the potential negative effects. The fact that so many immigrants have been prepared to work hard at jobs with comparatively low wages and difficult working conditions has fueled a debate about whether they are limiting opportunities for native workers—although the evidence shows that overall, the adverse effects on US-born workers’ wages and employment have been minimal.

Changes

To begin with, immigrants have changed the composition of the nation’s workforce. As their numbers have grown, they have become an increasingly large share of America’s workers—17 percent of the civilian labor force in 2019, up from 9 percent in 1990.³ Immigrant men’s employment rate is slightly higher than native-born men’s, and among the least educated men, the rate for immigrants is dramatically higher.⁴

Immigrants are also more likely than US-born workers to be employed in lower-skill occupations, for which there has been persistent demand. Partly this is because the younger, less skilled US-born working-age population has substantially shrunk since 1990 given the aging and retirement of baby boomers, and because educational attainment has increased among the native born.⁵ Large numbers of immigrants are found in what have often come to be seen as “immigrant jobs”—low-wage and low-status positions in agriculture, construction, manufacturing, and a wide range of services that the native born are either unwilling or unavailable to take.

A look at specific occupations in which workers are most likely to be immigrants makes this clear (table 4.1). In 2014, immigrants in the nation were nearly two-thirds of “miscellaneous personal appearance workers” (a category including manicurists and pedicurists, makeup artists, shampooers, and skin care specialists), the highest share of any occupation. Immigrants made up about 60 percent of graders and sorters of agricultural products as well as plasterers and stucco masons in construction. They accounted for 55 percent of sewing machine operators, and about half of maids and housekeepers, tailors, and dressmakers.⁶ The extent to which immigrants dominate certain manual occupational niches is even more striking in states where they make up a large proportion of the population. In California, for instance, in 2014 more than 70 percent of housekeepers and maids as well as gardeners and groundskeepers were foreign born; so were more than 65 percent of workers in construction occupations (roofers, painters, and drywall installers) in both California and Texas. In states with an important agricultural sector, a high proportion of farmworkers were immigrants—a whopping 81 percent in California, and 70 percent or more in Washington and Florida.⁷

Source: DeSilver 2017.

In moving into low-level jobs, immigrants have brought a host of changes. For a start, they helped sustain certain industries that might have had trouble surviving in the absence of lower-cost immigrant labor. Such is the case with the last remnants of garment manufacturing that have stayed in the United States, even while most production has by now moved abroad in search of cheap labor. In my own home city of New York, garment manufacturing, one of the bastions of the economy for much of the twentieth century, may have shrunk beyond recognition, but virtually all those working in the remaining factories and sweatshops—according to a 2016 report, over 90 percent of the sewing machine operators and pressers—are immigrants.⁸ Immigrant workers from Latin America and Asia are a mainstay of the Los Angeles apparel manufacturing industry even as it has experienced marked declines too. No doubt some agribusinesses would not have survived if they lacked immigrant workers, or at least had great difficulty making a go of it. Without immigrant labor, journalist Tamar Jacoby opines, labor-intensive agriculture would have taken an enormous hit. Not only would produce be more expensive but “instead of milk from a nearby dairy, the … kind available would come from abroad, and it would be irradiated or powdered. Meat would come from Brazil [and] … fruits and vegetables from New Zealand—and that’s the good expensive stuff. There would be plenty of inferior products, too, and much much less of anything would be fresh.”⁹

Why have so many immigrants been willing to take bottom-level jobs? In part, they have no choice but to accept what jobs are on offer. Many enter the labor market without fluent English, legal status, or skills transferable in the United States, and some arrive with extremely low levels of education. If they are unable to get a job, they have few alternatives; federal law limits recent legal immigrants’ ability to receive many forms of government assistance in their first five years of residence, and undocumented immigrants have access to hardly any social welfare programs at all. In addition, at least in their early days in the United States, the wages in lower-level jobs look good compared to what immigrants could earn in their home country. They view wages, in other words, with what has been called a dual frame of reference.¹⁰ Many see their stay in the United States and their current jobs as temporary, and those who worked in higher-status occupations back home continue to receive prestige in their own ethnic communities for the positions they used to hold.

Mrs. Thomas (a pseudonym) is a woman I knew in a Jamaican village when I lived there in the late 1960s and, later, when she moved to New York in the 1970s. In Jamaica, she had been an elementary school teacher, a position of great prestige in her local community, but as many other professional immigrants have found, her qualifications were not recognized here. When she came to New York and subsequently relocated to south Florida, she took a series of live-in jobs caring for the elderly, initially to earn money to help finance her daughter’s university education in Jamaica. Mrs. Thomas earned considerably more as a live-in companion to the elderly than she did teaching primary school in rural Jamaica. While she soon became aware of wage scales in the United States, she continued to view her earnings in terms of standards in the “old country”—a perspective that was reinforced and renewed by trips to the island along with visits from relatives, Jamaican social networks in New York and Florida, and her definition of her stay in the United States as temporary. Jamaican private household workers usually evaluated their social standing, at least in part, in terms of their position in their home communities, and this evaluation tended to be acknowledged by their former associates. In their Jamaican social world in New York and Florida, their former, rather than their present, occupation or class status was usually the primary basis for their rank. Mrs. Thomas was thought of by her friends and relatives in the United States as a teacher—not as a domestic. As she put it to me, “I’m no scrubber.”¹¹

Actually, Mrs. Thomas became close to a number of the elderly women she looked after, thus pointing to a positive feature of caregiving jobs for many immigrant workers; another is a sense of pride in providing good care. In work settings generally, the opportunity for sociability and to develop relationships with coworkers is often a plus.¹² And not all lower-level jobs are dead-end positions. A study of Mexican migrants in low-level jobs reveals that some were able to take advantage of chances to learn new skills, advance to better positions, and earn higher wages in construction, auto repair, manufacturing, and the hospitality industry, in the latter case progressing from chambermaids, food preparation workers, or janitors, to waiters and assistant cooks in restaurants, or supervisory positions in hotels.¹³

Regardless of the opportunities on offer, the availability of lower-wage immigrant workers has had an additional economic impact: driving up the demand for labor in some occupations. One example is in-home childcare jobs. To be sure, the call for childcare workers has grown in the post–World War II decades as more middle- and upper-middle-class women entered the workforce, with many looking for someone to care for their children in their own homes.¹⁴ But immigration also has been involved. The dramatic surge in the female immigrant labor supply since the 1970s, coming on the heels of African American women’s exodus from private household work as better opportunities opened up in post–civil rights America, was a factor behind the rising number of domestic workers; indeed, the influx of immigrants into the occupation further stimulated a demand for their services, especially in metropolitan areas where many residents are highly paid professionals in affluent households.¹⁵ That the inflow of immigrant women has kept the price of in-home childcare from becoming too costly is critical. With many immigrant women searching for work in cities like New York and Los Angeles, there has been downward pressure on wages for private household workers, and that in turn has made domestic services affordable and available to a large number of families.¹⁶ The result, as studies of Los Angeles and New York show, is that hiring immigrant women, typically from Latin America or the Caribbean, for childcare and housecleaning has become normative, especially among upper-middle-class families. Immigration, as one study puts it for New York City, “altered social norms governing consumption of domestic services in ways that are self-perpetuating.”¹⁷

A similar dynamic has operated in eldercare. With older people living longer, and most developing chronic diseases and disabilities, and more working-age women in the labor force, there has been an increased demand for paid home care—work that native-born Americans would rather not do. In 2018, a striking 38 percent of the home health aides in the country were foreign born, with the proportion even higher in some states, such as a whopping 75 percent in New York, and over 50 percent in New Jersey and Florida.¹⁸ The availability of immigrants to do this work, and for relatively low pay, has itself helped to normalize paid caregiving in private homes as one solution to eldercare, particularly among middle- and upper-middle-class Americans, and in this way, generated additional jobs. The need for workers to care for the elderly, it should be noted, is going to expand further in the future given the aging of the population. The number of those eighty-five and over is expected to more than double from 5.9 million in 2012 to 14.1 million in 2040.¹⁹ In this regard, immigrants have been playing another key role. By keeping the working-age population growing, immigrants and their children help to shore up the finances of our pay-as-you-go social security system, which depends on a large enough workforce to fund the benefits of retirees.

In general, as immigrants have filled lower-level positions, they have reduced the prices of some goods and services, or prevented them from becoming too expensive, in a range of sectors, from childcare and housecleaning to lawn care and house repairs, thus making them more widely available to more Americans. In this way immigrants’ lower-paid labor has subsidized the lifestyles of middle-class Americans, affording them some services that only the affluent could have managed to pay for in the past. This of course is another aspect of change.

On top of this, as the National Academy of Sciences report on the economic and fiscal consequences of immigration notes, low-skilled immigrant workers have increased the labor supply of high-skilled natives through providing lower-cost childcare and thus allowing more mothers to work outside the home. To put it somewhat differently, the availability of immigrants for housekeeping and childcare has been a boon for highly educated women with children, enabling them to advance their careers in professions that require long hours and irregular work schedules.²⁰ And to the extent that low-skilled immigrants have furnished labor that keeps enterprises like restaurants, factories, and hotels operating, they have ended up generating jobs for those higher up the occupational ladder in these sectors, among them accountants, chefs, and managers, who are often native born.

Higher-skilled immigrants have brought a further set of changes. Contrary to popular perceptions, immigrants are well represented at the upper ends of the occupational hierarchy. More than a third of employed foreign-born workers in the nation’s civilian labor force in 2019 were in management, professional, and related occupations.²¹ At the city level, in New York, immigrants at the end of the first decade of the twenty-first century were not just starkly overrepresented in blue-collar and low-level service jobs but also made up a large share of relatively well-paid and higher-level positions; three out of ten architects, for example, four out of ten real estate brokers and doctors, and a third of financial managers were immigrants.²²

In the health care professions, immigrants have staved off or shrunk shortages in many areas of the country. Immigrant doctors, many in primary care delivering preventive and routine services, have been a saving grace in rural America as well as underserved communities with poor, less educated, and more minority residents. While in the nation as a whole 28 percent of the nearly 1 million physicians and surgeons in 2018 were immigrants, in the depressed Rust Belt city of Youngstown, Ohio, where the per capita income in 2010 was around $12,000, three-quarters of the physicians were foreign trained (as compared to 17 percent in affluent Westport, Connecticut).²³ The majority of foreign-born physicians and surgeons are from Asia, and Indians are by far the largest nationality group. Immigrants have filled a need for nurses too, especially in hospitals in rural areas and small towns; 16 percent of the country’s 3.3 million registered nurses are foreign born, with the largest contingent from the Philippines, which trains English-speaking nurses in an Americanized curriculum.²⁴

Immigrants at all occupational levels have strengthened the economy in yet another way. They are not only workers but also consumers and customers of goods and services. When the nation’s millions of immigrants purchase even such basic items as food for themselves and their families, they end up supporting many US enterprises and jobs within them. Given the extensive offshoring of so much manufacturing and industrial production to other countries as well as technological advances reducing the need for labor in some sectors, this economic growth dynamic is especially prominent in services that cannot go abroad or be easily automated. Public schools in many cities may be bursting at the seams, for instance, but without large-scale immigration and a substantial second generation, many would have downsized or been closed; the demand for teachers would have been reduced along with the need for lower-level employees, from custodial to kitchen staff. Indeed, because immigration has significantly expanded the population of so many cities and metropolitan areas, it has sustained and often created jobs for local and state government workers who provide fundamental services in a broad range of jobs at different occupational levels.

Immigrants have also had a role in the expansion of the housing market, another key sector of the economy. The thirty years between 1980 and 2010 saw an added 5.3 million immigrant homeowners in the nation, with the numbers going up each decade. In a number of states, including New York, California, Illinois, and Pennsylvania, immigrants accounted for the major share of growth in homeowner households in the first decade of the twenty-first century.²⁵ Without growth in the foreign-born population, according to a study of five metropolitan areas, regions with strong housing markets such as San Francisco would not have recovered so quickly after the 2008 recession; regions that continued to struggle in the aftermath of that downturn such as Buffalo would have seen weaker growth.²⁶ In increasing demand for housing, immigrants have stimulated the real estate industry and other economic activities tied to it, such as real estate agents and workers in construction and building trades, thereby generating jobs for other immigrants as well as the native born.²⁷ Looking ahead, immigrants as well as their adult second-generation children will no doubt be a key source of demand for new and existing homes in the years to come.

Immigrants create jobs in one more way: through establishing and operating their own businesses.²⁸ As of 2014, around one in five business owners nationwide were immigrants; they founded about a quarter of new firms in 2012, with the figure around 40 percent in California and New York.²⁹ Despite the risks, small business ownership offers many newcomers an alternative to less desirable, bottom-level jobs, which otherwise would have been their fate given impediments in the labor market such as poor English facility, inadequate or inappropriate skills, and often discrimination.³⁰

Apart from hiring paid workers, many immigrants who start or maintain small businesses have improved and frequently revived neighborhood economies. A Fiscal Policy Institute report, “Bringing Vitality to Main Street,” written in the second decade of the twenty-first century, details how immigrants played a major role in revitalizing business corridors in “Main Street” centers in metropolitan areas that had fallen on hard times in a good many cases. They did this by taking over or setting up retail shops as well as food and neighborhood services, from grocery stores and dry cleaners to restaurants, beauty salons, and jewelry and clothing stores. In 2013, immigrants made up 28 percent of Main Street business owners in the country, with the rates much higher in metropolitan areas with large numbers of immigrants—such as fully 64 percent of all Main Street business owners in the Los Angeles metropolitan area, 61 percent in metropolitan San Jose, 56 percent in metropolitan Washington, DC, and 54 percent in metropolitan Miami. Immigrant-owned businesses helped to give new life and character to urban neighborhoods that had previously been in decline (see chapter 3). They also drew a new consumer base to formerly rundown areas, and in general, helped to stimulate overall economic development through “an increased tax base, more local spending, and more local jobs.”³¹

Innovations and Structural Transformations

Up to now I have talked mainly about jobs. The section that follows speaks to another dynamic: how immigrants have played a role in structural transformations in the economy, and been an important source of innovation and invention, most notably in technology.

This is not the first time immigration has had a major transformative effect on the economy. Perhaps most striking is its role in the epochal process of industrialization in the late nineteenth and early twentieth centuries as the United States went from a predominantly rural agrarian society to an industrial economy. Immigrant labor, sociologists Charles Hirschman and Elizabeth Mogford conclude, “may well have been a necessary condition for the pace and scale of the rise of the manufacturing sector from 1880 to 1920.”³² Immigrants and their descendants were the primary workforce in the rapidly expanding manufacturing sector in the early twentieth century; in 1920, immigrants and the second generation comprised over half of manufacturing workers, and with the third-generation grandchildren of immigrants more than two-thirds.³³ Replacing even a fraction of the several million immigrant workers in manufacturing would have required much greater incentives in terms of pay and working conditions than those offered to immigrants. While other factors, such as the evolution of the American system of manufacturing, discovery and development of mineral resources, and lowered costs of transportation, contributed to the rise of industrialization, immigration was, without doubt, of critical significance.

In the contemporary era, immigrants have been crucial in a modern-day economic transformation: the astonishing success of high-tech industries, a vitally important new sector of America’s twenty-first-century economy. Immigrants have played an “outsize role in high-tech startup companies as well as their larger and more established Fortune 500 counterparts: as members of the founding teams of roughly one third of all venture-backed companies and more than 40 percent of Silicon Valley high-tech startups.”³⁴ According to a 2018 study of the ninety-one American start-up companies valued at $1 billion or more, over half had at least one immigrant founder; more than 80 percent of these companies employed immigrants in key management or product development roles, commonly as chief technology officers and vice presidents of engineering.³⁵ Immigration is highly selective, and the US tech sector has pulled in some of the best, brightest, highly educated, and most ambitious from other countries who have helped to make the industry such a success. They have come because US high-tech companies pay well by international standards, and because demand in this country for computer programmers, software developers, and electrical engineers soared after 1980.³⁶

The immigrant origins of the iconic companies tell part of the story. One of Google’s founders, Sergey Brin, is an immigrant from Russia, and its current chief executive (in 2020), Sundar Pichai, was born in India. An immigrant from Brazil, Eduardo Saverin, is one of Facebook’s founders; eBay was started by an immigrant from France (Pierre Omidyar), and Yahoo was cofounded by Jerry Yang, born with the name Yang Chih-Yuan in Taiwan and brought to California by his family at the age of ten. Apple’s founder Steve Jobs had immigrant roots too. His adopted mother who raised him was the daughter of Armenian immigrants, while his biological father, Abdulfattah Jandali, grew up in Syria and studied in Lebanon before moving to the United States. Jeff Bezos, the founder of Amazon, was raised from the age of four by his Cuban immigrant stepfather, Miguel “Mike” Bezos. Elon Musk, to give one more example, the founder of Tesla and SpaceX, is from South Africa. Apart from the many immigrant founders, a significant share of the current science and technology workforce in the country—a quarter of all those working in computer and mathematical science occupations in 2014—are immigrants.

Indians have played an especially noteworthy role as entrepreneurs, engineers, and other professionals in the information technology and computer sector, perhaps not surprising because they come from a country with its own high-tech revolution. Indian immigrants are among the tech titans of today, having risen to become chief executive officers of such giants as Microsoft, Adobe Systems, and Micron Technology. Many immigrant information technology workers have been educated abroad, such as at India’s well-known Indian Institutes of Technology (as well as at top Chinese universities), with a good number having initially entered under special H-1B visas for skilled foreign labor. High-skilled immigrants, as sociologist Susan Eckstein and economist Giovanni Peri note, have been “fundamental to Silicon Valley’s ability to establish and maintain a global competitive edge in information technology.”³⁷

In line with their high-tech prowess, immigrants stand out as inventors in science and technology. Among college graduates in the United States, according to one study, immigrants are twice as likely to receive patents as native-born Americans owing to their disproportionate share of engineering and science degrees.³⁸ In raising patenting per capita, they have ultimately contributed to the growth of productivity.³⁹

Besides high-tech start-ups, immigrants have created other kinds of new businesses. Miami provides a dramatic example as a city transformed by Cuban immigrants who literally reinvented its economy. Cuban elites in exile, including experienced bankers from the island, established firms and businesses that were pivotal in Miami’s emergence as a center of intercontinental trade as well as an important financial and banking hub. A few dozen Cuban enterprises in the 1960s grew to thousands by the 1980s as, in the process, Cuban entrepreneurs reoriented the city’s economy away from tourism from northern states and converted Miami into a true global metropolis, or in the words of Alejandro Portes and Ariel Armony, a “strategic center of trade and financial transactions between Europe, the United States, and Latin America.”⁴⁰

All over the country, immigrants have developed new types of retail businesses and made significant alterations to old ones so that they are barely recognizable from before. Asian supermarket chains, new on the scene in metropolitan areas around the country, have become big business. Mainly catering to Asian Americans, and typically founded and run by immigrant entrepreneurs and their families, one of the largest is H Mart with over eighty stores across the United States as of 2020, when the company reported $1.5 billion in sales. Founded by a Korean immigrant in New York City in 1982, the H stands for Han Ah Reum, a Korean phrase that roughly translates to “one arm full of groceries.” Another example is 99 Ranch Market, the largest Taiwanese American supermarket chain, with over fifty stores in 2020, mostly in California, but also in Nevada, Oregon, Washington, Texas, New Jersey, Maryland, and Massachusetts.

Immigrants have had a hand, too, in reinvention in the restaurant business (see chapter 5). New “ethnic” restaurants, among them Thai, Turkish, Indian, Vietnamese, Korean, Cuban, and pan-Asian, once rare or nonexistent in many cities, have become a regular feature, often offering relatively inexpensive meals “just when American life style changes [in the post-1965 decades] led to a taste for more exotic foods and greater spending on meals made in restaurants rather than at home.”⁴¹ Mexican restaurants, which used to be found mainly in the Southwest, are everywhere. Chinese restaurants have multiplied, with roughly forty thousand across the country as of 2015, or around three times the number of McDonald’s outlets. Although Chinese restaurants are still a mainstay of Chinatowns in New York City and San Francisco, they have spread almost everywhere, from Alabama to Alaska, frequently with new all-you-can-eat buffets. Writing a few years ago, journalist Lauren Hilgers noted that there was “one in Pinedale, Wyoming (population 2,043), and one in Old Forge, New York (population 756); Belle Vernon, Pennsylvania (population 1,085) has three.” These far-flung Chinese restaurants are staffed by immigrants who often pass through for a few months at a time; many use employment agencies in Manhattan’s Chinatown to find restaurant jobs in the Northeast, Midwest, and Deep South, and take long-distance buses based in Chinatown and operated by Chinese immigrants to get to them.⁴² Although most Chinese restaurants are small-scale operations, one chain, Panda Express, founded and owned by an immigrant couple, had become a $3 billion business with some two thousand locations by 2019.

Perhaps the most well-known new Main Street immigrant businesses are the nail salons that dot the landscape in metropolitan America. The nail salon as we know it is a post-1965 immigrant invention, associated with the Vietnamese in many parts of the country and Koreans in the New York–New Jersey metropolitan area. Before the advent of new immigrants, getting a manicure was for the well-to-do. Professional nail care was a secondary and expensive service offered in hair salons, typically owned by the native born and catering to better-off clientele.

Enter new immigrants and the modern nail salon. In transforming the nail salon industry, immigrants created a demand for their work—and also expanded it. They did this by what Susan Eckstein and Thanh-Nghi Nguyen call the “McNailing of America,” establishing stand-alone nail salons in neighborhoods where people live and work, and offering quick, assembly-line service on a walk-in, no appointment necessary basis. Cost was key. The immigrant-run nail salons offered manicures at a much lower price than upscale beauty salons charged so that nail care came to be within reach for people who previously could not afford it. In the process, standards for nail beauty rose, further expanding the demand for manicurists and pedicurists. Getting a professional manicure has become de rigueur for women of diverse racial, ethnic, and class backgrounds, and important to their presentation of self. Sociologists have called this “niche stretching”: immigrants broadened the customer base for professional nail care, and at the same time, diversified the range of nail care offerings to include such services as pedicures and in some cases even fingernail artwork.⁴³

The figures are striking: the number of nail salons in the United States more than doubled from a little under thirty thousand in 1991 to close to sixty thousand in 2008, with a large number of them run and operated by immigrants and staffed by mostly female immigrant workers. In the New York–New Jersey metropolitan area alone, the estimated four thousand Korean-owned nail salons in 2006 represented a nearly threefold increase from fourteen hundred in 1991.⁴⁴ Nail salons, it should be noted, are a specialized slice of the beauty industry, which is a vibrant part of the US economy; in the early 2000s, beauty salons generated $60 billion in sales and employed more than 1.6 million people. Nail salons at that time accounted for about 10 percent of the revenue and 6 percent of the employment in the sector.⁴⁵

And we should not forget that immigrants have helped make possible major structural transformations in long-established sectors by providing low-skilled and low-wage labor sought by employers. Meat and beef processing is a case in point, which together with poultry production in 2019 was a $213 billion industry employing over 500,000 people.⁴⁶ Chicago may be recalled in the poet Carl Sandburg’s phrase as the hog butcher of the world, but the city’s stockyards are long gone, beginning a decline after the Second World War and closing altogether in 1971. The meatpacking industry has moved elsewhere as it has morphed, or been restructured, into a different form—a development that has heavily relied on immigrant labor.

During the 1980s and 1990s, the meatpacking industry was increasingly dominated by vertically integrated companies that sought to remain competitive by decentralizing production to large plants in rural areas of the Midwest and Southeast.⁴⁷ One account describes the key role of geographic location in the industrial transformation in meat processing: “To reduce transportation costs, ensure constant supplies of animals, and maintain high year-round plant utilization, beef and hog processing plants relocated to nontraditional rural regions … taking advantage of lower land and labor costs [in states like Iowa and Nebraska].… Relocation to rural areas also weakened the bargaining power of many urban-based unions, resulting in a decline in wages and working conditions that decreased the attractiveness of meat-processing jobs to native-born workers.”⁴⁸ Indeed, employers’ desire to cut costs and weaken or eliminate unions were major factors behind the industry’s restructuring.⁴⁹

Finding themselves shorthanded, hog- and cattle-processing firms began to recruit Hispanic migrants to new rural destinations to what were physically demanding, hazardous, and low-paying jobs that native workers, especially younger ones who had better employment alternatives elsewhere, shunned. Immigrants drawn to the industry had fewer options, especially if they lacked documents, and were more willing to tolerate the dirty and dangerous working conditions. For many Hispanic workers, it was a step up from employment in agriculture; cutting meat in a Colorado or Nebraska slaughterhouse paid more than picking strawberries in California.⁵⁰ By 2014–18, roughly one-third of the workforce in the meat-processing industry in the United States was foreign born, more than four times the proportion in 1980.⁵¹ Immigrants, in short, facilitated the restructuring of meat processing from a relatively high-wage unionized industry in mid-twentieth-century urban centers providing workers with a middle-class income and generous benefits to one that, by the early twenty-first century, was notorious for low wages, degraded working conditions, and deunionization or waning union power in the midst of rural America.⁵²

A different development concerning immigrants and labor organizations is worth noting: the emergence of worker centers. Given that the traditional union movement’s share of the labor force (10.5 percent) in 2018, as sociologist Ruth Milkman points out, has shrunk to a level comparable to that of the 1920s, it is not surprising that the vast majority of immigrant workers are outside the union orbit. Despite some successful unionizing efforts among immigrant workers, such as the Justice for Janitors campaign in Los Angeles, the two million immigrant union members in 2018 were mostly hired into jobs already covered by union contracts rather than through unionization drives. In this context, worker centers, a new type of immigrant worker organization, have proliferated. Described as “alt-labor” groups because they rarely engage in traditional collective bargaining, worker centers are grassroots organizations with loose membership structures that, among other things, have mounted campaigns against workplace injustice through media outreach and direct appeals to consumers; offer legal services to workers subjected to workplace violations; and provide basic information to immigrant workers about their rights under US labor and immigration law. By 2018, some 226 worker centers were operating in the United States, up from 5 in 1985, with many of them focused on low-wage, mostly foreign-born workers in industries with weak unions or none at all. The centers are typically led by educated elites, many of whom are veterans of political and labor movements in their home countries, and they operate on extremely limited budgets. Several have morphed from local into national organizations such as the National Domestic Workers Association and National Taxi Workers Alliance.⁵³

A Downside?

Immigration has contributed to economic growth and technological innovation in many significant ways, but has it brought any problems? Certainly from the perspective of immigrants themselves it has, especially for those in low-skilled and low-wage jobs, and even more for the most vulnerable of all, the undocumented, who in 2017 made up nearly 5 percent of the US civilian workforce or 7.6 million people.⁵⁴

Low-skilled immigrants may earn more money than in their home countries, but by US standards their pay is often low, the hours long, and the benefits few or absent. There are also perils on the job. Immigrants work in more dangerous industries and occupations than natives, and in riskier jobs in terms of injuries and fatalities.⁵⁵ Workers in agriculture, and meat and poultry processing, for example, are exposed to toxic pesticides, hazardous equipment, crush injuries, repetitive motion, and falls; construction workers are subject to hazards involving high elevations, large cutting tools, and heavy lifting.⁵⁶ During the coronavirus epidemic, meatpacking workers (as well as the large share of immigrant frontline health care workers) suffered notably high rates of infection and death. As one account of meatpacking plant hot spots observed, “The chief risks [came from] being in close proximity to other workers. A thousand people might work a single eight-hour shift, standing shoulder to shoulder as carcasses whiz by on hooks or conveyor belts. Often, workers get only a second or two to complete their task before the next hunk of meat arrives. The frenzied pace and grueling physical demands of breaking down so many dead animals can make people breathe hard and have difficulty keeping masks properly positioned on their faces.”⁵⁷

In the 2020 COVID-19 recession, millions of immigrants were especially vulnerable to losing their jobs given their overrepresentation in many of the hardest-hit sectors of the economy: hotels and restaurants, cleaning services for office buildings, and personal services such as hair and nail salons, in which large numbers of immigrant business owners as well as workers faced financial devastation. According to an analysis by the Migration Policy Institute during the pandemic, 20 percent of the US workers in vulnerable industries facing massive layoffs were immigrants. For a substantial number of them, including undocumented immigrants and those who obtained green cards in the past five years, this situation was worsened by their inability to receive federal means-tested benefits that were available to other workers in times of need.⁵⁸

But what about the impact for native-born workers? Has large-scale, post-1965 immigration caused difficulties for them? Much of the academic and policy literature on immigrants and the US economy centers around the question of whether immigrants compete with established Americans in the workforce, taking their jobs and depressing their wages. Not surprisingly, politicians have entered the fray, with Trump putting his viewpoint in no uncertain terms. “They’re taking our jobs,” he proclaimed on the campaign trail in 2016. “They’re taking our money. They’re killing us.”⁵⁹ Academic commentators don’t use this language, but some of them, too, worry that immigrants may be hurting native workers.

The general consensus among economists, however, is that such fears are greatly exaggerated. This is the conclusion of the 2017 National Academy of Sciences report assessing the empirical literature on the economic impact of US immigration as measured over a period of more than ten years, including its effects on the employment and wages of native-born workers. For one thing, the impact of immigrants on the wages of the native-born overall has been very small. To the extent that studies found negative wage effects, they were most likely to occur among earlier immigrants and native-born high school dropouts with job qualifications similar to those of the large share of low-skilled workers among immigrants.⁶⁰ Peri’s analysis of the period between 1970 and 2014 comes to even more positive conclusions: immigrants were not responsible for the stagnating or declining wages of noncollege workers, either nationally or in regions with high immigration. Among the possible reasons he puts forward are that highly educated immigrants boost local productivity, and immigrant small firms and start-ups may generate local opportunities for native-born workers, further increasing demand for them that offsets any increase in labor supply.⁶¹

In line with this analysis, the National Academy of Sciences report refers to several studies revealing positive effects of skilled immigration on the wages and employment of both college- and noncollege-educated natives. Such findings “are consistent with the view that skilled immigrants are often complementary to native-born workers, especially those who are skilled; that spillovers of wage-enhancing knowledge and skills occur as a result of interactions among workers; and that skilled immigrants innovate sufficiently to raise overall productivity.”⁶²

As for employment, fears about competition from immigrants are also overblown. There is little evidence that immigration significantly affects the overall employment levels of native-born workers according to the National Academy of Sciences report. One caveat the report mentions is research suggesting that immigration reduces the number of hours worked by native-born teenagers (but not their employment rate); another is some evidence that recent immigrants reduce the employment rate of prior immigrants. Although the job prospects of native-born workers in particular skill groups may be hurt by immigrant competition, as might happen, for instance, among construction and kitchen workers, immigrants may enhance opportunities for complementary native-born workers in the same fields in other skill groups, such as first-line building supervisors or restaurant waitstaff.⁶³ The case of African Americans illustrates a similar dynamic. Some scholars have asked whether immigrants are making it at the expense of native minorities, or as has been said, on the “back of Blacks.”⁶⁴ Tackling this question in a study of Los Angeles, sociologists Roger Waldinger and Michael Lichter argue that immigration may harm the most vulnerable, most poorly schooled, least skilled African Americans who lack access, through social networks, to fields in which immigrants have become concentrated; employers also generally prefer foreign over native-born lower-level workers. Even so, Waldinger and Lichter maintain that immigration may have had a net positive effect on Los Angeles’s African Americans as a whole given its role in swelling demand for the types of public service jobs in which better skilled African Americans have clustered and specialized, such as work in the postal service or public administration.⁶⁵

In general, immigrants, as I have said, create jobs for US-born workers (and other immigrants) by increasing demand for goods and services as well as through their entrepreneurial activities and innovation. Native workers, in addition, may respond to immigration by switching into other jobs, often for the better. Some research indicates that American-born workers have reacted to the inflow of immigrants by moving into occupations that are better shielded from the newcomers and even upgrading their own skills. A comparison of the labor markets of states that received many low-skilled immigrants between 1960 and 2000 and those that received few showed that in the states receiving many such immigrants, less-educated American-born workers tended to shift out of lower-skilled jobs and into work requiring more communication skills.⁶⁶

Overall, then, the fallout for US-born workers in terms of immigrants taking jobs and hurting their earnings has been minimal. And when it comes to the larger picture—and the economy as a whole—immigrants, as we have seen, have been beneficial in a great many ways.

Immigrants have been a force for change and innovation as they have helped to build and strengthen America’s economy. In an earlier time, immigrants helped to lay the railroads and build our cities; they provided labor for steel mills, auto plants, and textile factories in the rising industrial economy. The sheer pace and scale of manufacturing’s growth in turn-of-the-twentieth-century America, it has been argued, may well have depended on the labor of European immigrants and their children.⁶⁷

In the contemporary era, immigrants have been pioneering new industries and fueling our information age, from Google to Amazon, serving as a linchpin of the high-tech sector, now one of the national economy’s largest components. High-tech industries employed nearly fifteen million workers in 2016 according to the Bureau of Labor Statistics, accounting for about one-tenth of all employment in the country while contributing 18.2 percent of the economy’s total output, or a remarkable $5.3 trillion.⁶⁸ Immigrants have played a major role in starting, running, and developing new tech companies, and spearheading innovations in them, so that it is not an exaggeration to say that the success of much of the tech sector has depended to a large degree on immigrant talent.

Immigrants have created new types of businesses in other sectors too, while reinvigorating, expanding, or sustaining many existing enterprises. In filling service industry jobs at every level, immigrants have also introduced changes, from reducing shortages in medical and health care professions to stimulating job growth in an array of lower-level occupations. Because the tens of millions of immigrants use services and consume goods for themselves and their families, they have boosted the economy and job growth here.

A final set of questions remain that have arisen in the wake of the coronavirus epidemic that ravaged the country in 2020. At the time of this writing, it is too early to tell how severe and lasting the scars will be for immigrants and the economy. Among the many unknowns is the degree to which immigrant businesses, including hard-hit nail salons and restaurants, will fail or eventually bounce back, or be replaced by new ones. Or the extent to which service jobs in such devastated industries as hotels, for which there was strong demand for immigrants before the pandemic, will revive afterward. While the economy was badly hurt during the coronavirus recession, immigrants, it is safe to say, will continue to play a significant role in America’s economy in the foreseeable future, including renewing and revitalizing it when the pandemic ends—one of the topics I take up in the concluding chapter.