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April 07, 2007

How Immigrants Affect California Employment and Wages

Were California an independent nation, it would rank second in the world – just behind Russia – in the number of international migrants it receives. Within the U.S., California easily ranks first: in 2004, the state was home to nearly 30 percent of the nation’s foreign-born population, and immigrants accounted for one-third of its 15 million workers (including two-thirds of those without a high school diploma). Moreover, between 1990 and 2004 alone, California saw a 40 percent increase in its foreign-born population, including a large proportion of newly arrived and poorly educated Mexican laborers.

Thus, as Giovanni Peri points out in his latest report, it would be logical to assume that “if immigrants hurt the labor market options of native workers, Californians should feel the most pain.” Yet in February, the Public Policy Institute of California published research by Peri demonstrating that, in fact, native-born Californians benefit from immigration in the form of real wage increases ranging from .2 to 7 percent.

In “How Immigrants Affect California Employment and Wages,” Giovanni Peri, Associate Professor of Economics at the University of California, Davis, analyzes the decennial Censuses and American Community Survey data to determine how native workers’ behavior and wages responded to the inflow of immigrant workers between 1960 and 2004. Peri concludes that during 1990-2004, immigration induced a 4 percent real wage increase for the average native worker, with increases ranging from .2 percent for native workers without a high school diploma to between 3 and 7 percent for native workers with at least a high school education.

The report also finds that it is not native workers, but previous immigrants who fare the worst under increased immigration. According to Peri, during 1990-2004, less recent immigrants may have lost between 17 and 20 percent in foregone wage increases – that is, wage increases they might have received had sealed borders prevented immigration and made their services increasingly scarce.

Download the full report from the Public Policy Institute of California website; http://www.ppic.org/content/pubs/cacounts/CC_207GPCC.pdf

Posted by VisaLawyer at April 7, 2007 12:41 PM

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