New impact studies show American economy will suffer without unskilled immigrant labor

LatinaLista — Continuing revelations from last week’s Postville immigration raid at the Agriprocessors kosher meat plant paints the employer as a far worst criminal than any of the 389 detained for using false social security card numbers and/or being undocumented.
In fact, in the eyes of the business community, the management at Agriprocessors has delivered a sucker punch to those businesses who are trying to both work with the government in adhering to employment accountability in hiring immigrant labor and prove to the public that they don’t go out of their way to employ undocumented labor or exploit and abuse their workers as are the allegations with Agriprocessor.
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But their job just got a lot harder and if the findings of a new study are any indication, businesses will have to join together to lobby Congress to do something constructive about immigration reform just so they can stay afloat.


According to the Department of Labor, half of the jobs created in the next five years will require only a high school education. This kind of labor is known as “unskilled labor.”
American businesses used to be able to count on this kind of labor from the rank-and-file of the nation’s youth. In 1960, half of all American men dropped out of high school to look for any kind of manual labor.
Times have changed. It’s being reported that only 10% do today. So, what’s not surprising is that of all the new jobs created in the last decade, 50% have been filled by immigrant labor.
As much as we would like to think that all facets of our economy demand skilled labor, the truth is that the backbone of our economy rests with unskilled labor. A Pew Study found that there is an ANNUAL need for 500,000 unskilled foreign workers in this country, but for some unknown reason only 5,000 visas are issued each year to unskilled workers.
It has created a crisis that forces businesses to adopt “don’t ask-don’t tell” policies just to garner a workforce to keep them in business.
The crisis has also spawned the unusual step of diverse businesses forming coalitions to pressure Congress and/or state legislatures to do something about immigrant laborers.
This persecution of businesses has also been the impetus of a new website called ImmigrationWorks USA that is a grassroots campaign involving business owners to speak out on behalf of immigration reform. Also, new economic studies focusing on the value of immigrant labor rounds out the long tail of how businesses are addressing this crisis.
Just this week, two new studies were released: ImmigrationWorks USA: The New Battleground: Immigration in the States – The Outlook for Business and a new study, conducted by The Perryman Group, titled An Essential Resource: An Analysis of the Economic Impact of Undocumented Workers on Business Activity in the US with Estimated Effects by State and by Industry .
Both reports reiterate the need for the federal government to pass immigration reform that allows businesses to keep a workforce that is legal and productive.
ImmigrationWorks USA reports examines state-by-state the legislative actions in passing their own immigration reform laws, the effect of E-Verify in those states that have made it mandatory and the impact of an enforcement-only approach to illegal immigration.
The Perryman report found that:

There are currently approximately 8.1 million undocumented workers in the US economy. If these workers were removed from the workforce, the effects would ripple through many industries and the ultimate job losses would be even higher.
Undocumented immigrants comprise a large component of the workforce in some industries and geographic areas. In 10 states, the percentage of undocumented workers as a share of the workforce equals or exceeds the national average of 5%. Arizona has the highest proportion with 12%.
For the US as a whole, the immediate negative effect of eliminating the undocumented workforce would include an estimated
o $1.757 trillion in annual lost spending,
o $651.511 billion in annual lost output, and
o 8.1 million lost jobs.
Per-capita losses in a number of states include thousands of dollars in annual economic activity.
There is clear evidence that undocumented workers are currently making contributions to the US economy and society, especially in certain industries and occupations.
If all undocumented workers were removed from the workforce, a number of industries would face substantial shortages of workers, and Americans would have to be induced into the labor pool or provided incentives to take jobs far below their current education and skill levels.2 For this phenomenon to occur to a meaningful extent, substantial wage escalation would likely be necessary, thus eroding competitiveness in global markets.
As the domestic workforce becomes older, more stable in number, and better educated, the US production complex increasingly requires foreign, low-skilled workers.

These findings are not surprising and are common sense — for those who can see past the hateful and fearful rhetoric from a group that wants to demonize undocumented immigrants and blind everyone to their true overall value to the economy.
You don’t have to take Latina Lista’s word on it. Just google GOOGLE NEWS for Arizona lawmakers and guest worker program and you hit several articles recounting how Arizona realized, too late, that prohibiting businesses from hiring undocumented labor is setting the course for an economic doomsday in the state.
The same will surely happen in the rest of the country in those industries where undocumented labor is the backbone.
It’s one thing to fight for the spirit of the law but it’s another to be complicit in setting the country towards an economic downturn that puts the quality of life of all Americans at risk.

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3 Comments

  1. Horace said:

    Businesses that depend on illegal labor are essentially criminal enterprises. Our immigration policies must not be based upon profits that exploit the use of illegal aliens. I’m sure that even drug dealers contribute to the national economy in their illicit sales networks and in their spending on mansions, automobiles, yachts and planes, but we would never refrain from prosecuting them. The day that we capitulate to big businesses in their demands for cheap labor by exploitation is the day our nation loses its basis for legal equity under the law. Some things shouldn’t be measured in terms of profits.

  2. Publius said:

    What’s the smallest amount of money it would take for you to sell out your country for the benefit of foreigners and their unethical employers, Marisa? You could rationalize this all you want, Marisa, but that’s what you’d be doing when you would acquiesce to being coerced by people who’ve violated our laws by crossing our borders and their Chamber of Commerce exploiters. I don’t trust anyone who would concede holding our nation hostage to illicitly acquired wealth or immigration status. This is a matter of principle and ethics that are sadly lacking in the character of the illegal immigrant advocates. I suggest that most Americans would resent the imposition of these people for decades to come.

  3. Daniel said:

    LL: “…businesses will have to join together to lobby Congress to do something constructive about immigration reform…”
    This guy offers some of the best solutions I’ve heard in 5 years.
    The Wall Street Journal’s Jason Riley “Let Them In” The Case For Open Borders

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