Economic Aspects of Authorized and Unauthorized Immigration, Dorrit Marks

Relationship between immigration and wages is not clear cut because it cannot be reduced to a simple one to one relationship. Wages depend on the supply of capital creating new jobs as well as the supply of labor. A greater supply of immigrant workers and the resultant cheaper cost of labor increases the return to employers who, in turn, use profits for further investment. The latter may create more jobs.

Quotation from The Economist: “...immigration, in the long run, has had only a small negative effect on the pay of America’s least skilled and even that is arguable.”

Costs and benefits: Immigrants have a small impact on public sector budgets. They mainly contribute to the economy through the taxes that they pay. Thus immigration has been net economic benefit nationally. But this isn’t necessarily the case at the local level.

Immigrants have filled half of the new jobs created over the past decade. They filled more than half of such jobs in the Midwest and Southwest.

Unauthorized immigration: The number of unauthorized immigrants currently in the US is 10 to 12 million persons. This equals about one third of the foreign born population. Growth of this number is estimated to be about 500,000 per year.

This number believed to be a response to economic demand for unskilled labor and also the difficulty of immigrating legally.


Mexican workers tend to fill the unskilled jobs. During the 1990s the US workforce absorbed 2.9 million Mexican workers.

Immigrants make a large contribution in high skilled occupations in the US. They were 8% of the 25 year old or older skilled workforce in the US in 1990 and 15% in 2004.

Over the last four years skilled immigrants have founded 25% of the new US public companies that received venture capital. Nearly half of this number came as students.

Demographers expect to see high immigration levels for both skilled and unskilled in the coming years.