Would the 2013 immigration reform bill have allowed immigrants to take American jobs?

DNC-logo-on_white-sq-250“Myth: Immigration reform will allow illegal immigrants to take away jobs from hard-working Americans.”

—The Democratic National Committee, from its “Your Republican Uncle” website, November 2013

 

Overview

Not every illegal immigrant would take away the job of a hard-working American citizen, but it’s likely some would.

The Facts

Our examination of the Democratic National Committee’s “Your Republican Uncle” website has spanned so many months that the site has retired some of its original claims. The subject of this fact check is one of those retired claims.

The Internet Archive still has the original set of claims, and this justification accompanied the DNC’s claim about the job-taking myth:

Actually, immigrants are job creators. In 2011, for example, immigrants started 28% of small businesses in the United States. First generation Americans have also created big businesses over the years — you know, like, [sic] Google.

 

The DNC’s justification for its claim does not address the issue, for even if illegal immigrants welcomed through the immigration reform bill create jobs it leaves some hardworking Americans vulnerable to job loss. The DNC addresses the issue with a distraction. In logic and rhetoric this goes by the term “red herring.”

If the legally working illegal immigrants create enough jobs to employ themselves and ensure enough work for hardworking Americans then there’s no problem. But the DNC offers no detailed evidence at all to support, for example, the notion that an American displaced from one job will gain a better one through a company started by immigrants. The DNC’s justification is a thin feel-good tale apparently intended to make its target audience forget about American citizens who might end up with the short end of the deal on employment.

Did immigrants start 28 percent of small businesses in 2011?

The DNC cites a report from the bipartisan and pro-immigration reform Partnership for a New American Economy. Living up to the DNC’s billing, the report says immigrants started 28 percent of small businesses (bold emphasis added):

Over the last 15 years, while native-born Americans have become less likely to start a business, immigrants have steadily picked up the slack. Immigrants are now more than twice as likely as the native-born to start a business and were responsible for more than one in every four (28 percent) U.S. businesses founded in 2011, significantly outpacing their share of the population (12.9 percent).

 

Note that in addition to saying immigrants start many new businesses, the report says the likelihood that native-born Americans will start a business has entered a decline. We failed to find evidence the report considers a cause-and-effect relationship between those two trends. Could the increase of business start-ups by immigrants discourage native-born Americans from starting their own businesses?

We also note that the survey data do not represent the population of illegal immigrants reform legislation would legalize. U.S. immigration policy carries preferences for skilled workers. Illegal immigrants, in contrast, tend to fill jobs calling for unskilled labor.

The Congressional Budget Office estimated the effects of the 2013 immigration reform proposal and judged it would increase the unemployment rate. And given the CBO’s expectation that legalized immigrants would participate in the labor market at higher rates, legalized immigrants will likely fill jobs otherwise filled by regular citizens.

CBO and JCT expect that new immigrants of working age would participate in the labor force at a higher rate, on average, than other people in that age range in the United States. Relative to CBO’s projections under current law, enacting the bill would increase the size of the labor force by about 6 million (about 3½ percent) in 2023 and by about 9 million (about 5 percent) in 2033, CBO and JCT estimate. Employment would increase as the labor force expanded, because the additional population would add to demand for goods and services and, in turn, to the demand for labor. However, temporary imbalances in the skills and occupations demanded and supplied in the labor market, as well as other factors, would cause the unemployment rate to be slightly higher for several years than projected under current law.

 

So not only might newly legal immigrants displace hard-working Americans on the job, the overall unemployment rate would increase. Again, predicting the number of displaced workers would prove difficult, but the reform bill clearly placed the jobs of some hardworking Americans at risk.

“Immigration reform would create over three million jobs”

Our research uncovered a Washington Post blog post claiming immigration reform would create over three million jobs. A result like that, taken at face value, might support the DNC’s claim.

We found Post’s blog carries a misleading face value. The increase in jobs comes associated with an increase in population:

The most important finding, for the purposes of the debate, is that the Gang of Eight immigration reform proposal would create 3.22 million jobs by 2024, and boost GDP by 1.63 percent. “We estimate a significant increase in both the population and the number of workers paying taxes in the United States as a result of these changes in legal immigration limits,” the analysis says.

 

A larger population, with the employment rate held constant, leads to more jobs. Obviously if the employment rate is held constant the increase in jobs has no effect on the employment rate.

It’s also worth pointing out that growing ethnic minority populations present an opportunity for new business growth, as with ethnic food sales. Perhaps immigrant entrepreneurs have seized on a natural advantage in exploiting those business opportunities.

There’s no answer here or in the rest of the DNC’s response to your Republican uncle: The 2013 immigration reform bill would allow illegal immigrants to take jobs from hardworking Americans. The Republican uncle has a valid point. The DNC’s response provides a counter argument of sorts to his claim, but doesn’t make the claim a myth.

The DNC’s argument papers over the differences between generally low-skilled illegal immigrant workers and the highly skilled immigrants who do the most to spur economic growth.

Summary

“Myth: Immigration reform will allow illegal immigrants to take away jobs from hard-working Americans.”

False statement icon

It’s no myth, though it’s hard to gauge the impact.

“Actually, immigrants are job creators. In 2011, for example, immigrants started 28% of small businesses in the United States.”

True Statement icon red herring fallacy icon Fallacy of ambiguity icon

Yes, immigrants are job creators and may have started a disproportionate number of small businesses in 2011. Neither proposition serves as a guarantee against job loss for hard-working Americans as a result of the immigration reform bill. The statistics on business starts may support the proposition that immigrants are displacing the jobs of hard-working Americans. Those statistics may also neglect differences between entrepreneurial immigrants and the illegal immigrant population in the United States.

 

References

The Democrat’s Guide to Talking Politics with Your Republican Uncle.” Your Republican Uncle. The Democratic National Committee, Nov. 2013. Web. 16 Feb. 2015.

Fairlie, Robert W. “Open For Business: How Immigrants Are Driving Small Business Creation In The United States.” Partnership for a New American Economy. Partnership for a New American Economy, 14 Aug. 2012. Web. 16 Feb. 2015.

The Economic Impact of S. 744, the Border Security, Economic Opportunity, and Immigration Modernization Act.” Congressional Budget Office. Congressional Budget Office, 18 June 2013. Web. 16 Feb. 2015.

Sargent, Greg. “Study: Immigration Reform Would Create over Three Million Jobs.” Washington Post. The Washington Post, 08 May 2013. Web. 16 Feb. 2015.

Goss, Stephen C. Letter to Sen. Marco Rubio. 08 May 2013. The Washington Post. The Washington Post, 2013. Web. 16 Feb. 2015.

Ethnic Marketing—Turning Obstacles into Opportunities.” Agmrc.org. Agricultural Marketing Resource Center, n.d. Web. 15 Feb. 2015

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