Wall Street Journal
By Eric Morath
February 23, 2017
The Trump administration’s push to crack down on illegal immigration and deport undocumented workers living in the U.S. could have significant ramifications for the labor market.
Here are four reasons why.
About 5% of the Workforce Is Undocumented
There were eight million undocumented immigrants working or looking for work in the U.S. in 2014, the most recent data available from the Pew Research Center. The figure, about 5% of the civilian workforce, exceeds the number of jobs added by U.S. employers the past three years.
Deportation of millions of those workers could lead to labor shortages and weaker economic growth. Some economists say deportations would cut already low unemployment among legal residents and push up incomes, especially in low-wage sectors. (Though not necessarily. Employers could opt to automate or cut back production.)
Department of Homeland Security officials said their limited resources mean they would focus on immigrants who pose a public-safety risk. But they also said immigrants aren’t exempt from deportation just because they don’t fall into a priority group.
Undocumented Immigrants Are Younger and More Likely to Work
Among all illegal immigrants, a significantly higher share work than in the U.S. population as whole. The difference largely reflects that 92% of undocumented workers are between 18 and 64, while just 60% of the U.S.-born population is.
An aging population limiting labor-force expansion is a significant factor economists point to when explaining why economic growth has been mired at a very modest 2% rate since the recession ended in 2009. Unemployment is at historically low levels, but the share of Americans in the labor force is also near a 40-year low.
The growth in immigrants, legal and illegal, from 2006 through 2015, offset population losses for native-born Americans ages 25 to 54, the prime ages for working.
Employers have turned to legal and illegal immigrants to help counter the trend of an aging native-born population.
With the U.S. population growing only slowly, “international migrants may become the only source of growth for the working-age population,” said University of Michigan labor economists Donald Grimes.
Undocumented Workers Are Concentrated in Certain Industries
In theory, the 7.6 million people who were unemployed but seeking work last month could step into jobs vacated by illegal immigrants. But that would largely be at farms, meat-processing plants, restaurants and construction sites.
A shortage of labor could push up wages paid in those sectors. It could also increase the cost of groceries and meals out.
More than 1 in 6 agriculture-industry workers in 2014 were undocumented workers, compared with about 1 in 20 workers overall, Pew said. In the construction industry, 13% of workers were undocumented. And 9% of workers in the leisure and hospitality industry, which includes restaurants, were illegal immigrants.
It’s Not Just Border States That Are Affected
The states potentially most affected are widely spread.
More than 10% of workers in Nevada, a state with among the highest concentration of hospitality jobs, were illegal immigrants in 2014, according to Pew. Border states of California, Texas and Arizona were also among the top five states for share of undocumented immigrants in the labor force.
But more northern states with dense urban areas—New Jersey, Maryland and New York—were also above the national average.
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