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NEWS ANALYSIS : Studies Challenge View That Immigrants Harm Economy


Despite Gov. Pete Wilson's call this week for new restrictions on illegal immigration, a growing body of research challenges the popularly held view that immigrants are damaging California's much-battered economy.

Wilson's open letter to President Clinton endorsed the view that illegal immigrants steal jobs from natives, lower wages for everyone and fill jails, schools and hospitals while paying no taxes.

Clearly, the costs of immigration--in social services, education and health care--fall most heavily on areas such as California, which absorb the bulk of the immigrants. And the net impact of immigration is so difficult to calculate that data can be marshaled to support diametrically opposed views.

Nevertheless, some research shows that immigration can stimulate a region's economy and create jobs.

Moreover, a number of studies--from Princeton University, RAND, the Urban Institute and elsewhere--find little evidence to support the argument that immigrants take jobs from native-born workers in general, although there are exceptions in specific occupations.

Studies also fail to support the notion that immigrants lower wages for native-born workers.

In all, the findings confirm the traditional belief that immigration over the long term is a positive force that helps drive the state and nation's growth.

"The studies that looked for displacement (of American workers) generally don't find it," said Jeff Passel, director of the program for research on immigration policy at the Urban Institute in Washington. "They find that immigrants complement native workers rather than substitute for native workers."

One study by the Urban Institute found that foreign immigrants, legal and illegal, helped create more jobs in urban areas than the native population did. The reason, the author said, may have to do with the drive and motivation that prompts people to immigrate in the first place.

"For every increase of 100 people in the native population, employment grew by 26 jobs," said Maria Enchautegui, a research associate at the institute and the study's author. "For every increase of 100 in the immigrant population, employment grew by 46 jobs." The effects are more pronounced in non-manufacturing jobs, she said.

Other studies support the image of the job-creating immigrant entrepreneur. A 1991 survey by the Federal Reserve Bank of New York found that immigrant self-employment rates were at least 7% higher than the rate among native residents.

Of course, not everyone agrees with these findings.

Some researchers argue that the newest wave of immigrants differs markedly from previous generations: They are younger, less skilled, less educated and less able to integrate themselves into society.

The most notable study arguing that immigrants take jobs from natives was conducted by Rice University economics professor Donald Huddle. One low-skilled native worker was displaced, he concluded, for every four immigrants who enter the country.

Extrapolating from that figure, Huddle estimated that immigrants displaced 1.06 million such workers in 1992, at a cost of $6.1 billion to public assistance programs.

Huddle's study has been widely quoted by supporters of restricted immigration. But it also has drawn fire from academics critical of its assumptions. Among other things, critics have said Huddle's conclusion was based on visits by researchers to Houston construction sites, where Latino workers were presumed to be immigrants and to have displaced native workers.

Other research reaches conflicting conclusions about whether immigrants consume more in public services than they contribute in taxes.

A state survey of San Diego County concluded that illegal immigrants contributed $60 million in taxes while costing the county $206 million in state and local services, a net drain of $146 million.

Based on those numbers, California's auditor general estimated that the net cost of illegals to California at $3 billion--a number quoted by the Federation for American Immigration Reform, among other pro-restriction groups.

Nationally, Huddle's study concluded that legal immigrants consumed $19.5 billion more in services than they paid in taxes.

But those studies have drawn sharp criticism.

The chief complaints: They ignore the economic role of long-term immigrants, overstate the number of illegal immigrants, overestimate the amount of services such immigrants consume and understate the amount of taxes they pay.

"There is every reason to believe that long-term immigrants are at least on a par with natives in terms of costs and revenues," said the Urban Institute's Passel.

Other studies--including one by Los Angeles County--suggest that immigrants contribute more than they consume.

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