Immigration and the Texas Economy - We Must Fix Immigration Laws to Sustain Economic Growth in Texas

Immigration - Texas EconomyMuch of the growth of the American and Texas economies, and even innovation for that matter, comes for the immigrants who find their way here to make a better life for themselves and their families. The net positive is that this also makes for a better quality of life for all Americans. Texas is growing, and it is growing rapidly. Texas Governor Rick Perry has often stated that over a thousand people a day are moving to Texas from other states. That growth creates a demand for labor. Some of that demand is met by those "new Texans" who are moving here from other states, but much of it is not and this is where we need immigrants to fill the gap.

Note: Photo above reposted from a related article on immigration and the Texas economy from the Dallas Morning News by Sheryl Jean titled "Immigration Helps Boost the Texas Economy".

As Texas Director for Cafe Con Leche Republicans, I came across an article posted on their website written by Alex Nowrasteh titled, "Immigration is Good for the Texas Economy" and would like to share it with you. The article was originally posted in the Houston Chronicle and is being reposted here in its entirety with permission from the author.

Immigration is Good for Texas' Economy

By Alex Nowrasteh, Cato Institute's Center for Global Liberty and Prosperity

Many immigration opponents are focusing their ire on Republicans who support expanding legal immigration - an important part of immigration reform - to dissuade them from restarting the reform effort. Radio host Laura Ingraham recently wrote that Congressman Ted Poe, R-Humble, who supports an expanded guest worker visa program, "does not see what (immigration) does to U.S. wages."

Does Ingraham realize she's making the same argument that famed union organizer and immigrant-worker opponent Cesar Chavez made on behalf of his United Farm Workers? Chavez said: "As long as we have a poor country bordering California, it's going to be very difficult to win strikes." By his rationale, if the number of migrant workers could be restricted, he could raise wages - something that union organizers from Samuel Gompers to today have realized.

But Ingraham, like Chavez did, exaggerates the downside and ignores the economic benefits of immigration for Americans - an especially silly omission in Texas.

To address the wage concern directly, immigrants can only temporarily drive down wages if they compete directly with American workers. That rarely happens. That's because, for the most part, immigrant and American workers have different skills.

A third of immigrants have less than a high-school degree while only 8 percent of U.S.-born American workers do. Immigrants with less than a high school degree just don't work the same jobs as U.S.-born, high school or college-educated workers do.

Dartmouth economist Ethan Lewis found that because immigrants tend to speak English poorly, at least initially, many specialize in jobs that don't require much English. That creates opportunities for Americans to specialize in jobs that require more communication skills in English - like management - that are also higher paying. Take restaurants as an example. Immigrants with poor English language skills are the busboys and dishwashers - jobs that don't require much communication. Instead of working those jobs, lower-skilled Americans use English skills as hosts, waiters and managers - all higher-paying occupations.

More immigrants working jobs at the bottom pushes up American workers who would otherwise be working there. American and immigrant workers are not interchangeable.

But immigrants aren't just workers; they are also consumers who create jobs by buying goods and services from Americans. Asian and Hispanic-Americans have almost $2 trillion in national purchasing power. Now, how does this stack up in Texas?

In 2006, on the eve of the housing collapse, Texas' population was 15.7 percent immigrant. In July of that year, Texas' unemployment stood at 5 percent. Today, immigrants are 16.4 percent of Texas' population and the unemployment rate was 6.2 percent - more than a full point below the national average.

Lower taxes and fewer regulations have produced a better recovery in Texas than in other states. As a result, immigrants and native-born citizens have flocked there. The number of immigrants has increased by more than half a million since 2006, while the number of native-born Americans increased by 2 million. High wages, not low ones, have attracted people to Texas.

Texas has also avoided state-level immigration enforcement bills, and a lot can be learned about what that means by comparing Texas to Arizona, a state that has cracked down on immigration enforcement since January 2008.

Texas' unemployment rate has been below Arizona's since February, 2008 - one month after Arizona's first immigration enforcement bill went into effect. Arizona then passed a more stringent bill in mid-2010. In 2012, the immigrant population in Arizona was 53,000 below what it was in 2006. Arizona's unemployment rate is currently 2 full points above Texas', at 8.2 percent.

Ingraham and other immigration restrictionists think kicking out unauthorized immigrants will create jobs for native Texans. Arizona's restrictive immigration laws likely worsened its economic decline - proving once again that reducing the number of people does not create more jobs or raise wages. Immigrants are attracted to economic growth and, in consequence, help the economy grow even more once they arrive.

Note: Alex Nowrasteh serves as the immigration policy analyst for the Cato Institute's Center for Global Liberty and Prosperity.

 

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