The mood in this country is increasingly anti-immigrant. The Trump administration has taken a hard line against immigration, to put it mildly.
Our law firm has been around for 60 years, and I never thought I would see Iranian doctors stopped at Kennedy Airport because of a travel ban signed by President Donald Trump. The administration used security concerns to justify excluding foreign nationals based on their countries of origin, and indeed, the Supreme Court upheld the most recent version of the travel ban. But another justification for excluding people is the fear that immigrants are taking our jobs. It is this fear that is most widespread and insidious. And it is not readily apparent whether it is well-founded.
Perhaps as you dropped off a child for freshman year of college, you’ve held a similar fear, as you wondered whether students from Asia and South Asia would be the kids studying on Friday night, the ones who would make the grade and go to medical school, the ones who would compete in the same labor market with American kids.
These fears, real or imagined, animate the political discourse. It is easy to give a knee-jerk assessment: “Of course they are taking our jobs,” or, “Of course not, they are helping to grow the economy!” Still, it is worth asking the question: Are foreign students affecting the wages and job prospects of U.S. workers?
Academia has studied the effects of foreign workers on the wages of U.S. workers. Economists Gianmarco I.P. Ottaviano and Giovanni Peri surveyed this topic for the National Bureau of Economic Research, a repository of unbiased economic research. They concluded that immigration increases both labor participation and average wages for U.S. workers, but only when there is a difference in skill sets between U.S. and foreign workers. However, if there is not a difference in skill sets, and foreign workers are able to substitute for U.S. workers, average wages will decrease.
That is, if the U.S. and foreign workers are perfectly substitutable, then an influx of foreign workers will replace the U.S. workers and depress wages. More workers on the same assembly line with the same exact skills will increase the labor supply and depress wages. However, if a foreign worker is not substituting for a U.S. worker, but fulfilling a slightly different role, filling gaps in the labor market, then all evidence points to a conclusion that might surprise some: U.S. wages will increase, immigrant wages will increase, and the economy will expand.
This makes sense in theory, in practice and anecdotally. If Elon Musk did not leave South Africa to study in the United States and obtain a visa through employment, it would have been much less likely that PayPal, SpaceX and Tesla Motors would have come about. If Sergey Brin’s parents had not brought him here from the Soviet Union, perhaps we would have gotten Yahoo, but he would not have co-founded Google. If Stanford University’s PhD program in electrical engineering did not have its pick of the international litter, then foreign students educated in the United States would return to their countries, and the next innovative multibillion-dollar company would not emerge here.
The skill set determines whether immigrant workers expand our economy, raise our wages and create companies, opportunities and jobs, or replace us with lower-paid workers. The answer is to fine-tune our immigration laws and their enforcement, to incorporate foreign students who develop unique skills into our workforce, and to discourage companies from exporting U.S. jobs to foreign workers merely because they will accept lower wages.
So long as we allow unique workers to participate in our economy, we will all reap the benefits of rising wages, new jobs and an expanding economy.
Michael Wildes, a former federal prosecutor, is the managing partner of Wildes & Weinberg, specializing in immigration law. Wildes, who represented Melania Trump, is the author of the upcoming book “Safe Haven in America: Battles to Open the Golden Door.”