Coalicion Nacional por la Dignidad y Amnistía para todos los Inmigrantes Indocumentados

Diversos

Experts: Illegal Workers Pay Dividend

The New York Times/By Reuters
October 15, 2000

     Customers at a small Indian restaurant tucked away in lower Manhattan are blissfully unaware that an illegal immigrant from Mexico helps keep down the cost of their crispy rice crepes. One of the estimated 6 million illegal immigrants living in the United States, the Mexican -- known to his employer simply as ``Amigo'' -- scrubs lentils off plates at the eatery six days a week for about $300 to $350, the manager says. She acknowledges that those wages are much lower than what it would take to get a legal worker to take a job as dishwasher. The scenario at the Indian restaurant is not at all unusual, economists say. With the U.S. unemployment rate touching 3.9 percent in September -- the lowest in 30 years -- businesses are more willing than ever to hire staff without legal authorization to work in the United States. In fact, experts say, illegal workers are playing a crucial role in the U.S. economy by filling jobs at lower wages and consequently helping to keep inflation at bay.

    The Indian restaurant owner, who asked not to be identified, says he can't afford to pay higher wages to his employees as that would leave him with the unpleasant choice of either raising prices and losing customers, or accepting lower profit margins.

    Not that relying on illegal immigrants in the New York City restaurant industry is anything new. It is a practice that has been going on for years, restaurateurs freely admit. But hiring so-called ``undocumented aliens'' has become an even more enticing proposition today with the dwindling numbers of legal workers available, some economists say.

    ``It's an open secret,'' said the restaurant owner, referring to eateries using illegal immigrants to fill menial and low-paying jobs. ``They play a key role.... It's a question of getting whoever will work.''

    Mark Killingsworth, a labor economist at Rutgers University in New Jersey says both legal and illegal immigrants have stepped in to fill the gaps in the labor market. ``The need for employers to fill positions is clear, and we're running out of native-born workers,'' he says. While illegals are keeping the U.S. economic expansion rolling along by filling low-level but essential jobs, they are also helping to keep prices in check.

    One of the most remarkable aspects of the current expansion is that inflation has remained tame -- the consumer price index increased 3.4 percent for the 12-month period ended in August -- even as the unemployment rate has dropped to historic lows. In other words, employers with jobs to fill have generally not restored to bidding up wages even though legal workers are in such short supply.

    A steady stream of new immigrants may be part of the explanation, economists say. ``It's clear that part of the reason why there hasn't been an outburst of wage inflation is that there are legal and illegal immigrants here,'' Killingsworth says. ``It's been a puzzle why wages haven't gone up and immigration of all kinds has acted as a buffer.'' ``They're stopping America from paying a huge inflation penalty,'' he says, referring to illegal immigrants. About 2 percent to 2.5 percent of the current 142 million strong U.S. labor force is made up of illegal workers, enough for them to play an important role in keeping down wages, estimates Jeffrey Passel, a demographer and immigration expert at the Urban Institute, a Washington-based non-profit policy research group.

    A majority of the illegals work in menial, entry-level jobs as meatpackers, tailors in garment factories, farm workers, dishwashers and cooks, and construction laborers. Since they can ill-afford an encounter with law-enforcement agencies, experts point out, illegals are vulnerable to abuse by their employers who often pay wages below the legal minimum and deprive them of benefits guaranteed to legal workers. The economy's seemingly insatiable appetite for workers is such that Chinese immigrants smuggled in by ships into the New York area find jobs as soon as they arrive, says Ko-Lin Chin, a sociologist at Rutgers and an expert on illegal immigration from China.

    LOWER WAGE-INFLATION It is difficult to measure the impact of illegal immigration on economic variables because such workers are by definition undocumented. Even so, employment and wage inflation data in the industries where illegals tend to be concentrated suggest they are holding down wages, and as a result, prices. Unit labor costs account for the largest percentage of employers' production costs. The average hourly earnings of production workers in the apparel and other textile products industry, for example, grew by a mere 2.3 percent in August from a year earlier, compared with a 3.6 percent increase in hourly earnings of all private-sector workers, according to preliminary, non-seasonally adjusted data from the Bureau of Labor Statistics.