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Little evidence of native displacement in report touted by Romney on immigrants and Texas job creation

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Wednesday, October 19, 2011 at 3:35 pm

Former Massachusetts Gov. Mitt Romney says almost half of the jobs created in Texas since the start of the economic downturn have gone to unauthorized immigrants, an attack on his rival for the GOP presidential nomination Texas Gov. Rick Perry.

During the presidential debate in Nevada last night, Romney said to Perry: “…you probably also ought to tell people that if you look over the last several years, 40 percent, almost half the jobs created in Texas were created for illegal aliens, illegal immigrants.”

Romney was citing a report by the Center for Immigration Studies, which former Bush speechwriter David Frum recently used as proof that there is “a pattern of job displacement” in the Texas economy. He and many immigration opponents believe the report shows that immigrants have taken jobs that native-born Americans used to hold.

The report claims that 81 percent of jobs created since 2007 went to newly-arrived immigrants, about half of which were unauthorized. It contrasts this claim with the fact that native-born Americans made up 69 percent of the population growth in Texas during that times span, concluding that “immigrants have been the primary beneficiaries” of job growth under Perry in Texas.

The Perry campaign has responded to the report by pointing to Department of Homeland Security figures (PDF) estimating that 60,000 unauthorized immigrants arrived in Texas from 2007 to 2010, a much smaller figure than the 113,000 new working-age unauthorized immigrants estimated by the CIS report.

The report has other methodological issues, as Ray Perryman, a Texas economist, told the Washington Post last month. He argues that the report could be overestimating the proportion of undocumented immigrants in Texas who have jobs, and underestimating the number of native-born Americans with jobs.  He also says that the report fails to take into account job losses by immigrants who were in Texas before 2007, which could be disguising the fact that new immigrants disproportionately took jobs that other immigrants used to have.

This last point is important, and is supported by the findings of  economists who argue that newly-arrived immigrants tend to compete for jobs with immigrants already in the country, rather than with the native-born. A 2006 paper by economists Gianmarco I.P. Ottaviano and Giovanni Peri found that new immigrant workers in the 1990s and early 2000s decreased the average wages of other immigrants by almost 20 percent, while increasing the average wage of native-born Americans by about 2 percent.

This suggests much fiercer job competition among fellow immigrants than between immigrants and native-born Americans, possibly because jobs that immigrants tend to do actually complement the jobs of the native-born. This suggests that the more immigrants there are, the higher wages are for native-born Americans.

Needless to say, this is not a widely held belief among Republican voters, who according to recent poll numbers are abandoning Perry for businessman Herman Cain, who recently joked that the U.S.-Mexico border should have an “electrified fence” capable of killing potential illegal crossings. It’s quite possible that the mere fact that Texas employed many new unauthorized immigrants after 2007 will be enough to turn conservative voters against Perry, regardless of the actual effects on the native-born.

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