PPIC Logo Independent, objective, nonpartisan research
Fact Sheet · March 2011

Immigrants and the Labor Market

Sarah Bohn and Eric Schiff

  • Immigrants constitute a sizeable and growing share of the labor force.
    In 2009, immigrants accounted for 17% of the U.S. labor force, up from just over 5% in 1970. In California, immigrants accounted for nearly 37% of the labor force, up from 11% in 1970.
  • Immigrants are now less likely to be unemployed than native-born workers.
    In 2009, 10% of immigrants in California reported being unemployed and seeking work, compared to 11% of native-born workers. Among workers without high school diplomas, immigrants are half as likely to be unemployed as natives (12% vs. 23%). Immigrant men are less likely than native-born men to be out of the labor force (9% vs. 15%), but immigrant women are more likely than native-born women to be out of the labor force (33% vs. 25%). In the hard-hit construction sector, the unemployment rate among immigrants was 15% compared to 19% for native-born workers. Among less-educated construction workers the disparity is even wider: 17% unemployment for immigrants vs. 30% for native-born.
  • Immigrant workers’ education levels tend to be at either extreme.
    Most immigrant labor market participants are either college educated or have not completed high school. In California, 26% of immigrants in the labor market have bachelor’s degrees, compared with 35% of natives, and 35% of immigrants in the labor market do not have high school diplomas, compared with 7% of natives. Compared with the rest of the nation, immigrants without high school diplomas make up a larger share of California’s total labor force: 13% in California versus 4% for the rest of the U.S.
  • Immigrants’ education levels vary widely between employment sectors.
    The manufacturing sector was the largest employer of immigrants in California in 2009 (15%). Thirty percent of immigrants without high school diplomas were employed in the construction and manufacturing sectors. By contrast, 36% of college-educated immigrants worked in two main service industries: professional, scientific and technical services and health care and social assistance.
  • On average, immigrants earn less than native-born workers.
    Nationwide, the hourly wages of immigrants are 12% lower than the hourly wages of American-born workers. In California, the wage gap is much larger (26%). But for immigrants in California with college degrees the wage gap is much smaller (8%) than for those with high school diplomas or less (27%). On average, immigrant workers’ wages do not catch up to native-born workers’ wages over time. But they tend to grow at a faster rate initially, increasing as much as 9% more quickly than comparable native-born workers’ wages over the first 10-15 years after migration.
  • Immigrants are unlikely to drive down the wages of most Americans.
    Although debate remains, the vast majority of economic studies find that immigration has little or no effect on the wages of the average American worker. A recent PPIC study estimates that in California, immigration between 1990 and 2004 caused a 4% real wage increase for the average native-born worker. Most agree that low-wage native-born workers face the most competition with immigrants because, on average, these populations have similar skills; yet most studies that focus on the impact of immigration on low-wage workers find zero or very small adverse effects on wages.
  • Most Californians believe immigrants are a benefit to the labor market.
    In a PPIC poll in September 2010, 54% of respondents said that immigrants today are a benefit to California because of their hard work and job skills. This is down slightly from 58% in an August 2009 poll.

Sources: U.S. Census Bureau. G. Peri, “How Immigrants Affect California Employment and Wages” (PPIC, 2007). PPIC Statewide Survey, September 2009 and 2010.


Economic Trends Economy Jobs and Employment Population