Silent Numbers

The economic benefits of migrant labor

Huei-Hsia Wu, Ph.D.
Boise State University
Department of Sociology

Mexican migrant workers, especially the undocumented, compose a large, growing, and integral part of the Idaho labor force; however, their influence on the Idaho economy is still poorly understood.
          The principal purposes of this article are (1) to provide a socio-demographic profile of undocumented Mexican workers including their numbers, quality, working conditions, employment and wage penalties, utilization of social services, and economic contributions in Idaho; and (2) to identify the possible factors affecting the social mobility and earnings outcomes of undocumented Mexican migrant workers.1
          The primary data sources in this research include: the 1990 and 2000 Public Use Microdata Survey (PUMS), 1994-2004 Current Population Survey (CPS) March Social and Economic Supplement and 1970-2004 American Community Survey (ACS), collected by the Census Bureau, the 1990-2002 INS statistics, collected by the Office of Immigration and Naturalization Services, and the 1994-2002 Mexican Migration Project data (MMP), collected by Douglas Massey since 1982.2

           This analysis illustrates that undocumented Mexican workers tend to have a lower level of education, English proficiency and length of immigration than non-Hispanic whites. In addition, due to a lack of legal status, undocumented Mexican workers are more likely to be employed at the secondary labor market (low-wage and low-skill manual occupations), toil in hazardous conditions, have very low rates of health insurance, and experience some measure of wage exploitation by employers.
          Despite these harsh living and working conditions, the undocumented Mexican work force helps stabilize the Idaho economy in several ways, including filling jobs at the bottom of the occupational spectrum, paying taxes, and displaying little dependence on government benefits. Main findings of this analysis include:

The number of undocumented Mexican migrant workers in Idaho

          The number of undocumented Mexican immigrants in Idaho between 2004 and 2005 was about 40,000-50,000, up from 20,000-35,000 in 1999. This represents approximately 46 percent of the total foreign-born population according to CPS 1994-2004 estimates. Undocumented Mexican workers accounted for approximately 5 percent of the entire Idaho labor force in 20043 and represent an increasingly integral and indispensable part of the low-wage labor force.

The years of entry of undocumented Mexicans

          Most undocumented Mexicans are recent immigrants — approximately 67 percent of them arrived within the last 10 years. Of total foreign-born Mexicans, about 85 to 90 percent were undocumented (Passel 2005). More than 92 percent of undocumented Mexican migrants were employed in the low-wage Idaho labor market, according to MMP 1994-2002 estimates.

Where undocumented Mexicans live in Idaho

          Before 1990, about 88 percent of undocumented migrants resided in six large states, often referred to as the “traditional gateway states.” These are Texas, California, Florida, Illinois, New York and New Jersey. Since the early 1990s, however, the share of undocumented migrants in these states declined to 61 percent. The sharpest growth rates of undocumented migrants are now in other regions, including the Rocky Mountains, the Midwest and the Southeast, where the undocumented population grew more than 114 percent in 2004.
          In Idaho's Canyon County, the estimated number of undocumented immigrant Mexicans range from 4,556 to 6,070. In 2005, Canyon County also has the state's largest number of Hispanics (30,138), followed by Ada County (16,483), Twin Falls (7,178), and Bonneville (7,116).

Mexican immigration is highly concentrated

          Both documented and undocumented Mexicans are heavily concentrated in the urban and suburban areas in Boise and Pocatello. In Boise, the heaviest concentrations of foreign-born Mexicans live in the Meridian, Garden City, and southeast neighborhood census tracts. About 37 to nearly 60 percent of Mexicans live within these tracts, which have a rate five times higher than the average concentrations of the total foreign born (about 25 percent) in Boise. In Pocatello, the immigrant Mexicans consentrate mostly in the northern Yellowstone Avenue neighborhood, the South Fifth Avenue and the southern area of 1-15 Avenue neighborhoods. More than 10.8 percent of the total Mexican population in Pocatello lived in these neighborhoods. That number was 6.4 percent higher than the average concentration (4.4 percent) of the foreign-born population in Pocatello. (See Figures 3 & 4).

Immigrant Mexicans are more likely to work than non-Hispanic whites
of the same age

          The CPS 1994-2004 estimates show that more than 18.7 percent of non-Hispanic whites are age 60 or older, while fewer than 3 percent of undocumented Mexicans are age 60 or older. Approximately 73 percent of undocumented Mexican workers are age 30 or younger, relative to 43.6 percent for non-Hispanic whites. More than 50 percent of the undocumented Mexican population age 18 or younger will soon become a new labor force in the local economy, compared to less than one-third of non-Hispanic whites age 18 or younger.
          Variations in age structure between natives and new immigrants, documented or undocumented, have important public policy implications. A large share of younger undocumented Mexican laborers suggests a larger amount of taxes paid by this younger population. Older Americans are more likely to need Social Security and Medicaid assistance and utilize medical services than the younger immigrant population. According to United Nations 2005 projections, during the 2002-2012 period, the number of workers age 55 and over will probably increase by 49.3 percent, compared to only 5.1 percent growth among those ages 25-54 and 9 percent growth among those ages 16-24.

Low levels of education and English proficiency

         Approximately 67 percent of undocumented Mexicans have a ninth-grade education or less, compared to 9.6 percent of whites. Although some individuals may be more highly educated, the data show that the highest educational level of undocumented Mexican workers in 2004 was an associate’s degree (the share was 1.2 percent). In contrast, 20.3 percent of whites had a bachelor’s degree or higher (CPS 1994-2004). In addition, roughly 35 percent of non-naturalized Mexicans, including the undocumented, spoke English very well, compared to 68.3 percent of naturalized Mexican workers and 81.3 percent of U.S.-born Mexican workers.

Undocumented Mexicans are overrepresented in manual labor jobs

          About 32 percent of undocumented Mexican workers and 40 percent of documented Mexicans were employed as agricultural laborers. About 53 percent of undocumented Mexicans worked in household service occupations, precision, food production, cleaning or as craftsmen, operators, fabricators, truck drivers or laborers. (See Table 1).

How immigrant Mexicans
find jobs

          A significant number of undocumented Mexican workers obtain jobs through the assistance of “coyotes,” or smugglers (4.8 percent). Others contract directly with employers (about 19 percent). Roughly 25 percent of undocumented Mexicans found a job by themselves and about 51 percent found a job through the Mexican communities in Mexico. Moreover, in 2001 independent contractors arranged jobs for about 63 percent of the migrant labor force in Idaho; 19.7 percent found employment through on-call workers and day laborers, 11.3 percent via temporary agencies, and 5.4 percent obtained jobs via contract company workers (U.S. Bureau of Labor Statistics 2003).

Undocumented Mexicans work longer hours, earn less, and have a
higher poverty rate than natives

          Undocumented Mexican migrant laborers work an average of 57.94 hours per week, surpassing the mean hours worked for foreign-born naturalized and non-naturalized Mexican workers by almost 20 hours. U.S.-born Mexicans work an average of 36.96 hours; non-Hispanic whites, 36.97 hours.
          Undocumented Mexican workers earn on average $4.94 per hour. This is less than the current $5.15 minimum wage and three times lower than that of all other workers in Idaho. Documented Mexicans earn an average hourly rate of $11.90, naturalized Mexicans earn $10.14, and non-Hispanic white workers earn $12.80 (CPS 1994-2002).
          In the Idaho labor market, the poverty rate of immigrant Mexicans, documented and undocumented, is substantially higher than that of U.S.-born Mexicans. Roughly 34 percent of undocumented Mexicans live below the federal poverty level ($17,050 annually for a family of four in 2004). That number is almost three times higher than the national rate in 2004. The poverty rate among foreign-born naturalized Mexicans is 12.5 percent, substantially higher than the 10.1 percent for native-born Mexicans, according to CPS 1994-2004 estimates.

Undocumented Mexicans pay federal and Social Security income taxes

          More than 78.8 percent of undocumented Mexican migrant workers paid Social Security and federal taxes through payroll deduction. Over the next 50 years, legal immigrants will add $407 billion to the Social Security system of the United States, according to a recent analysis by the American Immigration Laws Foundation (2003). Moreover, nearly 92 percent of undocumented Mexican migrant workers received their payments by check, while only 8.3 percent were paid with cash, implying that nearly 92 percent of undocumented Mexican workers pay taxes through payroll deduction (MMP 1994-2002).

Undocumented Mexicans do not take jobs away from Idahoans
or lower the wages in Idaho

          In order for Idaho’s new immigrants to lower the number of jobs and the hourly wages of natives, the number of jobs in Idaho must be a constant that is scarce and diminishes once “outsiders” enter the Idaho labor market. One way to find out whether this assumption is plausible is to look at the unemployment and employment rates, along with the wage level per job in Idaho over time.4
          According to the 1991-2005 Labor Force Data collected by the U.S. Department of Labor Statistics, the unemployment rate of native workers in Idaho has been declining since 1991. Not only is it at a historically low level in 2005, it is lower than the unemployment rate in the U.S. as a whole — Idaho's unemployment rate was 5.1 percent in March 2005, relative to 5.2 percent nationally. (See Figures 5 & 6).

Conclusion and policy implications

          Although the recent immigration rate appears to be unprecedented in Idaho and the U.S., it is still below the historical highs of 1860-1920, when foreign-born people, mostly Europeans, accounted for more than 13 percent of the population; currently, about 12 percent of the U.S. population is foreign-born.
          In a report released in February 2005, President George Bush asserted that “immigration has touched every facet of the U.S. economy and … America is a stronger and better nation for it.” A report also released in February 2005 by the Pew Hispanic Center emphasizes that for almost a century the U.S. heavily relied on an immigrant work force, especially Mexican migrant workers, to fill domestic labor shortages. (Passel et al. 2005). The evidence presented in this analysis suggests that any significant changes in U.S. immigration policy would have major effects on many Idaho employers and the statewide economy.
          However, existing American immigration policies are obsolete and fall short of recognizing the importance and contributions of Mexican migrant workers, both documented and undocumented. Any reform efforts should include two main precepts: 1) Keeping Americans safe from external security threats; and, 2) providing for the basic needs of migrant workers, such as health insurance and education. Balancing these concerns would improve the social standing of the immigrant labor force and recognize their important economic contributions to the Idaho economy.

Sources:

American Immigration Law Foundation. 2004. Five Immigration Myths Explained.

Aurbach, Laurence Jr. 1999. “Recent U.S. Immigration: Geography, Assimilation and Neighborhoods.”

Batalova, Jeanne & David Dixon. April 1, 2005, “Foreign-Born Self-Employed in the United States,” Migration Policy Institute.

Camarota, Steven. 2001. “Immigration From Mexico: Assessing the Impact on the United States,” Center for Immigration Studies.

Capps, Randy, and Jeffrey S. Passel. 2003. “The New Neighbors: A Users’ Guide to Data on Immigrants in U.S. Communities.” Baltimore, MD: The Urban Institute and the Annie E. Casey Foundation.

Capps, Randy, Leighton Ku, and Michael Fix. 2002. “How Are Immigrants Faring After Welfare Reform? Preliminary Evidence from Los Angeles and New York City.” Final report to U.S.

Department of Health and Human Services. Washington, D.C.: The Urban Institute.

Fisk, Donald M. 2003. American Labor in the 20th Century. U.S. Department of Labor, Bureau of Labor Statistics Compensation and Working Conditions Online.

Gibson, Campbell and Emily Lennon. 1999. “Historical Census Statistics on the Foreign-born Population of the United States: 1850-1990.” Population Division Working Paper no. 29. U.S. Census Bureau: Washington, D.C.

Griswold, Daniel T. 2002. “Mexican Workers Come Here to Work: Let Them!” Center for Trade Policy Studies at the Cato Institute in Washington.

Griswold, Daniel T. 2002. “Willing Workers: Fixing the Problem of Illegal Mexican Migration to the United States.” Center for Trade Policy Studies at the Cato Institute in Washington.

Immigration Laws. 1998. Number 8. Mexico: Mexican Migration Project.

Lieberson 1961; Ise and Perloff 1993; Kossoudji and Cobb-Clark 2002.

Massey, Douglas S. 1998. “March of Folly: U.S. Immigration Policy After NAFTA. “ The American Prospect 37: 22-33.

Massey, Douglas S. and Kristin Espinosa. 1997. “What's Driving Mexico-US Migration? A Theoretical, Empirical, and Policy Analysis,” American Journal of Sociology, vol. 102: 939-99.

Paral, Rob. 2005. “Essential Workers: Immigrants are a Needed Supplement to the Native-Born Labor Force.” Immigration Policy Brief. American Immigration Laws Foundations.

Passel, Jeffrey S. and Rebecca Clark. 1998. “Immigrants in New York: Their Legal Status, Incomes, and Taxes,” Research Report, Washington, D.C: The Urban Institute.

Passel, Jeffrey S. and Wendy Zimmermann. 2001. “Are Immigrants Leaving California? Settlement Patterns of Immigrants in the Late 1990s.” A Research Report of Urban Institute: Washington, D.C.

Passel, Jeffrey S., Randolph Capps, and Michael E. Fix. 2002. “The Dispersal of Immigrants in the 1990s.” Information Brief, no. 2 in series on Immigrant Families and Workers: Facts and Perspectives. Urban Institute: Washington, D.C.

Passel, Jeffrey S., Randolph Capps and Michael E. Fix. 2004. “Undocumented Immigrants: Facts and Figures.” Urban Institute Fact Sheet. Urban Institute: Washington, D.C.

Passel, Jeffrey S., Jennifer Van Hook and Frank D. Bean. 2004. “Estimates of Legal and Unauthorized Foreign Born Population for the United States and Selected States, Based on Census 2000.” Report to the Census Bureau. Urban Institute: Washington, D.C.

Passel, Jeffrey S., 2005. “Estimates of the Size and Characteristics of the Undocumented Population.” Report of the Pew Hispanic Center : Washington, D.C.

Philip Martin, 2003. “Labor and Unauthorized U.S. Migration.” Population Research Bureau.

Sum, Andrew, Neeta Fogg and Paul Harrington (2001). ""http://www.theamericanresistance.com/articles/art2001mar16.html" Feds Undercount Illegal Aliens," Northeastern University.

Tarmann, Allison. 2005. “Number of U.S. Undocumented Migrants Rises, but Policy Response Still Lacking.” Population Research Bureau Report.

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1 It should be noted that this analysis does not intend to evaluate any particular immigration policy proposals, such as deportation, patrol controls, legalization or temporary guest-worker programs. Instead, it intends to inspire further careful and well thought out discussions in the public sphere on these issues.

2 The sample size of the Mexican population in the ACS data for this analysis is 9,896, the sample size of the Mexican population in the CPS data is 2,986, and for the MMP data it is 3,896 (Massey 2005, also see the Mexican Migration Project website for the study design information).

Estimating the labor market behavior and outcomes for undocumented Mexican migrant workers can be a very challenging task for several reasons. First, because estimations for the foreign-born population are based on a sample of the population, estimates of undocumented residents are subject to sampling variability and sampling errors. Neither the Census Bureau nor any other U.S. government agency computes the undocumented population or defines its demographic characteristics based on specific counts. Census estimates for all foreign-born persons are grouped into two very broad categories: (1) persons who are foreign-born and naturalized citizens; and (2) documented persons who possess temporary legal status to work and live in the United States, students with expired visas, short-term visitors, and undocumented individuals, including those who possess false legal documents. In addition, the Census, CPS and ACS estimates use the “residual technique” to compute the number of undocumented foreign-born residents. In other words, the census-based documented population was estimated and then subtracted from the census-based foreign-born population, leaving an estimated category or a “residual” that was assumed to be the unauthorized population.

Moreover, previous studies speculate a larger number of undocumented residents residing in the country. For example, Sum et al. (2001) argue that there were 5.2 million more jobs created than U.S. workers reported attaining between 1994 and 2000, and that this difference mainly derives from undocumented immigrants who tried to stay away from government attention. This would suggest that the annual increase in illegal aliens is probably between 500,000 and 1 million — equivalent to the net number of legal immigrants annually. These latest estimates of the undocumented immigrant population have important long-term implications in the nation’s population growth. In 2000, the U.S. Census Bureau estimated that America's population would grow to 571 million in 2100, with the number of Hispanics growing to 190 million. But these figures may now have to be estimated again. Taken together, due to the data limitations, relatively small discrepancies in the estimates of foreign-born Mexicans in this analysis should be disregarded.

3 In 2004, the total population in Idaho is 1,393,262 and labor market participation rate in Idaho is approximately 66 percent (i.e., 919,553).

4 Although the overall unemployment rate in Idaho has been declining, the undocumented Mexican work force might have a slightly negative impact on the existing low wage for Idahoans who do not have much education. As mentioned earlier, the share of non-Hispanic whites having less than a high school education whose job opportunities might have been affected by unskilled undocumented Mexican workers is 9.6 percent. However, due to the fast growing enrollment in most local colleges and universities in recent years, and the diminishing traditional manual jobs partially derived from the technological advancement of most local companies and industries, the actual effect of an undocumented work force on the job opportunities of natives is perhaps two-fold lower than 9.6 percent. Also, most unemployed natives are eligible to receive unemployment benefits from the government while undocumented Mexicans are ineligible due to their illegal status.

The author thanks Dr. Bob Kustra, president of BSU, for providing a research grant to support this project and Dr. Richard Baker for raising the funds. The author bears the sole responsibility for the opinions and interpretations expressed in this study. Direct correspondence to: hhwu@boisestate.edu.