April 18, 2006

Study Finds Widening Wage Gap Between Immigrant and U.S.-Born Workers

For Immediate Release: April 18, 2006

Contact: Lynn Erskine, 202-293-5380 x115

Washington, DC: A new report by economists John Schmitt and Jonathan Wadsworth finds that the earnings gap between immigrant and U.S.-born workers increased substantially between 1980 and 2000.

"It's not the border that's broken but the U.S. labor market," said John Schmitt, economist at the Center for Economic and Policy Research. "There is a widening economic gap between immigrants and U.S.-born workers which reflects the broader deterioration in wage and working conditions for less-skilled and low-wage workers."

The report, "Changing Patterns in the Relative Economic Performance of Immigrants to Great Britain and the United States, 1980-2000," was written by John Schmitt, economist at the Center for Economic and Policy Research, and Jonathan Wadsworth, economist at the Centre for Economic Performance, London School of Economics.  Schmitt and Wadsworth analyzed data from the Decennial Censuses of 1980, 1990, and 2000 to assess changes in the pace of the economic assimilation of immigrants. Overall, they found that immigrant workers in the U.S. lagged farther behind U.S.-born workers in 2000 than they had in the previous two decades.  In 2000, male immigrants earned, on average, 18.4 percent less per hour than U.S.-born men. (The gap was only 9.3 percentage points in 1980.) Female immigrants earned, on average, 10.7 percent less per hour than U.S.-born women. (The gap was only 3.4 percent in 1980.) Even after controlling for age and education, the immigrant-earnings gap for men and women increased between 1980 and 2000.

The economists also examined the number of years it took the average immigrant to match the earnings of the average U.S.-born worker. They found that the length of time had increased substantially between 1980 and 2000. In 1980, male immigrants achieved rough earnings parity with U.S.-born male workers after 16-20 years. By 2000, it took male immigrants over 30 years. In 1980, immigrant women typically took 11-15 years before achieving earnings parity with U.S.-born female workers. By 2000, it took them 21-30 years.

Part of the deterioration in the economic situation of immigrants stems from the decline in the educational attainment of immigrants relative to U.S.-born workers over the period. Even after controlling for the drop in their education rates, however, immigrants generally fared worse in 2000 than they had 10 and 20 years earlier.

For the majority of workers in the United States, wage growth for the last 25 years has not kept pace with productivity.

To read the report, click here.

The Center for Economic and Policy Research is an independent, nonpartisan think tank that promotes democratic debate on the most important economic and social issues affecting people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.