[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                  NEW JOBS IN RECESSION AND RECOVERY: 
                 WHO ARE GETTING THEM AND WHO ARE NOT?

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                      BORDER SECURITY, AND CLAIMS

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 4, 2005

                               __________

                           Serial No. 109-39

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov


                                 ______

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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  ADAM SMITH, Washington
MIKE PENCE, Indiana                  CHRIS VAN HOLLEN, Maryland
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, Chief of Staff-General Counsel
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

        Subcommittee on Immigration, Border Security, and Claims

                 JOHN N. HOSTETTLER, Indiana, Chairman

STEVE KING, Iowa                     SHEILA JACKSON LEE, Texas
LOUIE GOHMERT, Texas                 HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   ZOE LOFGREN, California
ELTON GALLEGLY, California           LINDA T. SANCHEZ, California
BOB GOODLATTE, Virginia              MAXINE WATERS, California
DANIEL E. LUNGREN, California        MARTIN T. MEEHAN, Massachusetts
JEFF FLAKE, Arizona
BOB INGLIS, South Carolina
DARRELL ISSA, California

                     George Fishman, Chief Counsel

                          Art Arthur, Counsel

                 Luke Bellocchi, Full Committee Counsel

                  Cindy Blackston, Professional Staff

                   Nolan Rappaport, Minority Counsel


                            C O N T E N T S

                              ----------                              

                              MAY 4, 2005

                           OPENING STATEMENT

                                                                   Page
The Honorable John N. Hostettler, a Representative in Congress 
  from the State of Indiana, and Chairman, Subcommittee on 
  Immigration, Border Security, and Claims.......................     1
The Honorable Sheila Jackson Lee, a Representative in Congress 
  from the State of Texas, and Ranking Member, Subcommittee on 
  Immigration, Border Security, and Claims.......................     2
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................     5
The Honorable Louie Gohmert, a Representative in Congress from 
  the State of Texas.............................................     6
The Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California........................................     6

                               WITNESSES

Dr. Steven Camarota, Director of Research, Center for Immigration 
  Studies
  Oral Testimony.................................................     8
  Prepared Statement.............................................    10
Dr. Paul Harrington, Associate Director, Center for Labor Market 
  Studies, Northeastern University
  Oral Testimony.................................................    28
  Prepared Statement.............................................    30
Mr. Matthew J. Reindl, Stylecraft Interiors
  Oral Testimony.................................................    63
  Prepared Statement.............................................    65
Dr. Harry J. Holzer, Professor and Associate Dean of Public 
  Policy, Georgetown University
  Oral Testimony.................................................    75
  Prepared Statement.............................................    76

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Ranking 
  Member, Subcommittee on Immigration, Border Security, and 
  Claims.........................................................   113


 NEW JOBS IN RECESSION AND RECOVERY: WHO ARE GETTING THEM AND WHO ARE 
                                  NOT?

                              ----------                              


                         WEDNESDAY, MAY 4, 2005

                  House of Representatives,
                       Subcommittee on Immigration,
                       Border Security, and Claims,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:05 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable John 
Hostettler (Chair of the Subcommittee) presiding.
    Mr. Hostettler. Good morning.
    Whether accurate or not, our present economic recovery has 
been pegged a ``jobless recovery.'' There is a sense among many 
Americans that the job opportunities they and parents once 
enjoyed are no longer available to them and their children. For 
those on the lower rungs of the economic ladder, the very 
availability of the American dream seems to be in question. 
Today we will examine the impact immigration is having on these 
issues.
    Specifically, we will hear from the authors of two studies 
that have both concluded that all of the increase in employment 
in the United States over the last few years has been 
attributable to large increases in the number of employed 
immigrants, while the number of employed natives has actually 
declined.
    The first study was conducted by Steven Camarota of the 
Center for Immigration Studies. Mr. Camarota analyzed Census 
Bureau data and concluded that between March, 2000, and March, 
2004, the number of Native born adults with jobs decreased by 
482,000, while at the same time the number of foreign-born 
adults with jobs increased by 2,279,000. Thus, all of the 1.8 
million net increase of adults with jobs went to foreign-born 
workers.
    The second study, also relying on Census Bureau data, was 
conducted by Professors Andrew Sum and Paul Harrington and 
other researchers at the Center for Labor Market Studies at 
Northeastern University. They found that total civilian 
employment increased by 2,346,000 over the period from 2001 
through 2004 and that the number of foreign-born workers who 
arrived in the U.S. in this period and were employed in 2004 
was about 2.5 million. Thus, the number of employed Native born 
and older immigrant workers decreased by between 158,000 and 
228,000 over the four year period.
    The authors concluded that ``[for] the first time in the 
post-WWII era, new immigrants accounted for all the growth in 
employment over a four year period. At no time in the past 60 
years has the country ever failed to generate any new jobs for 
Native born workers over a four year period . . .
    Both these studies yield astounding results: Native born 
Americans have not seen any increase in employment in recent 
years. In fact, the number of jobs they hold has decreased. At 
the same time, the number of employed immigrants has risen 
substantially.
    What are the implications of these findings? I will let the 
authors of the studies relate their conclusions in detail, but 
let me quote them in summary. Mr. Camarota concludes that 
``[b]y significantly increasing the supply of unskilled workers 
during the recession, immigration may be making it more 
difficult for [similar American] workers to improve their 
situation.'' He also finds that ``[t]he fact that immigration 
has remained [consistently] high suggests that immigration 
levels do not simply reflect demand for labor in this country. 
Immigration is clearly not a self-regulating phenomenon that 
will rise and fall with the state of the economy.''
    Mr. Harrington's study concludes that ``[g]iven large job 
losses among the Nation's teens, 20-24 year olds with no four 
year degree, Black males, and poorly-educated Native born men, 
it is clear that Native born workers have been displaced in 
recent years.''
    Reading these two studies, I reached the troubling 
conclusion that our Nation's immigration policy has not 
operated in the best interest of American workers, at least 
over the last few years. It appears that the flow of 
immigrants, both legal and illegal, seems to pursue its own 
independent course, oblivious to whether we are experiencing 
good times or bad. For struggling American workers, current 
immigration levels can prove challenging during good times. In 
bad times, they can be devastating.
    Given this disconcerting picture of the prospects for work 
for many of our fellow citizens, I couldn't agree more with the 
conclusion reached by Professors Sum and Harrington when they 
admonish us that ``[n]ow is an opportune time for the U.S. 
Congress to reflect on the shortcomings of our existing 
immigration policies.''
    At this time, I turn to the Ranking Member of the 
Subcommittee, the gentlelady from Texas, Ms. Jackson Lee.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman.
    Two weeks ago, it was reported that African-Americans had 
the highest unemployment of any group in the United States, 
some 10 percent. We know that the economy is not percolating, 
not even simmering, it is probably frying. The question of 
economy and jobs, however, must be fairly and distinctly 
separated away from the idea of immigration equates to a bad 
economy.
    Frankly, Mr. Chairman, I believe that our economy is 
frying, not percolating, not spiraling upwards but spiraling 
downwards; and I make the argument that with real economic 
policies that confronted the question of job creation for all 
Americans, we would be a better country.
    We will be hearing testimony today about two articles on 
the effect that immigrants have had on American workers. One of 
them was written by Steven A. Camarota. It is entitled, ``A 
Jobless Recovery? Immigrant Gains and Native Losses.'' Among 
other things, this article observes that between March of 2000 
and March of 2004, the number of adult immigrants holding a job 
increased by more than 2 million, but the number of adult 
Natives holding a job was nearly half a million. The article 
concludes that immigration may have adversely affected the job 
prospects of Native born Americans.
    Particularly, I think what may be missing from this article 
is the clear analysis of what kind of jobs, where the jobs are 
located, and the interest and availability of Americans for 
those jobs.
    The other article reaches a very similar conclusion. It was 
written by the Center for Labor Market Studies. It is entitled, 
``New Foreign Immigrants in the Labor Markets in the U.S.: The 
Unprecedented Effects of New Immigration and Growth of the 
Nation's Labor Force in Its Employed Population, 2000 to 
2004.''
    It is important to understand that these articles are using 
a broad definition of the term ``immigrant.'' they include 
undocumented aliens, aliens who are lawful, permanent residents 
and naturalized citizens. In fact, the article written by the 
Center for Labor Market Studies goes even further. In that 
article a definition of an immigrant is an individual who is 
born outside of the 50 States and the District of Columbia. 
Persons born in the U.S. Virgin Islands, Puerto Rico and Guam 
are counted as being part of the immigrant population.
    Our witness today, Professor Harry J. Holzer, will explain 
why we should question the conclusion of these articles. Dr. 
Holzer thinks that immigration has modest negative effects on 
less-educated workers in the U.S., but it also has positive 
effects on the economy. He expects the positive effects to grow 
much stronger after baby boomers retire. Also, according to Dr. 
Holzer, the employment outcomes of Native born Americans mostly 
reflect the underlying weakness of the U.S. labor market, 
rather than large displacements of new immigrants.
    Particularly, Mr. Chairman, I would like to note the 
obvious, I am an African American, and in my lifetime I have 
experienced discrimination. Sadly to say, America still 
discriminates--in the board room, in leadership roles in 
corporate America, in education, in opportunities for 
undergraduate education, opportunities for graduate education, 
focusing African Americans on disciplines that will help and 
create opportunities for them, equally so of the minorities 
that have been discriminated or stigmatized, therefore 
lowering, sometimes, their opportunities to succeed.
    Isn't it interesting to talk about job loss for Americans, 
and we can find a number of groups--Hispanic Americans, African 
Americans, Muslim Americans--who still face discrimination in 
America. Maybe if we fix those discriminatory practices, we 
would find a fuller job market for all to participate in.
    I agree with Dr. Holzer that immigrants have a positive 
effect on the economy. Likewise, I would say I want to increase 
the job market for the constituents that I represent in the 
18th Congressional District, many inner-city youth, many 
African Americans, many poor Anglos, poor Hispanics looking for 
work that does not exist.
    In fact, I recently participated in a conference at the 
Offshore Technology Conference; and one of the issues was 
creating jobs, creating a workforce for the energy industry in 
the 21st century. They are lacking in job applicants between 
the ages of 25 and 35. One of the reasons is because our 
educational system has failed to educate those who would be 
qualified to take these jobs.
    Immigrants create new jobs by establishing new businesses, 
spending their incomes on American goods and services, paying 
taxes, and raising the productivity of United States 
businesses. What I would hope is that, as we listen to these 
particular panelists, that we will find not accusations but 
solutions.
    For example, I raise the question of asking Americans at 
this stage of their lives to be bilingual on jobs that they 
have previously not had the training, that provides a great 
deal of consternation and divisiveness in our community. We 
should be able to assume a job whether we are bilingual or not, 
and that means that those who are able to perform the job 
should be able to do the job and to be able to be hired for the 
job. However, to castigate immigrants as a cause for a bad 
economy I believe is the wrong direction to go.
    I hope this same hearing is being held in Financial 
Services, Ways and Means, and Energy and Commerce, as well as 
Education and Labor so that we can focus our attention on the 
real key issue, creating new, exciting, dynamic jobs for 
Americans and those who live within our boundaries and, as 
well, fixing the economy.
    The American economy does not have a fixed number of jobs. 
Economists describe the notion that the number of jobs is fixed 
as the ``lump of labor'' fraught policy.
    Job opportunities expand with the rising population. Since 
immigrants are both workers and consumers, their spending on 
food, clothing, housing and other items creates new job 
opportunities. Immigrants tend to fill jobs that Americans 
cannot or will not take in sufficient numbers to meet demand, 
mostly the high and low ends of the skill spectrum. Occupations 
with the large growth in absolute numbers tend to be the ones 
that only require short-term, on-the-job training. This 
includes such occupations as waiters and waitresses, retail 
salespersons, cashiers, nursing aides, orderlies and 
attendants, janitors, home health aides, manual laborers, 
landscaping workers and manual packers. The supply of American 
workers suitable for such work is falling on account of an 
aging workforce and rising education levels.
    Now I do not suggest that no American will take the jobs of 
being a waiter, a retail salesperson, a cashier, a nursing 
aide, a janitor, home health aide. I would not be so arrogant 
to suggest that. But by creating a bustling economy, all those 
jobs will expand. They are basically service jobs. Where is the 
manufacturing arm of the United States? Where is the 
intellectual job creation of the United States? Where is the 
high-tech market of the United States? This is what a nation 
that is capitalistic and democratic accepts as a good quality 
of life.
    Immigrants came in the early 1900's. They did work. They 
moved up the ladder. They are now the corporate barons of 
America. That is what is happening to America now. Immigrants 
of color come to the United States, matched with African 
Americans who first came here as slaves, and all of a sudden 
they are all circling around the same pool of lack of 
opportunity. America should wake up, create opportunity, 
eliminate discrimination, expand its market, invest in its 
economy, create new jobs. That is the answer, not pointing out 
or isolating immigrants.
    Finally, Mr. Chairman, some people are concerned that 
undocumented workers lower wages for American workers. This is 
a legitimate but probably exaggerated concern. It is not the 
mere presence of undocumented workers that has led to low 
wages. The problem is the lack of bargaining power that these 
workers have against their employers. No worker chooses to be 
paid low wages or to work under poor conditions, nor do we 
force employers to give low wages. I would argue that if you 
have earned access to legalization, allow immigrants to access 
legalization, create a good job market, we will create a 
workplace for all to work in.
    The way suppression is attributable to the ability of 
employers to exploit its foreign workforce, underpaying foreign 
workers is only one of the methods used by employers to cut 
labor costs. Temporary and part-time workers are employed 
without worker benefits, and the labor laws are violated 
routinely, and these happen to be Americans. The solution to 
this and many other immigration-related problems in our country 
is comprehensive immigration reform.
    Mr. Chairman, I am delighted to note that our Full 
Committee Ranking Member is present, and I would like to be 
able to ask unanimous consent to yield to him at this time.
    Mr. Hostettler. The lady's time has expired, but I will 
recognize the gentleman from Michigan, the Ranking Member from 
the full Committee, for an opening statement.
    Mr. Conyers. I want to associate myself with the remarks of 
our Ranking Member, Sheila Jackson Lee.
    What I am interested in is the importance of us not 
confusing the problem of illegal immigrants with all 
immigrants, and somehow I am getting the feeling that this is 
all being put together in one big cauldron and that we are 
going from there.
    The second point that I would like to make is that if there 
are any reservations about the contributions of naturalized 
citizens, I will be listening carefully to discuss this with 
our witnesses and with my distinguished colleagues on the 
Committee. Because our governor from Michigan, Jennifer 
Granholm, is a naturalized citizen, coming from Canada at 
probably the age of two. I also throw in the names of Dr. 
Kissinger and Governor Schwarzenegger as others. The point is 
that naturalized citizens should certainly be separated from 
the issues surrounding the undocumented immigrants, those who 
are here living outside of the immigration requirements.
    Now my concern about elevating naturalized citizens is so 
strong that I have introduced for the second term a proposal 
that naturalized citizens, after 20 years in this country, 
would be able to do the only thing that they can't do right now 
and that is run for President of the United States. It seems to 
me the reason that this was done several hundred years ago is 
pretty clear, but whether that is a concern at this time, I 
don't think so.
    Now it is true that many employers take advantage of 
undocumented workers and that creates some friction in the job 
market area. We are having traditional exploitation of foreign 
workers who we bring in here. I have heard, for example, in the 
agricultural industry it has been stated that we couldn't do 
much farming if we didn't bring in people to pick the fruit and 
do all of the stoop labor that is involved in that area. So I 
think that there are some huge issues that should be studied as 
well, as referenced by the gentlelady from Texas, by other 
Committees for their complete impact.
    Now we are going through a period of employment stagnation. 
Under this Administration, we have never had so many people 
recently out of work; and the figure 5.2 percent unemployment 
is very disingenuous because a lot of people stop looking for 
work after they can't find it. And Michigan is very aware of 
that because we are hit by an even larger unemployment 
consideration.
    Two more examples. We have an incredible outsourcing 
problem. We are paying corporations to leave this country, and 
they get tax credits for it. And then we have two foreign trade 
policies--that I hope the witnesses will feel free to touch 
on--three really, NAFTA, CAFTA, and China's Most Favored Nation 
policy, in which our textile industry is on the rocks right 
now.
    So I look forward to these hearings, and I thank the 
Chairman for allowing me to present a few thoughts before the 
witnesses begin. Thank you, sir.
    Mr. Hostettler. I thank the gentleman.
    The Chair now recognizes the gentleman from Texas, Mr. 
Gohmert, for purposes of an opening statement.
    Mr. Gohmert. Thank you, Mr. Chairman.
    Very briefly. I appreciate the witnesses being here. I am 
looking forward to your testimony.
    My perspective comes from having a great-grandfather that 
immigrated to this country in the late 1800's, and before the 
turn of the century. When he came, he didn't speak English and 
had less than $20. Within 25 years, before the turn of the 
century, he built the nicest home in Cuero, Texas, and did 
extremely well for himself.
    I think America is still the land of opportunity. We need 
immigration, it needs to be legal, and we don't need to hurt 
the country.
    I am very encouraged by some of what I see from the 
Hispanic immigration in that they--most come with very strong 
family values and moral values, and I think they are good for 
the country. What we need to know about is, from you 
gentlemen's perspective, is the effect of immigration and how 
it can be made better. We do know that 19 people can knock down 
the biggest buildings we have, so I am strong on knowing 
exactly who is coming in. That is my perspective, and I am 
looking forward to hearing yours.
    Thank you.
    Mr. Hostettler. Does anyone else wish to make an opening 
statement?
    The Chair recognizes the gentlelady from California, Ms. 
Sanchez.
    Ms. Sanchez. Thank you, Mr. Chairman and Ranking Member 
Jackson Lee, for convening another Subcommittee hearing to hear 
an important issue that is related to immigration.
    Today we are looking at the issue of how immigrants impact 
American workers and Americans looking for jobs; and this 
hearing is an intersection of two issues that I care very much 
about, immigration and labor. I honestly believe that 
hardworking, law-abiding people who emigrate to this country 
should have every opportunity to work so that they can provide 
for their families and, if they choose to, make America their 
new home. I also feel that undocumented immigrants that have 
been in this country for years, contributing to American 
businesses and our economy, should have a chance to earn legal 
status and a stake in this country so that they can continue to 
contribute to the United States on a permanent basis. We should 
never forget--at all costs, we should never forget that 
immigrant labor is what helped build this country and what 
continues to help this country's economy.
    Obviously, American workers helped to build and sustain 
this country as well. You will not find a stronger advocate for 
American workers than myself. I am a proud member of IBEW Local 
441, and I am a founding Chair and a current co-Chair of the 
Congressional Labor and Working Families Caucus.
    I fully support American workers and want to make sure that 
their jobs and their families are protected, and I am confident 
that if we think real hard and we think thoughtfully about 
these issues we can create policies that make sure that 
American jobs are secure and also that law-abiding immigrants 
work toward earned legalization in this country.
    As this Subcommittee and this Congress work on immigration 
reform this year, we have to take the rights and the needs of 
both immigrant workers and American workers into consideration. 
We have to balance those interests.
    I am looking forward to hearing from the witnesses today, 
and I want to thank them for taking their time to testify and 
to answer questions from the Subcommittee. I hope that they 
will help us formulate realistic and workable policies that 
benefit--that take into account the benefits of immigration and 
also protect American workers.
    With that, I will yield back to the Chair.
    Mr. Hostettler. I thank the gentlelady.
    The Chair will now introduce the members of our panel.
    Steven Camarota is Director of Research at the Center for 
Immigration Studies here in Washington. He has testified 
numerous times before Congress and has published many articles 
on the impact of immigration in such journals and papers as 
Social Science Quarterly, The Washington Post, the Chicago 
Tribune and National Review. Dr. Camarota writes regularly for 
the Center for Immigration Studies on a broad range of 
immigration issues, including his recent reports on labor, 
Social Security, immigration trends, and border and national 
security. He holds a Ph.D. from the University of Virginia in 
public policy analysis and a Masters Degree in political 
science from the University of Pennsylvania.
    Paul Harrington is Associate Director of the Center for 
Labor Market Studies, or CLMS, and professor of economics and 
education at Northeastern University in Boston. At the CLMS, 
Dr. Harrington conducts labor market research at the national, 
State and local level on a broad range of issues, including 
immigration, higher education performance, workforce 
development, and youth and families.
    Dr. Harrington and CLMS were the first to estimate the 
sharp increase in the number of undocumented immigrants during 
the 1990's. Paul Harrington earned his Doctor of Education 
degree at the University of Massachusetts, Boston; and he also 
holds Master's and Bachelor's degrees from Northeastern 
University.
    Matthew Reindl is the proprietor of Stylecraft Interiors, 
an architectural woodworking factory in New York. His family 
has owned this factory for over 50 years. His grandfather 
founded the company in 1951, after immigrating to America in 
1930. Mr. Reindl is the third generation of his family to run 
the business.
    Over the past several decades, Stylecraft Interiors has 
employed American citizens and legal immigrants from around the 
globe, including countries in Europe, the Caribbean and Central 
America. In addition to his work at the company, Mr. Reindl is 
the graduate of the New York Institute of Technology in 
electromechanical computer technology.
    Dr. Harry Holzer is Professor and Associate Dean of Public 
Policy at Georgetown University and a Visiting Fellow at the 
Urban Institute in Washington, D.C. His research has primarily 
focused on the labor market problems of low-wage workers and 
other disadvantaged groups, and he has published multiple books 
on his findings.
    Formerly, he was the Chief Economist for the U.S. 
Department of Labor, and a professor of economics at Michigan 
State University. Dr. Holzer received both his Bachelor of Arts 
and Doctorate in Economics from Harvard University.
    We thank the witnesses for being here. You will notice that 
there is a series of lights. Without objection, your full 
written statements will be made a part of the record, and if 
you could stay as close to the 5-minute time limit, we would 
appreciate it.
    Mr. Hostettler. The Chair now recognizes Mr. Camarota for 5 
minutes.

TESTIMONY OF STEVEN CAMAROTA, DIRECTOR OF RESEARCH, CENTER FOR 
                      IMMIGRATION STUDIES

    Mr. Camarota. Mr. Chairman and Members of the Subcommittee, 
thank you for inviting me to testify on the impact of 
immigration on the U.S. labor market during the recent economic 
slowdown. My name is Steven Camarota, and I am Director of 
Research at the Center for Immigration Studies, a nonpartisan 
think tank here in Washington.
    Now, prior to the slowdown that began in 2000, my own 
research and general set of assumptions had been that the 
primary effect of immigration would have been to reduce wages 
and perhaps benefits for Native born Americans primarily 
because it is increasing the supply of labor but not 
necessarily affecting unemployment or overall employment.
    An important study--just to give you one example--published 
in 2003 in the Quarterly Journal of Economics found that 
overall immigration reduced the wages of American workers by 
about 4 percent and those with less than a high school 
education by about 7 percent; and the effect exists regardless 
of legal status. You are just adding more workers and exerting 
downward pressure on wages.
    However, a more careful analysis of recent data has made me 
rethink that the only effect is on wages and possibly benefits. 
In a study that we published at the end of last year, we found 
that between March of 2000 and March of 2004 the number of 
adult natives who were unemployed increased by 2.3 million, but 
at the same time the number of employed immigrants increased by 
2.3 million--by adults, I mean--18 years in age and over. About 
half of the growth in immigrant workers since 1970 was from 
illegal aliens. We have added about 1.2 million new adult 
illegal alien workers in the United States in the last 4 years.
    Overall, the level of new immigration, legal and illegal, 
does not seem to have slowed very much since 2000. By remaining 
so high when the economy was not creating many new jobs, 
immigration almost certainly has reduced job opportunities for 
some natives and immigrants already here.
    Now of course it would be a mistake to assume that every 
job taken by an immigrant is a job lost by a native, but the 
statistics are striking, and they should give serious pause to 
those who want to legalize illegal aliens instead of enforcing 
the law and reducing the supply of labor. Not only did native 
unemployment increase by 2.3 million, but perhaps most 
troubling of all we found that the number of natives between 
the ages of 18 and 64 not in the workforce increased by 4 
million over this time. And detailed analysis shows that this 
increase in non-work among Americans was not due to some rise 
in early retirement or increased college enrollment or even new 
moms staying home to spend time with their new babies.
    Now our analysis also shows little evidence that immigrants 
only take jobs Americans don't want. For one thing, immigrant 
job gains have been throughout the labor market, with more than 
two-thirds of their employment gains in jobs that require at 
least a high school education. However, it is true that 
immigration has its biggest impact at the bottom end of the 
labor market in jobs done by less-educated workers. In job 
categories such as construction labor, building maintenance, 
and food preparation, immigration added 1.1 million adult 
workers in the last 4 years, but there was nearly 2 million 
unemployed adult natives in those very same occupations in 
2004.
    Those arguing for high levels of immigration on the grounds 
that it helps alleviate pressure of a tight labor market are 
ignoring the very high unemployment rate among Americans in 
those very same occupations, averaging about 10 percent in 
2004.
    Not only is native unemployment highest in occupations 
which saw the largest growth in immigrants, the available 
evidence also shows that the employment picture for natives 
generally looks worse in those parts of the country that saw 
the largest increase in immigrants. It is exactly the kind of 
pattern you would expect if immigrants are displacing natives. 
For example, in States where immigrants increase their share of 
the workforce by 5 percentage points, the number of natives 
working actually fell by 3 percent on average. But in States 
where the share of immigrant workers increased by less than 1 
percent, the number of natives holding a job actually went up 
by about 1.4 percent.
    Now, of course, businesses will continue to say 
``[i]mmigrants only take jobs Americans don't want.'' But what 
they really mean is that, given what those businesses would 
like to pay and how they would like to treat their workers, 
they cannot find enough Americans. Therefore, employers want 
the United States to continually increase the supply of labor 
by non-enforcement of immigration laws.
    In conclusion, I would argue forcefully that probably one 
of the best things we can do for less-educated natives and 
legal immigrants already here is to strictly enforce our 
immigration laws and reduce the number of illegal aliens in the 
country. We should also consider reducing unskilled legal 
immigration as well. This would greatly enhance worker 
bargaining power vis-a-vis their employers and allow their 
wages, benefits and working conditions and employment 
opportunities to improve.
    Thank you.
    Mr. Hostettler. Thank you, Dr. Camarota.
    [The prepared statement of Dr. Camarota follows:]

                Prepared Statement of Steven A. Camarota

    Mr. Chairman and members of the subcommittee: Thank you for 
inviting me to testify on the impact of immigration on the labor market 
during the recent economic slow down. My name is Steven Camarota, and I 
am Director of Research at the Center for Immigration Studies, a non-
partisan think tank here in Washington.
    Prior to the economic slowdown that began in 2000, I had generally 
assumed that the primary impact of immigration would have been to 
reduce wages and perhaps benefits for native-born workers but not 
overall employment. An important study published in 2003 in the 
Quarterly Journal of Economics showed that immigration reduces wages by 
4 percent for all workers and 7 percent for those without a high school 
education. \1\ A significant effect to be sure.
---------------------------------------------------------------------------
    \1\ ``The Labor Demand Curve Is Downward Sloping: Reexamining the 
Impact of Immigration on the Labor Market,'' by George J. Borjas. 
November 2003. The Quarterly Journal of Economics.
---------------------------------------------------------------------------
    However, after a careful examination of recent employment data, I 
have become increasingly concerned that immigration may also be 
reducing employment as well as wages for American workers. A study by 
the Center for immigration Studies published last year shows that 
between March 2000 and March 2004 the number of unemployed adult 
natives increased by 2.3 million, but at the same time the number of 
employed immigrants increased by 2.3 million. \2\ By adults I mean 
persons 18 and older. About half the growth in immigrant employment was 
from illegal immigration. And overall the level of new immigration, 
legal and illegal, does not seem to have slowed appreciably since 2000. 
By remaining so high at a time when the economy was not creating as 
many new jobs, immigration almost certainly has reduced job 
opportunities for natives and immigrants already here.
---------------------------------------------------------------------------
    \2\ The report ``A Jobless Recovery: Immigrant Gains and Native 
Losses'' can be found at the Center's web site www.cis.org/articles/
2004/back1104.html
---------------------------------------------------------------------------
    Of course, it would be a mistake to assume that every job taken by 
an immigrant is a job lost by a native, but the statistics are 
striking. And they should give serious pause to those who want to 
legalize illegal aliens instead of enforcing the law and reducing the 
supply of workers. Not only did native unemployment increase by 2.3 
million, but we also found that the number of working-age natives who 
said they are not even looking for work increased by 4 million. 
Detailed analysis shows that the increase was not due to early 
retirement, increased college enrollment, or new moms staying home with 
their babies.
    Our analysis also shows little evidence that immigrants only take 
jobs Americans don't want. For one thing, immigrant job gains have been 
throughout the labor market, with more than two-thirds of their 
employment gains in jobs that require at least a high school degree. 
However, it is true that immigration has its biggest impact at the 
bottom end of the labor market in relatively low paying jobs typically 
occupied by less-educated workers. But such jobs still employ millions 
of native-born workers.
    In job categories such as construction labor, building maintenance, 
and food preparation, immigration added 1.1 million adult workers in 
the last 4 years, but there were nearly 2 million unemployed adult 
natives in these very same occupations in 2004. About two-thirds of the 
new immigrant workers in these occupations are illegal aliens. Those 
arguing for high levels of immigration on the grounds that it helps to 
alleviate the pressure of tight labor markets in low- wage, less-
skilled jobs are ignoring the very high rate of native unemployment in 
these job categorizes, averaging 10 percent in 2004.
    Not only is native unemployment highest in occupations which saw 
the largest immigrant influx, the available evidence also shows that 
the employment picture for natives looks worst in those parts of the 
country that saw the largest increase in immigrants. For example, in 
states were immigrants increased their share of workers by 5 percentage 
points or more, the number of native workers actually fell by about 3 
percent on average. But in states where the immigrant share of workers 
increased by less than one percentage point, the number of natives 
holding a job actually went up by 1.4 percent. This is exactly the kind 
of pattern we would expect to see if immigration was adversely 
impacting native employment.
    Of course, businesses will continue to say that, ``immigrants only 
take jobs Americans don't want.'' But what they really mean is that 
given what they would like to pay, and how they would like to treat 
their workers, they cannot find enough Americans. Therefore, employers 
want the government to continually increase the supply of labor by non-
enforcement of immigration laws.
    I would argue forcefully that one of the best things we can do for 
less-educated natives, and legal immigrants already here is strictly 
enforce our immigration laws and reduce the number of illegal aliens in 
the country. We should also consider reducing unskilled legal 
immigration.
    This would greatly enhance worker bargaining power vis-a-vis their 
employers and would result in lower unemployment rates and increased 
wages and better working conditions for American workers, immigrant and 
native alike.

                               ATTACHMENT




    Mr. Hostettler. Dr. Harrington.

 TESTIMONY OF PAUL HARRINGTON, ASSOCIATE DIRECTOR, CENTER FOR 
         LABOR MARKET STUDIES, NORTHEASTERN UNIVERSITY

    Mr. Harrington. Thank you.
    I will begin by talking about the contributions of civilian 
employment--of foreign immigration to civilian employment 
growth in the U.S. over the past 3 decades to give some 
historical context to this.
    During the decade of the 1970's, the proportion of foreign-
born immigrants that became employed in the United States was 
about 12 percent. About 12 percent of the overall employment 
rise was among foreign-born new immigrants. Between 1980 and 
1990, new immigrants accounted for about a quarter of the total 
rise of employment growth in the country. 1990 to 2000, that 
share actually rose to 44 percent during this period of time. 
Particularly it is important to understand during the 1990's it 
was a period of very strong economic growth, with sharp 
declines in overall unemployment rates in the Nation.
    Between 2000 and 2004, though, all of the employment change 
that we had in the United States, all the job growth that we 
had in the United States was concentrated among foreign-born 
individuals. Minimally 110 percent of the net rise of 
employment in the U.S. was among foreign born. So the impact of 
new immigration on the growth of the employed population of the 
Nation in the last 4 years has been historically unprecedented.
    The annual average number of employed new immigrants over 
the 1990's increased by about 600,000 a year. Between 2000 and 
2004, that growth averaged between 600,000 and 750,000 new 
immigrants per year, exceeding the annual inflows that we had 
during the 1990 boom years. This large influx of new employed 
immigrants occurred despite the recession of 2001, the 
terrorist events of 9/11, and the jobless recovery of 2001 to 
2003. So there seems to be little connection between this flow 
of newly employed immigrants and overall levels of economic 
activity in the American economy.
    All the net increase in the number of employed civilian 
workers between 2002 and 2004 took place among new immigrants, 
while the number of Native born and established immigrant 
workers declined somewhere between 150 and 250,000, we 
estimate.
    During the same four year period of time, the relative size 
of job losses among teens and young adults with no 
postsecondary schooling, black males and blue collar workers 
were quite substantial. These job losses were above 
expectations based on overall job performance in the Nation. 
Those Native born who were most in direct competition with new 
immigrants lost jobs at the highest rates.
    Who were these immigrants? An above-average fraction were 
males, about two-thirds were males. A high share were under the 
age of 30. Half of all new employed immigrants were under the 
age of 30 and a very high share were under the age of 35. 
Seventy percent of all the new employed immigrants were age 35 
or under. A very large proportion lacked a high school diploma. 
In fact, 35 percent of newly employed immigrants between 2000 
and 2004 had no high school diploma at all, although an 
additional 27 percent had a college degree. So it was a bit of 
a bimodal distribution in the educational characteristics of 
that population.
    About 60 percent were from Mexico, Central America, South 
America; another one-fifth came from Asia, fewer than 10 
percent were from Europe or Canada; and about one-half of these 
individuals appear to be undocumented immigrants.
    While these immigrants were employed in every industry and 
occupational group, they were overrepresented in agriculture, 
construction, food processing, leisure and hospitality 
industries, and low-level service industries including personal 
care, entertainment and janitorial services. Many were employed 
in industries where unemployment and job vacancy ratios were 
quite high.
    The ratio of unemployed workers to job vacancies in the 
construction industry in 2004 ran eight to nine to one. In 
other words, there were close to nine workers for every one job 
vacancy in the construction industry. In the manufacturing 
sector, there were about five experienced unemployed workers 
for every one job vacancy in that industry. In the leisure and 
hospitality industry, that ratio ran at three to one. Many 
others worked in industries where the absence of real wage 
growth indicates no labor shortage at all. The vast majority of 
jobs obtained by new immigrants were in industries and 
occupations where there were no demonstrated labor shortages at 
all.
    Teenagers in 2004 had the lowest employment population 
ratio. In other words, the fraction employed in the U.S. 
economy was the lowest it has ever been since we began 
measuring it in 1948. Between 2000 and 2004, the employment 
rate of teenagers fell from about 46 percent--about 46 out of 
100 teens had a job on average in 2000--fell down to about 36 
to 37 percent by about 2004. It was the largest absolute rise 
of any group in the American economy.
    The 16 to 24 population had the second largest reduction in 
the size of their employment rates over that period of time. 
Other groups that expanded relatively large job losses were 
black males, blue collar workers and manufacturing construction 
industries, and the latter of that group were--much of the 
employment in that group was characterized by off-the-books 
sort of work activities.
    Overall--and I will end on this--in this labor environment 
characterized by little new job growth, labor surplusses in 
most industries and occupations, high levels of immigration, 
particularly among young, unskilled and low-educated workers 
leads to job displacement among Native born. There is little 
empirical evidence to support the notion that new immigrants 
are taking large numbers of jobs that Americans do not want to 
do.
    Thank you.
    Mr. Hostettler. Thank you, Dr. Harrington.
    [The prepared statement of Dr. Harrington follows:]

                 Prepared Statement of Paul Harrington




    Mr. Hostettler. Mr. Reindl.

      TESTIMONY OF MATTHEW J. REINDL, STYLECRAFT INTERIORS

    Mr. Reindl. Chairman Hostettler and Members of the 
Committee, thank you for the privilege to testify at today's 
hearing.
    I operate a small family-owned woodworking factory 
established by my grandfather in 1951, an immigrant to this 
country in 1930, when one person's salary was enough to support 
a family, buy a house, start a business and achieve the 
American dream. My grandfather was a man that always obeyed the 
law and taught his family to respect the rules and laws of the 
country. He took great pride in becoming an American citizen.
    Unfortunately, I see the American dream collapsing before 
my eyes. The American working class is being squeezed from all 
ends. Our cost of living is going up drastically, while at the 
same time salaries are being suppressed. Today, many married 
couples find it difficult to live on one salary. High-paying 
computer and technical jobs are being outsourced to foreign 
countries. Many of our manufacturing jobs are leaving the 
country to foreign countries, where the salaries range from 20 
cents to $3.50 an hour. This huge wage imbalance is one factor 
that will keep American job and wages suppressed and is a 
little difficult for the Government to control.
    Another factor that is making it more difficult for both 
legal immigrants and Native born Americans to live the American 
dream is the massive influx of millions of illegal aliens into 
our country. This is something our Government can control. In 
fact, it is the constitutional responsibility of the United 
States Government to patrol our borders and stop invasions.
    I am here speaking for the numbers--for the shrinking 
numbers of middle-class Americans whose wages are being 
depressed due to an onslaught of illegal aliens and the 
unwillingness of our Government to enforce existing laws.
    As my competitors break the law and hire illegal aliens, my 
product price cannot be raised. My health care, material, 
insurance and tax costs have all gone up. In order to stay in 
business, I cannot give my legal employees the raises they 
deserve.
    Mr. Chairman and Members of the Committee, Federal law 
prohibits anyone from hiring, aiding or abetting illegal 
aliens, yet Federal agencies, local governments, private and 
church organizations are setting up so-called hiring sites so 
that legal and illegal immigrants can work off the books and 
disregard Federal and State laws.
    In Freeport, Long Island, a hiring site was set up with a 
grant that was given to the village from the Department of 
Housing and Urban Development. This is a flier circulating 
throughout the village by its organizers. Note it says, day 
labor site authorized by the village. Day laborer--meaning some 
legal immigrants but too many undocumented workers, also known 
as illegal aliens--why are my tax dollars supporting this? Why 
is my Government supporting illegal activity? Why do I have to 
compete against employers blatantly breaking immigration, tax, 
Social Security and insurance laws?
    In a 2002 Barron's article, a contractor who does 
multimillion dollar construction jobs blatantly brags about 
hiring day laborers and not paying workers compensation because 
he says it is very expensive.
    What frustrates me the most is that everywhere I look the 
Government law enforcement agencies refuse to enforce any laws 
pertaining to illegal aliens. We have millions of aliens 
illegally employed in our country, and the Government only 
fined 13 employers in 2002, 1 year after 9/11. I guess INS or 
ICE does not read Barron's. I think everyone will agree it is a 
pathetic record.
    To my knowledge, not one employer in the last few years has 
been jailed for hiring an illegal alien. This whole problem can 
be fixed immediately with no new laws, no new legislation, just 
enforce existing laws. All the laws and fines are on the books, 
and they all exist. What does not exist is our Government's 
will to enforce our laws.
    Without employment or the hope of employment, illegal 
aliens will not be tempted to enter our country in violation of 
our immigration laws. Employers need to be prosecuted for 
hiring illegal workers, and legal immigrant workers need to 
believe that all employers respect our laws.
    The Federal Government can't allow a criminal minority of 
employers to profit from illegal labor practices because it 
undermines the founding principles of our Nation.
    That concludes my testimony, and I look forward to any 
questions. Thank you.
    Mr. Hostettler. Thank you, Mr. Reindl.
    [The prepared statement of Mr. Reindl follows:]

               Prepared Statement of Matthew James Reindl




    Mr. Hostettler. Dr. Holzer.

 TESTIMONY OF HARRY J. HOLZER, PROFESSOR AND ASSOCIATE DEAN OF 
              PUBLIC POLICY, GEORGETOWN UNIVERSITY

    Mr. Holzer. Thank you, Mr. Chairman.
    It is my view that the employment difficulties of Native 
born Americans in the last 4 years mostly reflect underlying 
weaknesses of the U.S. labor market in that time, rather than 
large displacements by new immigrants, and I would like to make 
five points to that effect.
    My first point is, very simply, net immigration has really 
remained very constant in the period between the 1990's and the 
post 2000 period. Instead, what has changed is the rate at 
which we create new jobs in the United States.
    If you go back to the 1990's, especially the late 1990's, 
we were creating three million new payroll jobs on average per 
year. In the more recent period, starting in early 2003 through 
2004, I think it is accurate to describe the American economy 
as having had a short recession and a jobless recovery for 3 
years. In that period, from March, 2001, to 2004, the total 
number of nonforeign payroll jobs in the U.S. declined by 1.7 
million, and that cannot be attributable to the arrival of 
immigrants. At the same time, the U.S. population was growing 
by 8 million, mostly reflecting Native born Americans. So what 
really changed in this time period is the rate of job creation, 
not the rate of immigration, which is very constant.
    My second point is that, contrary to some of the other 
interpretations you have heard this morning, immigration cannot 
account for many other employment-related difficulties in the 
labor market. If you look beneath the aggregate level of 
numbers, you see all kinds of patterns and shifts across 
sectors that really are quite totally unrelated to immigration.
    Consider what is happening in the manufacturing sector. We 
have lost roughly 3 million jobs between March of 2000 and 
March of 2004. Now, it is true that new immigrant employment 
rose in the manufacturing sector by about 300,000, but that 
means new immigrants only account for roughly one-tenth of the 
total job loss in manufacturing. Therefore, the vast majority 
of it reflects other factors.
    We saw job increases in other places like the public 
sector, almost a million new jobs created in the public sector, 
virtually none of those going to immigrants. If you look across 
many other sectors in the economy, increases in employment in 
health care, decreases in employment in retail trade, those 
patterns are almost completely unrelated to the flow of new 
immigrants in the economy. And that reflects a broader point 
that every year, in fact, every quarter, many, many millions of 
jobs are created and destroyed in the American economy. That is 
how our economy and our labor market works. The flow of about a 
half a million new immigrants into the labor force every year 
is a very small part of that overall churning in the labor 
market.
    Similarly, the earnings growth of over 100 million 
nonsupervisory workers in the United States--which have not 
risen at all in the last 2 years--cannot possibly be driven by 
the 2 million immigrants that have newly arrived in the labor 
force during that time period.
    My third point is that it is important to keep our eye on 
the ball over the longer term. Most economists expect this 
labor market to recover. We can't say exactly when. The 
dominant fact of the labor market over the next 20 years will 
be the retirement of the baby boomers in very large numbers; 
and during that time period, when that begins to happen, 
projections show that immigrants will account for all of the 
growth in the labor force. So it is very important for that 
growth in the labor force to occur during that period.
    We need workers to pay the taxes, to pay for the health and 
retirement benefits that the rest of us are expecting, 
especially in certain key sectors of the labor market, science 
and engineering, health care. We will need immigrant workers to 
help fill the jobs that contribute importantly to the services 
and the growth of the economy that we want to see here.
    Fourthly, most studies show that over the long run 
immigrants have a modest negative effect on the employment 
earnings of less-educated workers, and they generate other 
important benefits for the economy.
    Mr. Camarota has already cited one study showing a 3 to 4 
percent decline in wages for less-educated workers. That study 
is at the high end of the numbers generated by economists on 
earnings losses. Some other studies equally credible find much 
smaller negative effects. But virtually all economists believe 
that immigrants also provide important benefits for the 
economy. They are consumers as well as producers. They do 
contribute important labor in areas where sometimes shortages 
occur, certainly in terms of health care, engineering, et 
cetera. They help reduce costs in housing, food and elsewhere 
that are important for these workers.
    My last point simply is, what does this all mean for 
policy? I think if we want to generate more jobs in the United 
States there are a sensible set of fiscal policies that can 
help to do that, and I can talk about them more during the 
question and answer period.
    Over the long term, we really need to keep our eye focused 
on the real issues in the American labor force: the education 
and skills of the workforce, the ability of the American 
workers to get health care, child care and other important 
supports. I think we might make some changes in the immigration 
law, but, again, we need to keep our eye on the long-term ball, 
not on the short 3- to four year period that is very unusual 
and that is subject to different interpretations.
    Thank you.
    Mr. Hostettler. Thank you, Dr. Holzer.
    [The prepared statement of Dr. Holzer follows:]

                 Prepared Statement of Harry J. Holzer

    Two recent papers, by Steven Camarota (2004) and by Andrew Sum et. 
al. (2004), present data showing that the employment of new immigrants 
in the U.S. rose during the period 2000-2004, while that of native-born 
Americans (and even earlier immigrants) declined.
    A superficial reading of the data in these papers might suggest 
that rising immigration in the past four years has been a key factor in 
accounting for the poor labor market performance of native-born 
Americans during this period. But such a reading would be highly 
inaccurate. The employment outcomes of native-born Americans mostly 
reflect the underlying weakness of the U.S. labor market, rather than 
large displacements by new immigrants.

  Net immigration has remained fairly constant between the 
1990's and the post-2000 period; instead, what has changed is the rate 
of job growth in the U.S. economy.

    During the 1990's, 13 million immigrants arrived in the U.S., for 
an average of about 1.3 million per year (Capps et. al., 2004). Since 
the year 2000, that rate of immigration has remained largely unchanged 
(Sum et. al., Table 1). The total share of immigrants in the population 
has risen only from 11 to 12 percent during the past four years.
    In contrast, the rate of net job growth in the U.S. has collapsed 
between the late 1990's and the period since 2001. Between March 1995 
and March 2000, our economy generated nearly 15 million new nonfarm 
payroll jobs and increased employment by about 13 million.\1\ But, 
after a period of modest job growth between March 2000 and 2001 (with 
payroll and employment increases of about 1 million each), the economy 
went through a short recession followed by a relatively ``jobless'' 
recovery for 3 years. Between March 2001 and 2004, total employment 
grew by just over one-half million, while the number of nonfarm payroll 
jobs declined by about 1.7 million. At the same time, the US population 
grew by about 8 million. In the past year, job growth has picked up 
somewhat, though the labor market remains quite weak.\2\
---------------------------------------------------------------------------
    \1\ The Bureau of Labor Statistics (BLS) calculates employment 
rates of individuals from its monthly Current Population Survey of 
households, while numbers of payroll jobs are drawn from its survey of 
establishments. The latter is based on much larger samples and is 
widely considered more accurate in the short term. But the former 
captures self-employment and casual employment that may not appear in 
official business payrolls.
    \2\ Between March 2004 and 2005, both employment and payroll jobs 
rose by over 2 million. But the percentage of the population employed 
in March 2005 remained at 62.4 percent--well below the peak of 64.7 
achieved in the year 2000.

  Contrary to the interpretations suggested by Camarota and Sum 
et. al., immigration cannot possibly account for many of the labor 
---------------------------------------------------------------------------
market developments that have occurred since 2000.

    In the 1990's, strong immigration coexisted with very low 
unemployment rates and record high percentages of the population 
employed. Indeed, immigration helped to relieve the pressure of very 
tight labor markets on employers, who had difficulty finding enough 
native-born workers able and willing to fill the jobs they were 
offering. Yet the same rate of immigration today coexists with a 
sluggish labor market, in which an additional 5 million jobs would be 
needed to recreate the employment rates of the late 1990's and 2000.\3\
---------------------------------------------------------------------------
    \3\ With a population of over 225 million, it would require about 
5.2 million more jobs to generate the peak employment rate of 64.7 
achieved in the year 2000.
---------------------------------------------------------------------------
    The papers by Camarota and Sum et. al. clearly show that, in the 
aggregate, employment among new immigrants has increased while that of 
native-born Americans has declined since 2000. But a look at some more 
disaggregated data suggests a far more complex story. While new 
immigrant employment has been relatively concentrated in a small number 
of sectors (such as building/grounds maintenance, food preparation and 
construction), the shifts in jobs across other sectors of the U.S. 
economy have been much greater.
    For example, the number of payroll jobs in manufacturing declined 
by about 3 million between March 2000 and March 2004; new immigrant 
employment rose, but only by 335,000 (Sum et. al), in this sector. The 
number of payroll jobs in the public sector rose in this time period by 
850,000; almost none of these jobs went to new immigrants. Strong job 
growth has occurred in diverse services such as health care and 
professional services, while employment growth has slowed or declined 
elsewhere (such as in retail trade), in patterns almost completely 
unrelated to immigration.\4\
---------------------------------------------------------------------------
    \4\ These numbers are calculated from various tables available at 
the BLS website (www.bls.gov).
---------------------------------------------------------------------------
    Indeed, the U.S. labor market is one in which many millions of jobs 
are newly created and newly destroyed every year. Millions of workers 
are constantly reallocated across firms and sectors of the economy 
(Davis et. al., 1996). When the overall rates of new job creation in 
the economy exceed those of job destruction, net job growth is 
positive; when overall job creation lags behind (or is comparable to) 
job destruction, then net job growth is weak. Either way, the new 
employment of a few million immigrants over a 3- or 4-year period has a 
major effect only on the small number of sectors, especially in 
specific geographic regions, where they are heavily concentrated; 
otherwise they play a fairly minor role in the overall churning of the 
labor market.
    Does the labor force participation behavior of native-born workers 
and immigrants respond differently to a strong or weak economy? In a 
strong job market, American workers respond by entering the labor force 
in great numbers--as they did in the 1990's. But, in a weaker job 
market, some Americans withdraw from the labor force in favor of other 
pursuits--such as enrollment in higher education. Since immigration 
rates to the U.S. and immigrant participation in the labor force are 
much less sensitive to these changes in our economy, their net share of 
labor force activity and employment will temporarily bump upwards when 
this occurs--as they have since 2000. But none of this implies that 
immigrants are directly displacing U.S. workers in large numbers.
    One other area in which a weak overall labor market affects 
American workers is in their real earnings--i.e., their rates of pay 
adjusted for inflation. In the past four years, increases in earnings 
have been fairly modest, despite the dramatic growth of productivity in 
the U.S. workforce. In fact, the average real earnings of over 100 
million nonsupervisory workers have failed to rise at all in the past 
two years.\5\ This development is another sign of a weak overall labor 
market, and cannot possibly be attributed to the 2 million or so new 
immigrants who have gained employment in the U.S. since 2000.
---------------------------------------------------------------------------
    \5\ Between March 2003 and 2005, average weekly earnings of 
nonsupervisory workers rose by just 3.6 percent--well below increases 
in the Consumer Price Index (CPI) and other measures of inflation in 
the same period. Yet worker productivity grew by about 7 percent in the 
same period.

  Over the next few decades, tight labor markets are likely to 
---------------------------------------------------------------------------
return as Baby Boomers retire in large numbers.

    Will the current weakness of the U.S. labor market last 
indefinitely? Most economists expect the labor market to strengthen 
over the next several years, although the exact pace at which this will 
occur remains uncertain.
    Over the longer term, the labor market will be hugely affected by 
Baby Boomer retirements. Roughly 60 million workers, now aged 41-59, 
were born in the period 1946-64. They will soon begin retiring in large 
numbers, and will likely generate a period of labor market tightness 
that will persist over 20-30 years. Indeed, all net growth in the labor 
force over the next two decades will be generated by immigrants (Aspen 
Institute, 2002).
    There are many ways in which the labor market will adapt to these 
changes. Retirements will be delayed; labor will be replaced by new 
technologies and foreign outsourcing; and wages in some sectors will 
need to rise. But immigration should also play a key role in this 
adjustment process (Ellwood, 2001). Indeed, foreign-born students and 
workers will be a major source of new scientists and engineers in the 
U.S. over the next few decades, and will be critical to continuing 
productivity growth here (Freeman, 2004). The role of immigrants in 
other sectors of the economy where extremely tight labor markets are 
expected--such as nursing and long-term care for the aging population--
will be critical as well.

  Most studies show that, over the longer term, immigrants have 
very modest negative effects on the employment of less-educated workers 
in the U.S., but generate other benefits for the U.S. economy.

    Professors George Borjas and Lawrence Katz of Harvard University 
have recently calculated that immigration in the period 1980-2000 might 
have reduced the earnings of native-born U.S. workers by 3-4 percent, 
with larger negative impacts among high school dropouts but smaller 
among all other education groups (Borjas and Katz, 2005). Their 
estimates are at the high end of those generated by labor economists; 
others, including Professor David Card of the University of California 
at Berkeley, have found smaller negative effects (Card, 2001).
    Virtually all economists agree that immigrants also provide some 
important benefits to the U.S. economy. Beyond providing labor in 
sectors and areas where tight markets and even shortages might 
otherwise occur, immigrant labor helps reduce the prices of some 
products--such as housing and certain foods. These lower prices imply 
higher real incomes to most Americans, including the disadvantaged.

  Native-born American workers, especially those who are less-
educated, would be best served by policies designed to stimulate more 
employment in the short term while improving their skills and 
supporting their incomes in the longer term.

    Since native-born workers have been hurt not by rising immigration 
but by declining job growth in the past four years, policies that 
encourage greater job growth might be considered in the short term. For 
instance, tax cuts and public spending could be much better targeted to 
those who generate more spending and therefore more employment--i.e., 
lower-to-middle income Americans--rather than the wealthy. Temporary 
tax credits for new job creation and business investments might be 
considered as well.\6\
---------------------------------------------------------------------------
    \6\ The New Jobs Tax Credit of the late 1970's, and the Investment 
Tax Credit of various time periods, could serve as models for any new 
such credits now.
---------------------------------------------------------------------------
    Over the longer term, Americans need to improve their skills to 
maintain and increase their earnings growth. For the disadvantaged, 
this can be encouraged by a wide range of efforts, such as expanding 
higher-quality pre-school programs, reforms in K-12 education, more 
public support for occupational training and internships/
apprenticeships, and greater funding for Pell grants and other supports 
for higher education. Expanding access to work supports like health 
care and child care, along with higher minimum wages and expansions of 
the Earned Income and Child Tax Credits, would help as well.
    Immigration reforms that adjust the skill mix of those entering the 
U.S. over time might also be considered. But these should be based on a 
careful reading of our skill and labor market needs over the next 
several decades, rather than a misreading of our very recent 
experience.
    Conclusion
    Recent papers by Sum et. al. and by Camarota show that employment 
of immigrants rose while that of native-born Americans declined between 
2000 and 2004. But these findings do not prove that the former 
development caused the latter to occur. Indeed, immigration has 
occurred at a fairly constant rate in the U.S. since the 1990's--while 
employment and earnings growth of American workers have fluctuated 
dramatically. Over the long term, immigration has modest negative 
effects on less-educated workers in the U.S. but other positive effects 
on the economy--and the latter will grow much stronger after Baby 
Boomers retire. American workers are thus best served by policies 
designed to stimulate job growth in the short-term, and their own 
skills and incomes over the long-term, rather than by policies to 
drastically curb immigration.

                               REFERENCES

Aspen Institute. Growing Together or Growing Apart. Aspen, Colorado. 
    2002.
Borjas, George and Lawrence Katz. ``The Evolution of the Mexican-Born 
    Workforce in the United States.'' Paper presented at the conference 
    on Mexican Immigration and the U.S. economy, National Bureau of 
    Economic Research, Cambridge MA, February 2005.
Bureau of Labor Statistics website. www.bls.gov. Various tables.
Camarota, Steven. ``A Jobless Recovery? Immigrant Gains and Native 
    Losses,'' Center for Immigration Studies, Washington D.C., October 
    2004;
Capps, Randolph et. al. The New Neighbors: A User's Guide to Data on 
    Immigrants in U.S. Communities. The Urban Institute, Washington DC, 
    2004.
Card, David. ``Immigrant Inflows, Native Outflows, and the Local Labor 
    Market Impacts of Higher Immigration.'' Journal of Labor Economics, 
    January 2001.
Davis, Steve; John Haltiwanger and Scott Schuh. Job Creation and 
    Destruction. Cambridge MA: MIT Press, 1996.
Ellwood, David. ``The Sputtering Labor Force of the 21st Century: Can 
    Social Policy Help?'' In A. Krueger and R. Solow eds. The Roaring 
    Nineties. New York: Russell Sage Foundation, 2001.
Freeman, Richard. ``Doubling the Global Workforce: The Challenge of 
    Integrating China, India and the Former Soviet Union into the World 
    Economy.'' Presentation at the Institute for International 
    Economics, Washington DC, November 2004.
Sum, Andrew et. al., ``Foreign Immigration and the Labor Force of the 
    U.S.: The Contributions of New Foreign Immigration to the Growth of 
    the Nation's Labor Force and its Employed Population, 2000 to 
    2004,'' Center for Labor Market Studies, Northeastern University, 
    Boston MA, July 2004.

    Mr. Hostettler. We will now turn to questions from the 
Members of the Subcommittee.
    First of all, Dr. Camarota, you conclude that over a recent 
four year period, the number of Native born Americans with jobs 
dropped by almost 500,000, while the number of immigrants with 
jobs increased by over 2 million. Do you believe that there is 
any relationship between the two numbers?
    Mr. Camarota. Yes. I think if we look deeper into the data 
we do see that the areas where natives often do the worst are 
those sectors of the economy such as building, cleaning and 
maintenance, construction labor, food processing and 
preparation. In those sectors, unemployment averages about 10 
percent for natives, and have seen some of the biggest hits. 
And it is precisely in those sectors where we have added the 
most immigrants. In just those sectors we have added over a 
million new immigrants in just those low-income job categories 
in the last 4 years. Two-thirds of those are probably illegal 
aliens, based on the data.
    At the same time, there were 2 million Native born adult 
Americans in those very same occupations who said that they 
were unemployed and looking for work. So if you look at the 
States, too, geographically you do seem to find evidence that 
places with lots of immigrants also had the worst job 
performance for natives.
    Mr. Hostettler. I appreciate that.
    You have also done work on Social Security, the impact on 
Social Security. In these portions of the labor market that you 
are talking about, do individuals who contribute to Social 
Security in those portions of the labor market, do they wind up 
receiving more in benefits in Social Security or less in 
benefits than they paid into the system?
    Mr. Camarota. Right. One of the reasons immigration is a 
problem for the Social Security system is the Social Security 
system is redistributive in nature. And because such a large 
share of immigrants have very little education, they make very 
little money--even legal immigrants paid on the books and that 
sort of thing. As a consequence, they don't pay that much in 
Social Security taxes because in the modern American economy, 
people with relatively little education don't pay that much. 
However, when it comes time to retire, we generally pay them a 
more generous benefit. So immigration creates problems for the 
Social Security system because of it's redistributive nature. 
And there are other factors as well.
    Just very briefly, we have something called the earned 
income tax credit. A very large share of legal, unskilled 
immigrants qualify for that, and that is designed to give you 
back basically all or most of your Social Security tax. So, 
overall, immigration is problematic for the Social Security 
system.
    Mr. Hostettler. Thank you very much.
    Dr. Harrington, do you agree with Dr. Camarota that large 
numbers of new immigrant workers are directly competing with 
Native born workers for jobs and that these are jobs that 
Americans will, in fact, do?
    Mr. Harrington. Yes, I do. I think the evidence is that we 
have got about--a little bit over a third of all newly employed 
immigrants are high school dropouts. They also found that about 
70 percent of them are under the age of 35. When you look at 
the structure of employment rates, in other words, the 
probability that somebody has a job by age and by educational 
attainment, you see that the employment rate declines are the 
highest among high school dropouts over the last 4 years among 
Native born, and you also see that the decline in employment 
rates are the largest among teens. In fact, when you look at 
the other end of the labor market where there are few 
immigrants, that is, adults 55 and over, only 3 percent of the 
total rise in immigrant employment is among that 
population.That is the only group of Native born workers where 
the employment rates have risen.
    So I think the evidence is very clear that there is this 
competition between immigrants and Native born. I think the 
evidence that particularly teenagers and young adults just 
refuse to take jobs that immigrants take is just absolutely 
wrong.
    Mr. Hostettler. Thank you.
    Mr. Reindl, you have a unique perspective on the impact of 
immigration, especially illegal immigration, on employment and 
the economy, especially with regard to companies such as your 
own, which make it a matter of resolve to follow the 
immigration laws. In the Intelligence Reform bill passed last 
year by Congress and signed into law by the President, we 
called for a significant increase in Immigration and Customs 
Enforcement agents, in fact, in the House. We wish to have at 
least half of those new agents dedicated to employer sanctions.
    As an employer in an industry of employers, what impact do 
you think it would have on the employment of illegal aliens if 
employers realized in New York, for example, that a large 
number of Immigration and Customs Enforcement agents, ICE 
agents, were dedicated to enforcing the employer sanctions law.
    Mr. Reindl. If they actually made headlines and locked up 
some of these unscrupulous employers, and employers see that 
you are going to get caught, it will have a great impact. That 
is the whole key. You have to enforce the law. We are just not 
doing it. It is at every level of Government. It is not just 
ICE doing it. What about Social Security fraud? What about 
income tax? What about IRS? I mean, these laws are being 
blatantly broken in our faces, and no Government agency will 
enforce it.
    I have complained to worker's comp, New York State, the 
Department of Labor, to go after these hiring sites. No 
investigations. None. Every level of Government, no 
enforcement. That is what I see, if we can start getting all 
the different agencies together and cracking down, especially 
where it is being thrown in our face, that is the first thing 
you have to do. Thanks.
    Mr. Hostettler. Thank you. My time has expired.
    The Chair now recognizes the gentlelady from Texas for 5 
minutes.
    Ms. Jackson Lee. Mr. Chairman, if I might ask unanimous 
consent to call on the Ranking Member of the Full Committee at 
this time.
    Mr. Conyers. Thank you, Mr. Chairman. I think what we have 
been hearing is that American workers are being negatively 
impacted in our economy by foreign workers, mostly illegals.
    And Professor Holzer, I think that may be an 
oversimplification because we have had a decline of job growth. 
We have had a stagnant economy, more or less. So I think it is 
too easy to just raise up the immigrants who are kind of easy 
targets to make this kind of accusation. If we move forward on 
that premise legislatively, I think we may be going in the 
wrong direction. What say you?
    Mr. Holzer. I largely agree with those comments. Again, if 
you look over a longer time period the rate of immigration in 
the last 4 years is no different than it was in the roaring 
1990's when the same level of immigration was consistent with 
very low unemployment rates, very high percentages of the 
population employed.
    How could the same level, the same rate of immigration now 
have generated all these problems, not only for the millions of 
Americans who aren't working, but again for well over 100 
million workers who are actually experiencing negative wage 
growth? That cannot possibly be attributed to this influx of 
immigrants, which is no different now than it has been over the 
previous many years.
    Again, when you look at many different sectors of the 
economy, except for those few where the immigrants are 
concentrating--look what is happening in manufacturing, health 
care, many other sectors--one cannot possibly attribute the 
large increases or decreases in employment to the flow of 
immigrants. We need to look at the economy broadly, not just 
those few sectors where immigrants are concentrated.
    Mr. Conyers. Well, here is the problem. Illegal immigrants, 
yes. We have got to go after them. We have got to prevent them 
from coming over or coming into the country. But there are a 
number of areas in our economy where we need immigrant labor, 
and I don't know if that point has been made here, but I think 
Mr. Reindl was moving in that direction when he was saying if 
you are not prosecuting employers who are exploiting foreign 
labor then you are not going to get any resolution to the 
problem. If IRS isn't prosecuting vigorously, that adds to it.
    Do you think that we have, Mr. Reindl, a problem in which 
we can say we have got to get to this immigrant problem but at 
the same time we don't say--and, also, we need immigrant labor 
because a lot of things wouldn't happen without them because we 
have jobs that many Americans won't take no matter what their 
condition is?
    Mr. Reindl. Well, there is no job an American won't take. 
It is just that the pay levels have been depressed so much that 
they are seeking jobs elsewhere. At least in my field that is 
how it is.
    As far as enforcement goes, you hit it on the right head. 
There is no enforcement.
    But one thing--it is not just, like this day laborer sign 
that I was holding up before. There are legal and illegal 
immigrants getting jobs at this site, working off the books. 
They are not paying into Social Security. They are not paying 
into worker's comp, and there is just no enforcement at any 
level. But it is both legal and illegal, and it drives me nuts 
that our Government allows this.
    Mr. Conyers. What about, Mr. Holzer, these huge trade 
agreements, NAFTA, CAFTA, China Most Favored Nation, promoting 
U.S. corporations to go overseas? We have a great deal of 
outsourcing in labor going on, our outsourcing that creates 
unemployment here. The automobile industry is now becoming an 
example of that in Michigan.
    Mr. Holzer. I would favor the elimination of tax subsidies 
and credits that encourage outsourcing that work.
    More broadly, though, I believe that international trade, 
exports and imports do create benefits for the American 
consumer as well as some losses for the American worker. I 
think we need to balance, carefully balance those benefits and 
costs in a strong robust labor market. If we also invested in 
the retraining and reeducation of many of those workers as well 
as a better set of unemployment insurance and other supports, 
the damage done to those workers losing those jobs would be 
considerably reduced.
    Mr. Conyers. Well, on the next round I want to talk about 
how we get to a full employment economy.
    Mr. Hostettler. The Chair now recognizes the gentleman from 
Iowa, Mr. King, for 5 minutes.
    Mr. King. Yes. I thank the Chairman, and I appreciate the 
testimony of the witnesses. This subject is interesting to look 
at the economy from the perspective of yourself, Mr. Reindl, 
and versus the broader perspective as proposed by Mr. Holzer. I 
would direct my first question to Mr. Holzer. That is, is there 
such a thing as too much immigration, be it either legal or 
illegal?
    Mr. Holzer. I wouldn't say that any total number of 
immigration is too much. I think it really depends on the 
nature of the immigrants and how they get here and what their 
characteristics are.
    Like all of the witnesses today, I am concerned about 
undocumented and illegal immigrants. I believe in enforcing the 
laws we have to the best of our ability. I also believe that no 
matter what we do on the enforcement side that some of those, 
many of those workers will still be here, especially the ones 
who have been here.
    Mr. King. With regard to whether there is such a thing as 
too much immigration, you would qualify, then, the type of 
immigrants and the characteristics they bring with them, the 
work skills. What about cultural background? Would they be 
things that you would consider?
    Mr. Holzer. I would be very reluctant to look at cultural 
backgrounds. I think that is very easy to misinterpret, and we 
don't know how those translate into the labor markets. Again, 
some kinds of immigrants are probably more desirable from a 
strictly economic point of view than others. But I think at all 
skill levels, immigrants do contribute to lower costs, lower 
prices.
    Mr. King. Let us go to my question. How much would be too 
much immigration, provided that, say, we have talked about low-
skilled, unskilled, illiterate people coming in and taking 
these jobs that allegedly Americans won't take. I happen to 
agree with Mr. Reindl. I believe that Americans will do any job 
and that you have to pay them for it and provide the benefits 
for that.
    Unskilled, illiterate labor, either legal or illegal, how 
much would be too much for a nation that has a population of 
roughly 282 million people?
    Mr. Holzer. I don't know the answer to that. I am not sure 
anyone has a fixed number they can say.
    Mr. King. Isn't that, Mr. Holzer, the central question 
here, that as we open the doors up and we get greater and 
greater groups of immigrants coming in, if we don't address 
that question and have a national debate on how much 
immigration is too much, we can't begin to deal with the other 
questions that are underneath that great umbrella question?
    Mr. Holzer. No. I would argue that the central question--
given the level of immigration that we are realistically 
talking about, which has been fairly constant over time, we are 
not bumping into these theoretical hypothetical limits.
    Mr. King. Let me----
    Mr. Holzer. If I could finish, the question is what to do 
with the immigrants to have a level playing field.
    Mr. King. I asked the question how much is too much. We 
stopped our immigration and gave a time for assimilation back 
in the 1920's. We didn't have an acceleration immigration 
policy during that period of time all the way up until we 
adjusted policy in the early 1960's and adjusted the policy in 
the 1980's. So maybe the legal numbers coming in the 1990's 
aren't a lot different than the legal numbers coming in this 
decade.
    But I would submit to you this question, how would we know 
how many came in? Are we 8 million, 10 million, 12 or 14 
million illegals, or is that number larger or smaller?
    Mr. Holzer. As I said, I believe the rate of incoming 
immigration has remained constant over the time. It is well 
below the peak levels at the turn of the 20th century----
    Mr. King. Yes. Is that percentage of population or in total 
numbers?
    Mr. Holzer. As a percentage of our population.
    Mr. King. I would agree with that. Thank you.
    I would turn to Mr. Reindl to make a statement here. I have 
certain empathy with you. I spent my life building a 
construction company and sold that company to my oldest son a 
couple of years ago. He finds himself in a condition today 
where he is competing against his competitors that hire illegal 
labor. He pays benefits, provides year-round jobs, retirement 
benefits, health insurance benefits and guarantees them 12 
months of work.
    He has just finished a job where they have to wait for the 
carpenters to come in from Mexico in order to begin, because 
they don't come as early because it is cold in that part of the 
country until about the 1st of May or so, and they leave 
earlier than the end of the year.
    I tell him, you must hire legals, not illegals, no matter 
what the temptation is, no matter how hard you have got to work 
to survive.
    I would just ask you to address that subject matter. Can 
you continue facing that kind of competition?
    Mr. Reindl. Believe me, it is getting harder. It is getting 
harder every day. My competitors are hiring either illegals or 
they are not paying their full share of benefits. It is now 
kind of unheard of in my industry to pay for full health 
benefits for my employee and their families. I am one of the 
rare shops that is doing it now. I don't know if I can continue 
because my product price can't be raised.
    Mr. King. Then I don't know if anyone has spoken on this 
panel to the effect on the middle class. What is happening in 
your opinion to the middle class that we have had in America?
    Mr. Reindl. I think it is shrinking, obviously. I mean, so 
many friends my age are moving out of New York and fleeing to 
other States where the housing is less because they just can't 
make ends meet in New York. So it is getting tough on us.
    Mr. King. I thank you.
    Then quickly to Mr. Camarota. With the statement made by 
Mr. Holzer with regard to our immigration numbers are not 
greater than they have been at the peak period of times in the 
early part of the 20th century, could you speak to that, Mr. 
Camarota?
    Mr. Camarota. Yes. Well, in terms of absolute number, 
obviously, the number coming in. In terms of percentages, we 
did hit an all-time high in 1910 of about 14.7 percent. But we 
will probably be at that all-time high and then beyond that at 
the current rate within about a decade or so. So we are on 
track to pass what was a very unusual time in American history 
anyway.
    Mr. King. Even as a percentage of the overall population?
    Mr. Camarota. In terms of numbers we have triple the number 
of people.
    Mr. King. Thank you, Mr. Camarota. Thank you, Mr. Chairman. 
I now yield back.
    Mr. Hostettler. The Chair recognizes the gentlelady from 
Texas for 5 minutes.
    Ms. Jackson Lee. Thank you, Mr. Chairman. Ms. Sanchez, do 
you want to go at this time?
    Ms. Sanchez. Yes. If you will yield, I would.
    Ms. Jackson Lee. I will go after you.
    Ms. Sanchez. Thank you.
    Ms. Jackson Lee. I would ask unanimous consent to allow Ms. 
Sanchez to go, and I will follow her.
    Mr. Hostettler. Without objection.
    Ms. Sanchez. Thank you. I am interested, Mr. Camarota, in 
your testimony. You stated that between March 2000 and March 
2004 the number of unemployed adult natives increased by 2.3 
million, but at the same time the number of employed immigrants 
increased by 2.3 million.
    Looking superficially at those numbers, it sounds like a 
very compelling argument. Now, I am not a statistician, but 
wouldn't you agree that the two events could have occurred 
independently from one another or have been completely mutually 
exclusive?
    Mr. Camarota. As I said, it would be wrong to think that 
somehow every job taken by an immigrant is a job lost by a 
native. But if we look at those parts where native unemployment 
went up, in some of the biggest rates by education or by age or 
by occupational category, they do tend to be precisely those 
parts of the economy where there was the largest influx of 
immigrants. And if we----
    Ms. Sanchez. But the question is, though, if you just look 
superficially at that, could those two things have happened 
independently or mutually exclusively of one another?
    Mr. Camarota. I don't think they did but they could have, 
sure.
    Ms. Sanchez. Thank you. This is for all the panel.
    I am just going to throw some things out there and I am 
going to be peppering you all with different questions.
    But you know it is interesting, some of you on the panel 
have said that there are no jobs that Americans won't take. 
Well, we have had previous hearings where we have had folks in 
the dairy industry out West talk about jobs that pay $12 and 
$14 an hour that they have advertised for and cannot get any 
American workers who are willing to do that work.
    So they find that there is a need for immigrant labor. So I 
am just going to throw that out to you, that you know this 
absolute--there are no jobs that no Americans, that some 
Americans won't take--It actually does occur, in fact. It is 
not a rare phenomenon.
    Coming from a great agricultural State of California, there 
are a lot of jobs, trust me, in California, that there are 
Americans who aren't willing to do that work despite repeated 
attempts.
    I want to ask Mr. Harrington and Mr. Camarota. You talk 
about enforcement of immigration, and you talk also about 
depressed wages and lack of benefits. Don't you think we could 
achieve the objective of trying to raise wages and raise 
working conditions if we enforced labor protections and 
workplace enforcement of working conditions? Isn't that one 
side of the equation? Because I haven't heard you all speak too 
much about that.
    Mr. Harrington. I think that is a very important side of 
the equation. One of the things Mr. Reindl talked about was the 
creation of new labor market institutions. When I drove in this 
morning I came from Annandale, Virginia and on Little River 
Turnpike out there is a shape-up. It is a group of guys that 
are standing at 7-11 about 6 in the morning. These are guys 
going to get picked up and engage in a wide variety of under-
the-table economic activities, largely cash payments. Whether 
they get paid or not I don't know. It is certainly not going to 
contribute to the State's unemployment insurance system, Social 
Security system and the like. But there has been a----
    Ms. Sanchez. I am talking about the employers. Let us talk 
about the employers, whether they are paying minumum wages--
    Mr. Harrington. That is what I am talking about. There are 
employers stopping at the shape-up picking these guys up on 
construction jobs, on landscaping jobs, on brick laying jobs, 
on a variety of activities, all of which disappears, it's all 
under the table. That is replicated thousands of time 
throughout the country. You will find it in D.C., you will find 
it in Philadelphia, you will find it in Los Angeles. We have 
created over the last 4 or 5 years a whole set of illegal labor 
market institutions that we have not seen since the Great 
Depression.
    Ms. Sanchez. So enforcement would help on that?
    Mr. Harrington. Absolutely.
    Ms. Sanchez. My time is very limited so I am going to skip 
really quickly to Mr. Reindl. I really feel for you because I 
used to do labor compliance work. I used to do go out to job 
sites construction job sites and make sure that the contractors 
that were on those jobs were paying their employees. Davis-
Bacon wages are in California little Davis-Bacon wages. 
Oftentimes they were cheating and not paying for wages that 
they were supposed to be. They weren't paying full worker's 
compensation.
    So I am very sympathetic to you, but I am going to make 
several suggestions to you: Number one, that tax breaks and tax 
incentives that give benefits to companies that reincorporate 
overseas or ship jobs overseas is probably one of the problems, 
because folks locally are finding it hard to compete with 
companies that do that to depress labor markets.
    And the free trade agreements that we sign into with other 
countries which don't include workforce protections or any 
labor rights also means that those labor markets have much 
depressed wages and so companies flee the United States in 
order to compete, because we are essentially giving them no 
other option. But we are incentivizing them from leaving this 
country. So it makes it very difficult to keep honest employers 
that are willing to pay benefits and willing to pay decent 
wages in business in the United States.
    I would just make this one last suggestion. You know, the 
minimum wage has not been raised in this country in the longest 
period of time since its inception in the 1930's. There are a 
number of us who have been trying to raise that minimum wage to 
get those wages up so there will be more competition for those 
jobs. Unfortunately, that is something that Congress has been 
unwilling to pass.
    With that, I will yield back as my time has expired.
    Mr. Hostettler. The Chair now recognizes the gentleman from 
Texas for 5 minutes.
    Mr. Gohmert. Thank you, Mr. Chairman. I just have a few 
questions. Let me ask, Dr. Harrington, you had given us a 
number of statistics. I am curious, do you have any idea what 
percent of the immigrants being employed, the foreign born 
immigrants, speak English?
    Mr. Harrington. I don't know the answer to that, sir.
    Mr. Gohmert. This can be to any of you. Is there any 
evidence that there are jobs taken by foreign born immigrants 
which have actually been refused by Americans first?
    Mr. Harrington. Sir, I can just speak to this. One of the 
ways economists judge what is going on in the labor market is 
something called the employment rate. When you look at the 
employment rate, particularly in our cities, you see the 
employment rates of young adults have plunged.
    In the City of Los Angeles, the employment rate for 16 to 
19-year-olds already low during the year of 2000 at 31 percent, 
fell to 21 percent just 4 years later. The State of California 
fell from 38 to 30, from the U.S. went from about 46 to 36 
percent. These are historically unprecedented declines in 
teens.
    Mr. Gohmert. We have seen increases in obesity, indicating 
perhaps laziness among teenagers. Do you have statistics that 
show that those 16-year-olds actually went in and applied for 
jobs?
    Mr. Harrington. No, sir, I don't.
    Mr. Camarota. I could just point out one thing.
    Mr. Gohmert. I thank you.
    Mr. Camarota. The current population surveys asks people 
are you currently looking for work, and what was your last job. 
When we look at that, we find millions of people who said, hey, 
I am really looking for work, and my last job was in hotel and 
restaurant, my last job was in food processing and preparation. 
Now maybe they are being deceptive or maybe they are not really 
looking, but the available evidence suggests that there are 
millions of people who say that very thing when asked.
    Mr. Holzer. If I could have a different reading of those 
same numbers.
    Mr. Gohmert. Sure.
    Mr. Holzer. The large joblessness or lack of employment 
that you see in inner city areas reflects a range of factors. 
One of the issues is the fact that a lot of young people become 
discouraged very early on and never even enter the labor force, 
because they see a very limited set of opportunities facing 
them in terms of jobs and wages. Early in life they make 
another set of choices that I think is very unfortunate, that 
they often regret later on. It is very important to improve 
those opportunities to help draw those workers in.
    However, there are workers looking for jobs, and the CPS 
does indicate that there are some number of million. That 
doesn't mean that they apply for every available job. I would 
dispute this notion that millions of unemployed workers have 
looked in these small number of sectors where immigrants are 
mostly concentrated.
    Mr. Gohmert. Are there any statistics regarding the number 
of unemployed foreign born immigrants, whether legal or 
illegal? Does anybody know?
    Mr. Camarota. Yes. There are statistics on that. 
Unemployment rates among immigrants vary quite a bit by 
education and so forth. Let us see if I can find you a rate 
here. The overall rate he says is a little bit higher. 
Immigrants are a little bit more likely to be unemployed. It is 
about 7 to 8 percent. It is a little bit lower for natives.
    Mr. Gohmert. Okay. Let me talk about the IRS not pursuing 
employers. Are there any estimates on how many employers or 
employees do not pay FICA or withholding to the IRS?
    Mr. Camarota. I can speak to the issue of immigration. Most 
sociological research indicates that between 50 and 60 percent 
of illegal aliens are paid on the books. In my work I have 
usually estimated 55 percent. Now what they usually--the 
evidence often----
    Mr. Gohmert. Paid on the books means----
    Mr. Camarota. Their employers pay Social Security, but what 
they usually do is get a lot of withholding so they don't pay 
any income tax. In other words, they usually claim a lot of 
exemptions. That way they don't have to file at the end of the 
year. That is usually--at least for Federal income tax, that is 
what they do.
    Mr. Gohmert. Anyone else? I thank you.
    Thank you, Mr. Chairman, I yield back.
    Mr. Hostettler. The Chair now recognizes the gentlelady 
from California for 5 minutes, Ms. Waters.
    Ms. Waters. Thank you very much, Mr. Chairman, and Members. 
I am trying to digest some of this data and information that is 
being presented to us. I think we should all look carefully at 
it, because I think it is important for us not to handle this 
as a political issue where people are fanning the flames of 
fear and division in an effort to make people think they are 
protecting them in some special way and approach this from a 
very strong public policy approach to deal with what is a 
problem.
    I do think we have a problem. I am not in denial about 
that. I do think there is some job competition. I don't know 
the extent of it. I am going to take a look at all of this 
information, and I think we should not be in denial about that.
    At the same time, I think we must recognize that for some 
of the people who are yelling the loudest, they are not yelling 
at this Administration and the President about protection of 
the border.
    As you know, the President put funds for 200 border patrol. 
Some of us have signed on both sides of the aisle a letter to 
the President saying that you promised 2,000 and that is not 
enough, but we want you to live up to your commitment to 
protect the border and to stop the flood of illegal 
immigration.
    One of the reasons it is so important for us to handle this 
with integrity is we do not want to confuse legal immigration 
with illegal immigration. We do not want to create hatred and 
division in the way that we handle this issue. So I think there 
are a number of things that must be done.
    In addition to securing the border, how many folks are 
willing to say that we are going to not just fine employers 
because that becomes a cost of doing business? How many people 
are going to make it a crime for employers to hire illegal 
immigrants? How many people are willing to do that?
    For those of you on the other side of the aisle, I thank 
you for being here. If my friends who are wanting cheap labor 
for certain sectors of our society and who will come up with 
kind of phony guest worker programs, are not willing to talk 
about making it a crime to hire illegal aliens, immigrants, I 
don't want to hear from them, because they are not serious 
about this.
    Again, we have talked about minimum wage. Some of the same 
folks refuse to support an increase in minimum wage. That will 
go a long way toward encouraging more natives to go after some 
of these jobs.
    Yes, it is not an either/or. There are some jobs that 
natives will not take. You are not going to find people in any 
of our districts flooding to the agricultural areas to pick 
grapes or lettuce or anything else. You know it. Everybody 
knows that, and we must recognize that.
    While I don't like these phony guest worker programs that 
would exploit immigrants in ways that will not recognize, in 
some way, the amount of time and the number of years they may 
put into this so that they can be looked at as those who would 
be supported for some kind of permanent status, I believe that 
we can work in ways that we can get tough on illegal 
immigration, recognize that some things have already happened 
in the system that must be taken care of.
    I am not for illegal immigrants not being able to be 
themselves. I know what happens when you don't have any money, 
when you don't have any food, your children are hungry. I know 
what happens, it is an increase in crime. So we can't have it 
all ways, we can't have it both ways.
    We can't have Members talking out of both sides of their 
mouth about this issue. If we are going to stem the tide of 
illegal immigrants that, yes, are causing competition in jobs, 
and, yes, they are taking jobs that some people would take, and 
recognize that there are jobs that natives will not take and 
recognize that we need an increase in minimum wage and we need 
to make it a crime for employers who hire illegal immigrants 
and the Federal Government--you know, Lou Dobbs has gone just 
wild on this subject. But the most interesting thing was they 
found that there were illegal immigrants who were working on a 
Federal Government project, who are working to construct a 
courthouse someplace.
    So, you know, we all have to see what role we can play in 
making sense out of this, and not simply talking about it in a 
way that will just not recognize the way this whole thing has 
evolved. We must also remember that most of this focus is just 
on certain illegal immigrants.
    Now, if you are from Cuba you can come as long as the boats 
can get you out of Cuba, and they have the wet foot/dry foot 
policy. You get one foot on land, then you can stay, and that 
is no, no ceiling on that.
    Now, if you are from Haiti, you can't come at all. So we 
have got a lot of work to do, and we have got to figure out how 
to do it with integrity, and we have got to make sense out of 
how not to just disregard the fact that we have allowed this 
problem to evolve over a period of time.
    You have families involved. People talk about deportation 
where you would split families. I am not for that either. Don't 
forget, you know, I come from African heritage where people who 
were brought to this country, families were split and sold off 
and went in one direction and the other direction.
    So that is why I say it is very complicated. We have to 
really approach it in a manner that will recognize all of these 
complications and not simply that there are illegal aliens, 
immigrants here who must be deported, or somehow we can have 
them here when we want them to do certain kind of work but when 
we don't need them we close down the border to them.
    Thank you very much, Mr. Chairman.
    Mr. Hostettler. The gentlelady's time has expired.
    The Chair now recognizes the gentleman from Arizona for 5 
minutes.
    Mr. Flake. I thank the Chairman and the witnesses.
    Mr. Camarota, what is your or your organization's estimate 
as to the number of illegals currently in the workforce here in 
the U.S.?
    Mr. Camarota. Yes. It looks like about 6 million total 
immigrants account for roughly, a little less than 3.5 percent 
of all workers and about 1.5 percent of economic output.
    Mr. Flake. So just over 6 million. Those are--those who are 
in the workforce being paid not under the table but as----
    Mr. Camarota. Oh, no, about 3 million of them are being 
paid under the table. That is a rough estimate, 3 million off 
the books.
    Mr. Flake. So there are as many being paid under the table 
according to your estimates?
    Mr. Camarota. Yes, a 50/50 split about.
    Mr. Flake. If we have--if we enforce the current law, the 
current law says that anybody who is here illegally, obviously, 
goes home. I have heard talk of some generational attrition or 
some other terms to deal with those who are here illegally now 
that are in the workforce.
    What is your recommendation for those who are here 
illegally now in the workforce? Is it to immediately enforce a 
law, send them home immediately?
    Mr. Camarota. Well, obviously we take quite a lot of time 
and effort to begin to enforce the law, so the process would be 
relatively slow.
    Mr. Flake. What is a lot of time?
    Mr. Camarota. Oh, I think it would take a couple of years 
to hire the agents necessary to really take a bite out of it. 
Nonetheless, I think if we started right now we would see an 
immediate effect on the number of illegal aliens in the United 
States.
    The way I usually articulate it is what we can have is 
attrition through enforcement. About 4- to 500,000 illegal 
aliens either go home on their own, get deported or get green 
cards actually each year. So if we can increase that number to 
maybe 6- or 700,000 and dramatically reduce the number of 
people coming in, the problem would take care of itself over 
time.
    Now there might be some long-term residents who have been 
here a long time. We might want to look at some kind of amnesty 
after we get a handle on enforcement.
    Mr. Flake. So amnesty you are in favor of?
    Mr. Camarota. Well, I said we might want to consider it, 
after we show that we are enforcing the law, the immigration 
law is back in business, the border is being policed properly 
and so forth, we can certainly consider that, yes, as a way of 
clearing the decks, tying up loose ends. But you certainly 
don't start with an amnesty when you haven't taken even the 
most elemental steps.
    Mr. Flake. I am puzzled as to why you believe it would take 
so long to start enforcing it. We have the technology now where 
any employer could know if a Social Security number issued is 
valid or not. We could do that tomorrow. I have had this 
software demonstrated in my office. We could do that tomorrow.
    We could have--your estimate is some 3 million that are 
working that have taxes withheld on their behalf. I would 
submit that number is far, far, far higher than that, given the 
amount of money that is collected that is in the Social 
Security system. We are told that it is 10 percent of the 
surplus we are running is money paid into dead accounts or 
fraudulent Social Security numbers.
    That says to me it is a lot more than 3 million. I think 
the number is a few hundred, 150 billion or so over a decade or 
a decade and a half that has been paid into dead accounts.
    So we have the technology, we just don't have the will 
right now to enforce it at the employer level. I am just 
wondering if we did enforce it and send them home, enforcing 
the law right now, an employer would have a $10,000 fine per 
occurrence if you hire somebody now knowingly that has a 
fraudulent Social Security number, what would you then 
recommend? Those who are unemployed here now be forced to take 
those jobs that they currently have, or do we have a 5-year 
plan like the Soviets used to where you move employees, like 
they have in Cuba today, where you move the unemployed to those 
systems? If you are an unemployed school teacher in Maine, 
there is a job for you in Yuma picking lettuce. What do you 
envision there?
    Mr. Camarota. The way the labor market works if there was a 
reduction in supply through labor enforcement through the law 
then employers would have two choices, they could either pay 
more and treat their workers better and offer more benefits if 
they couldn't attract workers at their current pay rate, or 
they can mechanize and invest in labor-saving devices and 
techniques.
    To give you an example, the sugar farm, sugar farming in 
Florida was once done mostly by immigrant labor, but more 
recently they simply got rid of all of that labor and they 
mechanized it. There are machines, and they are used in other 
countries, like Australia and Europe, to pick a lot of fruits 
and vegetables. But we don't have them here because the 
Government gives----
    Mr. Flake. If you look at the statistics from the Bureau of 
Labor Statistics over a 10-year period from 2002 to 2012, they 
see percentage increases, for example, registered nurses, 27 
percent increase; post-secondary teachers, 38 percent; retails 
salespersons, 15; nurses aides, orderlies and attendants, 25 
percent increase. We simply don't have the demographics to 
support over the next 10 years that kind of job growth.
    It is--I mean, you can argue if the demographics are this, 
but we simply don't. But you are arguing for fewer legal low-
skilled workers to come in. You make that argument in your 
testimony.
    How do you reconcile it? We just have to mechanize and 
change or what?
    Mr. Camarota. Pay unskilled workers better. I think one of 
the most serious problems we face in this country is all the 
unskilled workers who make so little. I would like to see 
enhanced increase in the minimum wage. I would like to see fair 
labor laws enforced more vigorously. But it seems to me you 
can't constantly add to the supply of labor at the bottom of 
the labor market and then bemoan the fact that people are 
discouraged workers, that work doesn't pay. That policy, 
current immigration policy is directly contrary to the idea 
that we want the poor in the United States and the working poor 
to do better.
    Mr. Flake. Thank you, Mr. Chairman.
    Mr. Hostettler. The Chair now recognizes the gentlelady 
from Texas for 5 minutes, Ms. Jackson Lee.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman.
    Mr. Camarota, I think that we can--I see it in my visioning 
that we have an opportunity for common ground and 
collaboration, because, frankly, it would be remiss of me, it 
would be certainly dishonest not to suggest that I am an 
enthusiastic supporter of increasing the minimum wage. In fact, 
I would like to welcome you in a meeting with the leadership of 
this House to sit down and talk about putting the minimum wage 
legislation on the Floor of the House almost immediately. It is 
valuable.
    I think this hearing is important. I thank the Chairman 
very much for this hearing, because I have listened to the 
questions of my colleagues on both sides of the aisles. The 
good news is, Mr. Chairman, that the questioning is valid, and, 
if you will, issues are being raised on both sides of the 
aisles about who is actually the necessary scapegoat for a job 
recession and the need for recovery.
    I think this hearing may suggest, as I did in my opening 
remarks, that this needs to be a topic to be discussed by a 
number of oversight Committees throughout this Congress, both 
the House and the Senate, because we have lagged behind in job 
creation. That is the crux of an immigration hearing today, 
that we have lagged behind in job creation.
    At the same time that prospectively, if there was a sort of 
engine into the economy, we need to look for a workforce or 
have a viable workforce here. With the demographics presently 
in the United States who happened to be maybe nonimmigrant and 
nonundocumented, we don't have the employee base if, for 
example, an economic engine was to immediately start up and 
look for people of varying types of skills.
    I made the point that I was just recently at the offshore 
technology conference, one of the largest energy conferences in 
the world, held in the energy capital of the world, we like to 
say, Houston, Texas.
    The bemoaning there, Mr. Camarota, was that we did not have 
that core group of educated, trained chemists and other 
scientists and geologists--an unfortunate statement to know 
that geology has been taken out of high schools--we are not 
preparing the workforce of the 21st century.
    If for example that industry was to grow and develop as I 
hope that it does fairly and balanced and with environmental 
protections and they look for a whole new level of workers, 
which could come from the trained workforce that we hope that 
we are producing out of America's secondary schools and 
colleges, they would not be there.
    In fact, I would say to you, even though this is not the 
Education and Workforce Committee, shame on us because we are 
actually not preparing Americans for the jobs in the 21st 
century.
    Let me just say to Mr. Holzer, you were taking an enormous 
number of notes, but let me pose a question for you, because I 
think your information is particularly important.
    The Ranking Member of the Full Committee asked the question 
that we talk about, naturalizing immigrants, are we talking 
about those who have legal permanent residency status right at 
this point? Are we talking about undocumented? So we need to 
clarify what we are talking about. I would like you to make 
that point first, because certainly there are immigrants in 
this country who are first-generation who happen to be citizens 
because they have gone through the process.
    The other thing is, speak to this issue of job creation and 
the plight that America faces with a diminishing base of 
potential workers and the devastation that would occur to 
America potentially if we did not have an increasing wave of 
workers. You might want to use as a backdrop countries like 
Germany, who had the closed door policy to immigration. If you 
have any backdrop information on that.
    You didn't mention it in your testimony, but I heard you 
say something about youth who took other opportunities, 
unfortunately which they didn't. But you are an American. Try 
to comment on this question of discrimination and the fact that 
there are populations in the United States that have been sort 
of thwarted of their opportunities, and they happen to be 
American, because of discrimination.
    So I would appreciate your making an assessment on those 
points and the points you think you may have left off the 
table.
    Mr. Holzer. Thank you. Let me try to address the issues you 
have raised. First of all, the issue is that there are very, 
very different groups of immigrants, some legal, some illegal. 
The niches they fill in the economy are really very different. 
To lump them all together is an enormous mistake, by the 
numbers that Mr. Harrington cited.
    Over one-fourth of the newly-arrived immigrants in the last 
4 years are college graduates and they are often filling jobs 
in science and engineering, in some parts of health care like 
nursing, where right now employers really are having difficulty 
finding workers at the low end, both among legal and illegal 
immigrants. There are jobs not only in agriculture.
    Ms. Jackson Lee. We shouldn't be happy with that though.
    Mr. Holzer. I agree with that. That is an important 
problem. I acknowledge what you and I agree is that the 
solution to that problem is not to cut off immigrants. It is 
changes in our immigration policies that open those doors and 
allow more Native born Americans to gain those skills so we 
would be less dependent on that immigrant flow.
    Similarly, even at the bottom end of the economy, not just 
in agriculture but in some parts of health care, we have great 
difficulty finding people to be home health aides, nurse's 
aides, et cetera. Again, we depend on the immigrants there, 
sometimes illegal, frequently legal, to come in. So, again, to 
lump all those different categories together I think is very 
problematic.
    The second issue you raised, I believe, was about education 
policies and how do we open more of those opportunities to 
workers, and especially in the context of a retirement issue, 
of baby boomers retiring in very large numbers. There, again, I 
think there is a wide range of ways in which our labor market 
will adjust to the retirement of baby boomers. Some of the 
earlier panelists have alluded to that. There will be 
increasing of wages in some sectors to draw more workers into 
those sectors, there will be increasing uses of technology, et 
cetera.
    But I think to close to door on immigrants in a time period 
when we are facing these potential labor shortages would be an 
enormous mistake. I don't think the labor market on its own, 
especially in areas like health care, where there are cost 
pressures containing and constraining the ability of providers 
to raise wages to the level that would draw in a lot of Native 
born workers.
    We will be quite dependent on foreign workers and certainly 
at the high end, not only in nursing but in science and 
engineering. Those will be very, very important sectors in 
which the flow of immigrants, once the baby boomers retire, I 
think will be very critical to the overall health and economy. 
So I think shutting those doors----
    Ms. Jackson Lee. You add the European model where 
immigration has been slowed or limited or blocked. Do you have 
any understanding of that?
    Mr. Holzer. I haven't looked closely at that model, but I 
think it is correct that part of the inability of some of those 
sectors in some of those countries to attract workers may be 
related to their restrictive immigration policy.
    Finally, I want to speak to this issue of the real problems 
faced by Native born minorities, low-income folks of all racial 
and ethnic groups who want and lack opportunities in this 
country. In fact, I spent my entire career doing research on 
those issues and worrying about those problems.
    I think, overwhelmingly, the economic literature suggests 
that if there is an adverse impact of immigration on those 
groups, that it is small potatoes compared to the wide range of 
barriers these groups face. Many changes in the economy in the 
last 20 years that have contributed to their disadvantage--
everything involving all kinds of new technologies, new trade 
patterns, the shrinkage of the institutions that traditionally 
have protected those workers like minimum wages and collective 
bargaining.
    I do think that many of these young folks do lack 
educational opportunities. They lack opportunities to get 
quality preschool. They lack opportunities to get quality K-12 
education. In many cases, they either don't develop the skills 
necessary for higher education or they lack the financing. We 
haven't allowed Pell Grants to grow at a rate at which the full 
number of people who could benefit from higher education would 
be allowed to afford it.
    As you indicated, discrimination does remain a problem. 
Study after study does document the continuing presence of 
discrimination in housing markets in our neighborhoods as well 
as in labor markets.
    So when you look at that full range of issues, there are 
things that could be done on each of those to open up 
opportunities, to draw more of those workers into the 
workforce, to improve their skills and their ability to 
compete. To focus so intensely on immigration is simply to be 
barking up the wrong tree or a very limited tree in a forest of 
many other causes.
    Mr. Hostettler. I thank the gentleman. The gentlelady's 
time has expired.
    Ms. Jackson Lee. Thank you.
    Mr. Hostettler. Just to clarify for the Subcommittee, that 
is the only tree we bark up in this Subcommittee is 
immigration. While those other issues are important, they 
happen to be the jurisdiction of other Committees.
    The Chair recognizes the gentleman from California, Mr. 
Lungren, for 5 minutes.
    Mr. Lungren. Thank you, Mr. Chairman.
    I came to Congress in 1979 and volunteered to serve on the 
Immigration Subcommittee because I was from southern 
California. I saw the impact of rampant illegal immigration but 
didn't have all the answers. I knew there were problems out 
there and attempted to try to bring some leadership to the 
Congress.
    I was the Republican floor manager for Simpson-Mazzoli, was 
one of the authors of the employer sanctions portion of that as 
well as the other half of that.
    I am as disappointed as anybody that employer sanctions 
haven't worked, haven't been enforced by Democrat or Republican 
Administrations. My sense is there is a failure of the will of 
the American people to support it or there has been thus far, 
in part because there is a feeling among the American people 
that we can't get all our jobs filled with Americans.
    So I would just like to ask the panel this--Look, I came 
here in 1979. We had illegal immigration at the time. We had a 
flow across our southern border. I investigated and discovered 
we had a flow across our southern border at least for a hundred 
years. It has been legal or illegal, depending on whether we 
had a program for it or not.
    In the number of years since I first came here, I have seen 
the impact of immigrants, both legal and illegal. But a large 
number of illegal immigrants are now in areas they weren't 
before, the construction industry, and areas of the country 
they weren't in before.
    When I was here before I said this is the impact in 
southern California, in the Southwest, you may see it later in 
the country. A lot of people didn't want to be concerned about 
it, because they never thought it would happen anywhere else. I 
defy anybody to go to any place on a construction site in most 
major metropolitan areas and not realize what language is being 
spoken, to go to landscaping crews, to go to hotels, to go to 
restaurants, et cetera.
    I mean the fact of the matter is, in my judgment, we rely a 
great deal on this immigrant labor.
    My point is--my question to the panel is this, number one, 
do you think it is reasonable that we could cut off the major 
flow of illegal immigration in this country, that being our 
southern border, without any adverse economic consequences to 
this country?
    Number two, do you really believe that all the jobs that 
are currently taken by those who are here illegally would 
readily be taken by American citizens?
    Thirdly, if you do believe that they would readily be taken 
by American citizens, at what economic enticement would that 
come?
    Dr. Camarota.
    Mr. Camarota. Yes, I most certainly believe we could 
enforce the law at a reasonable cost over time. I think that 
the economy would benefit, low-wage workers would benefit, the 
rule of law would benefit. American taxpayers would benefit. 
One of the things about----
    Mr. Lungren. Could I ask you a question?
    Mr. Camarota. Sure.
    Mr. Lungren. Where would you get the people to work in 
agriculture?
    Mr. Camarota. I think that you would get--what would happen 
is that you would see significant gains in productivity. They 
would move to like dry-it-on-the-vine agriculture like they use 
in Australia. They would buy the machines to pick the lettuce.
    Mr. Lungren. So mechanization rather than workers?
    Mr. Camarota. Well, I think that you attract workers to 
that by paying more, employing them year around, giving them 
benefits, treating them decently. So with those two things, 
gains in productivity as well as improvement in wages and 
benefits and working conditions, and the beauty of it is we 
have no fear that it will spike inflation because unskilled 
labor is such a tiny fraction of total economic output in the 
United States that even if wages for people at the bottom went 
up a lot it wouldn't mean anything even in the area of 
agriculture. The price of a head of lettuce, only about 15 
percent of it is based on the price of the guy who actually 
picks it.
    Mr. Lungren. Where would we find the folks who would be out 
working in the fields? Where would they come from?
    Mr. Camarota. As I indicated, you could attract Americans 
and legal immigrants in the United States by paying them better 
and treating them better.
    Mr. Lungren. But realistically, tell me where they are 
going to come from. In the 1930's and 1940's we had breaks at 
schools so school kids would go out and work in the fields. The 
college kids would do that. The folks from the city would go 
out and do that. We had a lot more people working there.
    I am trying to figure this out realistically because I am 
frustrated by this. I hear academics coming up here and telling 
me it will not have any impact if we cut it off. I see a 
Congress that refuses to come up with a guest worker program. I 
see a refusal of the Government to enforce employer sanctions.
    Frankly, at the end of this period of time things are worse 
than they were before. I hear people saying all we have to do 
is raise wages and we will have people flooding to the fields 
to work there. I would like to see that, but I really have 
skepticism about that happening. Where are they going to come 
from?
    Mr. Camarota. Well, there are hundreds of thousands--
whether you might not realize it--of Native born Americans who 
work in agriculture. There are also legal immigrants who work 
there, though it is true that a very large share of people who 
work there are illegal aliens.
    Nonetheless, there are huge productivity gains. Let me just 
give you an example. When they ended the Bracero program, which 
was our old guest worker program, the tomato farmers actually 
testified before Congress, if you end this program we are out 
of business, there is no way.
    What happened when they ended that program? They mechanized 
and productivity increased manyfold. Their profits went up. 
Even during the Depression there were farmers saying we can't 
find anybody to do this labor.
    What they have difficulty finding is people who will do 
very hard jobs when they don't want to pay anything. Consider 
coal mining is a perfect example. The job pays well, has 
benefits, and it is all done by natives but it is a miserable 
job and also increased our productivity.
    Mr. Lungren. But very--much less in numbers of people 
working in the coal mines than we had before because of 
mechanization?
    Mr. Camarota. That is exactly right. Good analogy, I like 
it.
    Mr. Lungren. So we will not have jobs taken by Americans; 
what you will do is eliminate those jobs?
    Mr. Camarota. There will be fewer jobs.
    Mr. Lungren. Right.
    Mr. Camarota. Pay better, have more benefits and the rest 
would be taken care of by productivity. I like your analogy. 
That is exactly what happened to coal mining.
    Mr. Lungren. That is one reason why people wonder why their 
tomatoes don't taste as good as they used to. It's because we 
developed tomatoes that have a tougher skin on them that could 
be mechanized--picked by mechanization instead of by 
individuals.
    My point is, though, if we are talking about jobs, what you 
are really saying to me is that we are going to eliminate a 
good number of those jobs so we won't have the need for this 
immigrant labor, but they are not going to be replaced in like 
number by American jobs.
    Mr. Camarota. But there will be fewer people competing for 
those jobs because immigration would be reduced. So the jobs 
that would remain would pay better, be here year round, have 
benefits, and be the civilized kind of work that would attract 
Native born Americans or legal immigrants as well.
    Ms. Jackson Lee. Would the gentleman yield?
    Mr. Lungren. I wish I had time to yield.
    Mr. Hostettler. The gentleman's time has expired. But if 
the witnesses are willing, I would like to turn to a second 
round of questioning, if there are no conflicts with schedules 
on the part of the witnesses. We appreciate that.
    We will now turn to a second round of questions. I will 
start with 5 minutes.
    Dr. Holzer, your response to an earlier round of questions 
was very enlightening to me and it actually answered a question 
that I had even before I had to ask it. But I am a registered 
professional engineer in the State of Indiana. My wife is a 
registered nurse in the State of Indiana.
    You have mentioned that as a result of cost containment 
that, well, I will have to get the record to see exactly what 
you said, but I think, in essence, that as a result of cost 
containment measures, it may be in fact that future--especially 
in the health care industry--that it may be in fact immigrants 
that take a preponderance of those jobs in the future.
    In fact, we understand now that we are going to be 
considering a provision in the supplemental bill that will add 
50,000 new legal permanent residents, potential permanent 
residents for the nursing field, new visas that will be handed 
out. The reason being--while economics was not my strong suit--
my understanding of economics to a great extent has to do with 
cost containment overall, in that an individual or an entity 
will pay only so much for a given good or service.
    So the point that you made, and it was made earlier with 
regard to the fact that the current trends in immigration with 
regard to the type of jobs that they take, and therefore, the 
magnitude of the wages that they earn and the amount of money 
that they pay in to Social Security, you mentioned in your 
testimony that in order to--you didn't say this, but I am 
extrapolating--in order to offset that, that in fact there is 
going to have to be an influx of much larger immigration 
numbers in the higher wage level categories. You mentioned, 
actually, science and engineering and health care once again.
    So given that the trend of your testimony is that we will 
have to allow for immigration purposes--and not necessarily 
illegal immigration purposes, as is the case with the bill that 
is going to be considered in the House tomorrow--but we are 
going to have to significantly increase the number of 
immigrants, visas available for immigrants, to take jobs such 
as in science and technology and health care that Americans 
won't do because of cost containment measures.
    I assume that what you are saying with cost containment 
measures is that we will not be able to pay health care workers 
and scientists and engineers wages sufficient for native 
Americans to go into those fields.
    Given the fact that there is discussion of a guest worker 
program that some of the Administration has said, we are going 
to match every willing employer with every willing employee, 
meaning in the world. Every willing employee in the world. That 
if we are talking about moving from melon pickers and apple 
pickers and roofers and the like to registered nurses, 
scientists, engineers and everything else, theoretically 
speaking, of a guest worker program and the trend of your 
testimony, aren't we saying that Americans will compete for 
wages, cost containments, however you want to put it, for wages 
with the rest of the world? That is my first question.
    Will we not be competing with--will our children and others 
be competing with every other engineer, engineering graduate, 
scientist, nursing graduate in the world, and, secondly, is the 
fact that a significant portion of the rest of the world has a 
lower standard of living than us, making it likely--and your 
testimony alludes to it somewhat--isn't it likely that those 
other people are going to be willing to take much less in wages 
and salaries to meet the requirements of the employer in the 
United States?
    Mr. Holzer. Mr. Chairman, there are several different 
strands to your question. I will try to disentangle them.
    Mr. Hostettler. There are actually two questions. First of 
all, isn't the United States worker in the future, with the 
guest worker program that says--and then this is theoretical--
every willing employer with every willing employee, is that not 
going to be the case with American workers, native workers 
competing with every other worker in the world? That is the 
first question. Not just my strand. Is there going to be 
someone else to compete with?
    Secondly, given the fact that 90 to 95 percent of the rest 
of the world has a lower standard of living than the United 
States, isn't that going to depress wages for those scientists, 
engineers, nurses, thoracic surgeons, cardiologists, whoever, 
in the health care industry in the future?
    Mr. Holzer. I think there are different issues that play 
out differently in different sectors. The amount of 
competition, coming from either guest workers or from foreign 
workers varies a lot from field to field.
    In health care, the demand for work to be done here in the 
United States is so strong that I think, again, it varies. In 
some parts of health care, such as nursing, the issue really is 
skills and whether or not domestically born students are going 
into those fields and developing those skills. The other 
areas--the bottom end of health care doesn't require a lot of 
skills, but their wages and benefits are what attract workers 
and keep them in that area.
    I don't believe that--. The rise in wages that would be 
necessary to balance that market, I think, would be quite 
large. I think guest workers, immigrant workers will help to 
meet that demand, which will be very strong. If you look at 
projections when baby boomers retire, the increase in demand 
for health care would be very dramatic. It would take large 
increases either in the supply of workers or in their wages to 
meet those demands. So I am not worried in that sector about 
Americans being crowded out or their wages being competed down 
because I think the demands are so strong.
    Mr. Hostettler. Excuse me, Dr. Holzer, I don't mean to 
interrupt. But you said in a previous question that cost 
containment measures are going to turn to the need for 
immigrant workers over Native born workers. I mean, that is in 
essence what you said, and now you are saying that won't be the 
case?
    Mr. Holzer. I think the demand will be so strong in that 
sector that--yes, I think cost containment is important because 
I think--when economists talk about the market equilibrating 
and wages rising to close these shortages, the increases in 
cost that would be necessary to meet that entire demand will be 
very large when you look to the future when the baby boomers 
are retiring. So I think it will not be possible to do that 
strictly through domestic workers because the cost increases, 
the wage increases necessary would be enormous. So there I 
think there will be a need for immigration and other sources of 
labor to help out, meet those needs.
    In other areas, you talked about Americans competing with 
workers around the world who earn lower wages, and that 
competition can occur in a lot of ways. It can occur through 
exports or imports of goods and services. It can occur through 
outsourcing. And I think, in some sectors, for instance, 
wherever it is possible to digitize the work that is done, 
potentially that work can be done overseas, and those workers 
in those sectors will face this competition. The estimates I 
have seen so far suggest that could be 10 to 15 percent of jobs 
in the United States, potentially, on the high end could face 
competition from engineers and computer programmers and others 
in India and China and other parts of the world. But in many, 
many other sectors there is a strong home bias. The work has to 
be done here; construction, health care, education, most of our 
domestic retail trade and entertainment services are all done 
here. So the amount of competition that will come from foreign 
workers who remain abroad in those sectors will be much less. 
So there is this potential competition, but I think it does 
vary greatly from one field to the next. And this fear that it 
will depress American wages overall I think is not probably 
well founded.
    Mr. Hostettler. Excuse me, just one more thing. They will 
be done here, but they won't necessarily need to be done by a 
Native born worker.
    Mr. Holzer. If the work remains here, that is right.
    Mr. Hostettler. Thank you.
    The Chair now recognizes the gentlelady from Texas, Ms. 
Jackson Lee.
    Ms. Jackson Lee. Thank you very much.
    Mr. Camarota, could you clarify, did you include 
naturalized citizens in your study?
    Mr. Camarota. Unless I otherwise--and there are places 
where I talk about illegals separately--I include all of the 
foreign born, and that includes legal permanent residents, 
illegal aliens, guest workers and naturalized U.S. Citizens.
    Ms. Jackson Lee. Out of the discussion that we have been 
having here today, would you care to alter that potential 
analysis? Let me try to understand.
    You don't take away from the very underpinnings of the 
founding of this country, which--besides unwilling slave labor 
that spent 400 years unpaid and building this Nation from its 
agricultural to its industrial to a certain extent--mostly it 
is agricultural, but certainly it is hard labor building 
buildings, et cetera. We just recently discovered that this 
Capitol, U.S. Capitol where we debate, was built on slave 
labor. But looking at the immigration of the late 1800's into 
the early 1900's, you are not suggesting that that was not a 
good phenomenon for America where these immigrants came in and 
helped build the population and ceded themselves into the 
American fabric of society; is that what you are suggesting out 
of this study?
    Mr. Camarota. Well, my study is trying to look at what is 
the impact on employment patterns for natives from immigration. 
So the reason one does that is hopefully to provide some 
elucidation about--an insight into what a policy might be based 
on what has happened so far. So that is all this study does.
    Ms. Jackson Lee. You are taking a historical perspective of 
looking at the immigrants, the Irish, the Italians and others 
who came, late 1800's into the 1900's; do you take that as a 
backdrop? Because, in essence they came--not undocumented, but 
they were not citizens as they came. They eventually became 
citizens, but they went into the workforce. Was that a negative 
impact?
    Mr. Camarota. This study isn't focused on that. But my 
reading of the historical record is that that immigration, 
including when my family came to America, absolutely did 
adversely affect American workers at that time. Specifically 
what happens, if you look at the history, is that it is only 
with the cessation of the European immigration from World War 
I, 1914, and then also the restrictive legislations of the 
1920's, that then you get the great migration of African-
Americans out of the south and they begin to take industrial 
jobs, and that has enormous implications for the social 
mobility of that group.
    So I would say that that immigration--including when my 
family came--came at the expense of unskilled workers in the 
United States, especially African-Americans, absolutely. That 
was an inevitable consequence of dramatically altering the 
supply of labor then, and I think we are seeing some very 
similar patterns today.
    Ms. Jackson Lee. Well, I might concede that there were jobs 
being created in the north, but I would say that that migration 
was complimented--or that may be too nice a word--was motivated 
by the increase of Jim Crowism and Klanism in the south to move 
people--out of survival, to leave the south to be able to 
survive.
    But I do want to ask you to clear up one other point as 
well. You called--in the course of the English language 
sometimes--you cited work as being uncivilized, and I just 
wanted to make sure that you got a chance to--you said they 
would be able to go into civilized kinds of work. Are you 
trying to suggest that the agricultural industry creates 
uncivilized kinds of work? And would you comment on the fact 
that the agricultural industry's utilization of certain types 
of population also generates into the food costs that we 
experience here in the United States, which most Americans have 
become accustomed to?
    Mr. Camarota. What I meant to say, so that you will 
understand, is that jobs in agriculture often are constructed 
in such a way that the worker has to work very long hours in 
very difficult conditions. You know, the living conditions are 
poor; there is one toilet for 30 people. It is not supposed to 
be that way, but that happens, partly because you have added so 
many workers to the supply of labor that it makes it easier for 
employers to get away with that.
    Now, in terms of price, this actually has been studied 
quite a bit, and the fact is that the price of labor in 
agriculture has very little to do with the price of produce----
    Ms. Jackson Lee. Thank you very much. Thank you for 
clearing that up.
    Let me go to Mr. Holzer.
    Mr. Holzer, does that equate, and particularly on the issue 
of the agricultural question of poor job conditions, which in 
this Committee we have tried to work on in a bipartisan 
manner--I offered legislation that deals with 
institutionalizing housing and health benefits. Certainly, that 
is a challenge, but how do you respond to Mr. Camarota, that in 
fact it is uncivilized or it is not good working conditions, so 
that is why we throw that population over there, and if you 
gave housing or health care, you would see throngs of Americans 
running over into the fields to provide assistance to the 
agriculture industry?
    Mr. Holzer. I think that is unlikely, that the supply of 
labor----
    Ms. Jackson Lee. You are not critiquing him by suggesting 
that we shouldn't make better work conditions in the farm area.
    Mr. Holzer. I completely support legislation to improve 
working conditions, simply out of issues of fairness for those 
who work in that area.
    Part of the reason that wages have declined for less 
educated Americans has to do with the fact that we have 
weakened the institutions that traditionally protect those 
workers, everything from minimum wage laws to collective 
bargaining and other institutions as well, and I believe those 
institutions should be strengthened. Nevertheless, having said 
that, I don't think that the supply of domestically born labor 
to that industry would be very responsive. It would take very, 
very large wage increases over a long period of time to start 
changing those patterns; I simply don't see that happening any 
time in the short term. If you were to cut off the supply of 
immigrant labor to that industry, there would be impact on 
costs certainly in the short run and on the ability of those 
firms to compete; it would not be very positive. And I don't 
think it would be a very attainable solution.
    So, yes, I think, out of fairness, those conditions should 
be raised, but that should be done separately from cutting off 
the supply of available labor; I don't think Americans will 
want to take them.
    Ms. Jackson Lee. Just for a moment, Mr. Chairman.
    Do you know of any data where the agricultural industry has 
reached out to American workers? I mean, you are saying you 
don't think they would come. Do you think it is because we have 
not tried to recruit them, or do you have any kind of data or 
recent studies that you have looked at that says that they are 
just not moving in that direction, they just don't get the 
youngsters--whether they live in rural or suburbia America--to 
say, I think I want to go out to California and work in the 
farm industry?
    Mr. Holzer. I personally haven't seen any formal study of 
the supply of labor to that sector. It just runs counter to my 
sense of these broad trends in labor markets where workers, and 
especially young people, look for future opportunities, and 
they look toward the sectors that are more dynamic, most parts 
of the service sector, the higher end of manufacturing, 
construction, et cetera. And I think the image of agriculture 
in the eyes of the vast majority of Americans is of a sector 
that was important in the past, not in the future. And I don't 
think very many young people today are looking there for their 
future employment opportunities.
    Ms. Jackson Lee. Thank you, Mr. Chairman.
    Mr. Hostettler. The Chairman now recognizes the gentleman 
from Iowa, Mr. King, for 5 minutes.
    Mr. King. Thank you, Mr. Chairman.
    I have a pile full of notes here from the conversation that 
has been very interesting. And many of them I would like to 
comment on, but first, I would like to direct a quick question 
to Mr. Camarota, and that would be, have you taken a position 
on if there is such a thing as too much immigration, and if so, 
how much?
    Mr. Camarota. Obviously, there are a lot of things to 
consider. But from the context of this discussion, I think that 
we should look very hard at what its impact is on the poorest 
Americans. And right now, I think, what the available evidence 
suggests, common sense and economic data suggests that it is 
adversely impacting low-income Americans. And therefore, if for 
no other reason, we might argue questions of assimilation, do 
you want to be a nation of 600 million people? All of these 
questions matter. But it appears to me from the context of this 
that the impact on the poor is critical, and the available 
evidence suggests that, right now, it is too much.
    Mr. King. And so would you settle on a number? Because we 
are going to have to set some policy in this Congress, policy 
that produces actually a number, which predicts a number.
    Mr. Camarota. I kind of come down in terms of--enforcement 
in terms of illegal immigration and on legal immigration in 
terms of green cards, more or less where the Jordan Commission 
came down, eliminate the more extraneous categories. The late 
Barbara Jordan, who chaired the commission in the 1990's----
    Mr. King. About 450,000?
    Mr. Camarota. Yes, something like that.
    Mr. King. You have taken a position, and I think it is 
important that all of us who have discussed this issue take a 
position on whether there is such a thing as too much 
immigration, and if so, how much.
    But as I listened to this conversation across here, a 
number of times, I have heard Members make the statement, and 
also witnesses continually before this Subcommittee, that there 
are jobs that Americans won't do, jobs that Americans won't 
take. And of course, there was disagreement on this subject 
matter.
    But I would like to illustrate it this way, and that is, I 
may not be able to hire Bill Gates to mow my lawn every week; I 
would not have enough money to do that. And I don't have enough 
money to hire Bill Clinton to mow my lawn every week, but 
someone does. He would mow it every week if you put enough 
money out there on the table for him. He would cut your grass, 
and it would be good press for him, and you would have a nice-
looking lawn. And so I think, within that context, you can 
understand that Americans will do this work; it is a matter of 
whether the wages and benefits are there. Because people all 
around this world are rational individuals, and they know--
employers know and employees know--that labor is a commodity, 
like corn and beans and oil and gold, and it is in the 
marketplace. And the value of that is established by supply and 
demand. And one of those examples would be, I read a study some 
years ago about Milwaukee, where, as it was referenced, the 
immigration--I think you referenced it, Mr. Camarota--African-
Americans moving up from the South to the North. And there was 
an area of Milwaukee that was 6 blocks by 6 blocks, 36 square 
blocks, without a single adult male that was employed. This was 
about 7 or 8 years ago that I read the study. But they had 
migrated up from the South to take the good brewery jobs in 
Milwaukee. And as the breweries got automated, then those jobs 
disappeared. Those families stayed there. Now, it was a 
rational decision because the benefits to stay there weren't as 
great as the benefits to migrate and learn a new skill; that is 
rational people living in a place.
    But another thing is, labor is portable, and it was 
portable as demonstrated by that example, in the 1930's, when 
they moved forward. And where the jobs are and where the wages 
are and where the benefits are, the people will follow. They 
will make rational decisions.
    I would submit this, is that we have a huge jobs magnet in 
the United States, and it is rational for employers to seek to 
hire illegals for all the reasons that we know, low wages, no 
benefits, no litigation risks, no unemployment claims. And if 
you can hire them cheaper, then why wouldn't you do that if 
there isn't going to be employer sanctions, which at one time, 
it did work in this country, and today there is no will on the 
part of the Administration to enforce them.
    So I have looked at that from this perspective. And I am 
going to direct my question to Mr. Reindl because he is really 
the subject of this, the person I am trying to help; and that 
is, I would like to shut down the current on this 
electromagnet, the jobs magnet that we have, not dramatically, 
not at once, not export 12 million people overnight, but change 
the economic decision in a rational way so we can incrementally 
address this situation that we have.
    So I have drafted a piece of legislation, and I have it 
here with me today, and it is called the Real IDEA Bill, the 
Illegal Deduction Elimination Act. And what it does is it 
removes the Federal deductibilty for wages and benefits that 
are paid to illegals. We have the Instant Check program, as was 
addressed by Mr. Flake a little earlier. That means that an 
employer would be--there is not an excuse any longer for an 
employer to, knowingly at least, hire an illegal, at least as 
far as their information in front of them is concerned. So we 
give them a safe harbor, if they use the Instant Check program, 
but then a 6-year statute of limitation, so the IRS can come 
in, do the audit, and if they paid say $10 million out to 
illegals, those that are on the books, then the IRS can levy 
penalty, interest and then the back tax liability that would 
come to, on that $10 million, roughly $5 million to $6 million 
dollars out of the $10 million.
    Mr. Reindl, would you speak to whether that would help your 
business?
    Mr. Reindl. I think it would, as long as there is 
enforcement. If you pass another piece of legislation through 
and the law-abiding businesses are going to be forced to do 
another extra burden on them, you are not going to stop the 
guys hiring illegal aliens because they don't want to do any 
paperwork. So I think there should be a piece of legislation 
that goes after these guys that are just breaking every law. If 
they are going to hire an illegal alien, they are not going to 
do any paperwork. So really, that is my point.
    And you know, they are saying Americans don't want to do 
the jobs. I mean, pay me $50 an hour and I will go and pick 
apples all day long, I don't have a problem with that.
    One of the reasons why I have been able to stay in business 
was because we are one of the most high-tech shops on Long 
Island. We have implemented machines. As Mr. Camarota was 
saying before, that is important. That is the only way I 
survived in the last 10, 15 years. That is really the key. Yet 
you have to increase technology. It is supply and demand. If 
there's a limited number of people, you have to pay them more. 
When I am real busy, when the shop is real busy, I will hire 
someone for a while. I will pay them anything they want just to 
get the work out. That is the way it is.
    So I think that the main problem is the enforcement of the 
law, and there is just none.
    Mr. King. Thank you, Mr. Reindl.
    I yield back.
    Mr. Hostettler. The Chair will now recognize the gentlelady 
from California, Ms. Waters, for 5 minutes.
    Ms. Waters. Thank you very much.
    Gentlemen, there has been very little discussion about job 
training in America, which I think is extremely important to 
helping natives be prepared for jobs and to get jobs. I am 
particularly focused on two things. I would like to ask if any 
of you have ever heard about a project where inmates were doing 
reservations for an airline a few years ago, have any of you 
ever heard about that, where inmates were doing--I think it was 
airline reservations? Have any of you heard about any of the 
jobs that were being done by inmates with new technology?
    Mr. Camarota. Customer service jobs, yes, I have heard of 
that, sure.
    Ms. Waters. Do you know that the same inmates who perform 
some of these jobs while they are incarcerated cannot get those 
jobs when they get out of prison? Are you aware of that?
    Mr. Harrington. Excuse me, ma'am. If you would like, I 
recently spent some time out at the Youth Opportunity Movement 
program out in Los Angeles, and one of the major problems they 
have for particularly young men coming out of the camps, who go 
through some training programs, is access to employment after 
completing the training is very limited because they have 
felony records, and employers are very unlikely to hire them in 
many industries, including construction and manufacturing.
    Ms. Waters. Well, that is part of it. And I suppose what I 
am trying to bring to everybody's attention is--and I wish I 
had an exact description of the reservations project that was 
being handled by inmates--to point out that if they can do the 
job while they are incarcerated, they can certainly do it when 
they get out. And I think we have to find a way by which to 
open up job opportunities for people who serve their time. I 
think there are ways to do that. And I think that when we look 
at whether or not Americans are available for certain jobs, 
this is one area that must be looked at.
    The other is job training. Nursing, I think it is 
absolutely unconscionable that we think that the only way that 
we can get nurses is to import them from other places. First of 
all, we have not given enough support to the training and 
development of RNs or LPNs in this society. We have RN programs 
in community colleges with little support for people who are 
trying to be trained. Many of these jobs could be accessed by 
single-parent families, but they need child care support. They 
need transportation support. There are some programs, such as 
one in San Antonio, that is giving a lot of support to train 
RNs, and they have been successful at it.
    I am very much interested in job training for Americans, 
for natives, for all these young people that you are talking 
about. I don't mind competition, and I don't mind the young 
people competing with legal immigrants, but I do mind those 
industries, such as Wal-Mart and some of the others, who hire 
undocumented--to hire them where they are denying opportunities 
for natives to have those jobs. And I think we have to just own 
up to this stuff. I mean, basically, without even any empirical 
data, we basically understand and know what is going on, and I 
think there are honorable ways by which to address all of these 
problems. And so I would like to see some information about job 
training for natives factored into this discussion.
    Have you given any thought to this, Mr.--I can't see your 
name from here.
    Mr. Holzer. Yes, I have. And I would agree with you that it 
is not an either/or proposition----
    Ms. Waters. That is right.
    Mr. Holzer. And in fact, certainly during the late 1990's 
when I was at the Labor Department, we were using the moneys 
generated by H-1(b) visas. We were taking that money directly 
and using it to finance education and training opportunities 
for Native born workers in many of the same areas in which 
shortages occur which to me seemed a much more sensible way to 
address this issue than to simply cut off immigration and 
pretend--we are talking about leveling the playing field and 
allowing American workers both the skills and the incentives to 
compete with those foreign workers. And I think we can do 
vastly more of that.
    There are many job training programs that are cost-
effective, that have positive impacts, the Job Corps, the 
Career Academies. We know the Pell grants are a successful way 
of opening the doors to higher education to many of the same 
fields you mentioned, like nursing, LPNs, RNs, et cetera. 
Funding for Pell grants has not kept up anywhere near the 
potential demand for those among people who could use them. So 
I support your notion, and certainly, we should be investing a 
lot more than we are investing----
    Ms. Waters. What do you think about tax credits for some of 
the industries that are job intensive, tax credits that really 
work for them? Because I really do believe that, to the degree 
that you are able to train, particularly unskilled workers, in 
the workplace, in the situation where they would be working, 
that you are able to get more people who are trained for real 
jobs. What would you think about tax credits for job training 
in order to get more people into the work force who are 
competing or would like to compete for jobs that are being 
given to undocumenteds?
    Mr. Holzer. I support tax credits for training of entry-
level workers. We want to be careful not to create enormous and 
expensive windfalls. We don't want to be subsidizing the 
training that is already occurring, but we can certainly 
identify entry-level workers who get very little of the total 
training that is right now done in the private sector, and I 
think there are many creative ways in which we could give tax 
credits as we do for R&D spending. We could have tax credits to 
subsidize new training in those sectors that would likely be of 
limited expense and cost-effective as well.
    Mr. Hostettler. The gentlelady's time has expired.
    Ms. Waters. Thank you very much.
    Ms. Jackson Lee. I would ask that the gentlelady have an 
additional 30 seconds because I would ask her to yield to me 
for just a few minutes, and then I am going to yield back.
    Ms. Waters. Yes, unanimous consent for 30 seconds, and I 
yield to the gentlelady from Texas.
    Mr. Hostettler. No objection.
    Ms. Jackson Lee. I thank the Chairman. I thank the 
gentlelady from California. I wanted to just build on her 
comment.
    I think you need to write immigration legislation, which we 
have just written, that utilizes dollars for job training and 
make it work, and speak to the gentlelady's point about 
creating opportunities for jobs, whether it is Wal-Mart or 
elsewhere, which we failed to do. I know the Chairman says this 
is an Immigration Committee, and it is, but part of the issue 
is, what do we do about Americans not having jobs, and how do 
immigrants affect the economy?
    Mr. Chairman, I think this has been an excellent hearing 
because we have heard perspectives on both sides of the aisle 
that happen to agree with each other, that immigration may not 
be the sole issue of why we have a receding economy and not a 
growing economy. It may be trade. It may be minimum wage. It 
may be work conditions, but particularly, we need to find ways 
to provide access to legalization, Mr. Chairman, and as well, 
we need to find ways to employ Americans, to help Mr. Reindl, 
to enforce employer sanctions, but to not stigmatize the new 
force of the workforce of the 21st century. It can work, I 
think, harmoniously with working Americans, including those in 
the minority population and the youth population.
    Ms. Waters. Will the gentlelady yield back so that I can 
get the question in to the gentleman from California?
    Ms. Jackson Lee. I will yield to the gentlelady. I thank 
the Chairman.
    Mr. Hostettler. Yes, the time has expired.
    The Chair now recognizes the gentleman from California for 
5 minutes for questions.
    Mr. Lungren. Thank you very much, Mr. Chairman.
    Mr. Reindl, your statement is an eloquent statement of 
frustration. Are you aware of specific direct competitors you 
have that knowingly hire illegal aliens and thereby have a 
competitive advantage over you?
    Mr. Reindl. Well, I would say--when I put a help wanted ad 
in the paper, I would say 90 percent of the people applying are 
immigrants. Half of them turn out to be illegal aliens. In my 
interview process, though, I ask, well, what other factories 
have you worked in, and a lot of them have worked in factories 
around my location. And they admit to being illegal aliens. So 
they are working in other factories.
    Mr. Lungren. You obviously have conversations with some of 
your competitors, don't you? I mean, not collusive 
conversations, but conversations about what is going on?
    Mr. Reindl. Once in a while, if I run into them, not too 
often.
    Mr. Lungren. Do you ever talk about difficulty in hiring 
employees?
    Mr. Reindl. It is a problem.
    Mr. Lungren. No, no. Do you ever talk to them about it?
    Mr. Reindl. Yes.
    Mr. Lungren. What do they say? Why do they hire who they 
hire?
    Mr. Reindl. Well, no one has admitted to hiring--they 
always say it is hard to find people to work.
    Mr. Lungren. Right.
    Mr. Reindl. And I believe that the problem is our product 
price has been depressed so much that we can't pay the 
salaries, and that is the problem.
    Mr. Lungren. You are talking about the employment base that 
you see now when you interview people. A large number--90 
percent--you say appear to be foreign born. A huge percentage 
of that is illegal. Is that different than what you saw 5 years 
ago, 10 years ago?
    Mr. Reindl. Yes, 10, 15 years ago, I would say 50 percent 
were immigrants, and the rest were Native born Americans.
    Mr. Lungren. So it is an accelerated situation, as you see 
it?
    Mr. Reindl. Yes, and by the way, my wage increase has not 
increased that much in those 10 to 15 years.
    Mr. Lungren. Dr. Camarota, you have talked about the impact 
of immigration and illegal immigration here. Would you support 
an effort to enforce the law that would include expelling 
people from this country who are here illegally in large 
numbers?
    Mr. Camarota. As I indicated, the way I think we should 
think about this is attrition through enforcement. If we began 
making sure that it was much more difficult for illegal aliens 
to get jobs, get drivers licenses, open bank accounts, access 
public benefits, if it is more difficult to cross the border, 
if it is more difficult for people to overstay a temporary 
visa, I think what we would naturally see is a significant 
increase in outmigration of illegal aliens. As I indicated, 
about a half a million people leave the illegal alien 
population each year, 400,000 to 500,000. They either go home 
on their own, get deported or get green cards. We could 
significantly increase that number with enforcement, and if we 
reduce the number coming in, then the problem takes care of 
itself over time. But we would obviously need to deport more 
people than we are doing now.
    Mr. Lungren. What numbers are you talking about? What 
numbers would you be talking about, that you could foresee that 
we would be deporting?
    Mr. Camarota. I think the key thing would be that, when we 
come across someone who is illegal in the normal course of law 
enforcement and other activities, then when that person comes 
to the attention of authorities, then that person is made to 
leave, and that would convey the sense that the immigration 
law--I would imagine that--I would certainly, maybe double or 
50 percent more than we are deporting now, but our main focus 
would be on denying all the benefits and accessing all the 
things that illegals can easily do now.
    Mr. Lungren. Would it make any difference whether someone 
has been here 1 year, 2 years, 5 years, 10 years?
    Mr. Camarota. In terms of--you can look at that two ways. 
The person who just got here hasn't been breaking the law that 
long, whereas the person who has been here 10 years is quite 
the accomplished law breaker; he has been here longer, so you 
might want to think about whether you want to reward him.
    I guess my position on this is simply, you want to begin by 
enforcing the law. If, at some point after you get a handle on 
the situation, you want to legalize the illegal aliens, I can 
think about that, some percentage who are still here, but it 
seems to me you have got to start with the unequivocal 
enforcement of the law.
    Mr. Lungren. Dr. Harrington, what would you say about an 
effort by the Federal Government to actually enforce the law, 
not only with employer sanctions, but also expelling large 
numbers of people who are here illegally?
    Mr. Harrington. I think employer sanctions are a very 
important component of law enforcement, not unlike what 
Congresswoman Waters suggested, that we are allowing a 
deterioration in American labor market institutions, I think it 
is quite undesirable. And by enforcing a variety of Federal, 
State and local employer/employee relationship laws, including 
the Social Security Act, Fair Labor Standards Act, occupational 
safety and health laws, I think that would diminish some of the 
incentives for some of the foreign immigration undocumented 
workers entering the United States and working under the 
circumstances which they have, I think that alone could go a 
long way toward adjusting----
    Mr. Lungren. What do we do with those that are here?
    Mr. Harrington. Well, sir, I think, number one, the first 
thing you do is enforce the laws on the books. That is, if 
someone is working illegally in a manufacturing plant, that the 
law be enforced against that employer.
    Mr. Lungren. But what do you do with respect to the 
employees? See, it is very easy for us to talk about what we 
are going to do generally, but when you get down to saying we 
are going to expel these individual people who have been here, 
who live down the street from you, go to church with you, you 
may see, I think, that you might get a little different 
reaction.
    Mr. Harrington. There is absolutely a fairness issue.
    Mr. Lungren. I am frustrated because I hear a lot of people 
talking about what they want to do, but I want to know what we 
are going to do. So my question to you is, would you support--
would you foresee us expelling large numbers of illegal aliens 
who have been working in this country and been here for some 
period of time? That is the only question.
    Mr. Harrington. I guess part of my answer to that is that, 
as we enforce the wage and hour laws in the country, that the 
ability of the individuals--because, remember, a lot of the 
illegal immigration we have is labor-market development--so as 
a consequence, what that means is that your ability to go ahead 
and engage in that kind of work activity just diminishes as we 
straighten out the bottom of the labor market.
    The second part of this is that I would expect people to 
leave the country voluntarily and, in some, deportation. The 
magnitude of that I don't know, and I am not expert enough to 
say.
    Mr. Lungren. Mr. Holzer?
    Mr. Holzer. I also believe in strongly enforcing existing 
wage and hour laws, but I would be reluctant to directly answer 
your question. I would be reluctant to deport large numbers of 
immigrants who have been--they have families in many cases, 
children who have gone to school. And the disruption that would 
be caused by deporting large numbers I would have some trouble 
with. And in many industries where those workers have worked 
for many years, have generated some good work experience and 
some good work qualifications and performance, I would be 
reluctant to punish them as well by deporting them in large 
numbers.
    Mr. Lungren. See, I appreciate your answers because I am 
trying to focus us and force us to actually look at what we 
would be able to do--what we as a generous country would be 
willing to do. Because if I am here 20 years from now having 
the same conversation and we have an accelerated problem, I am 
not going to be very happy about it. And I just hear a lot of 
talk about the problem and a lot of talk in general terms about 
what we should do. We have got to come down to the nitty-gritty 
of what we can do, will do and what the American people will 
support, as well as what we think is fair within our concept of 
being humane. And I don't mean to get away from the fact that 
people broke the law, but I am talking about what we can 
actually do as a country, as opposed to what we can talk about 
but never come together in a consensus to in creating 
legislation and enforceable programs.
    I thought we created something with employer sanctions in 
1987, I really did. And it has been my lament ever since that 
we never enforced it. The question now is, how do we pick up 
from where we are now and have a rational program that does 
what America needs to do--that is what we ought to look to 
first--but treats people as fairly as we can in the process. 
Thank you.
    Mr. Hostettler. I thank the gentleman.
    Without objection, the gentlelady from California has one 
question to ask, and then we will conclude with that.
    Ms. Waters. Thank you very much, Mr. Chairman.
    I think that there have been some good suggestions about 
what to do about employers and what to do about securing the 
border, but I have real problems with gross deportation because 
I do not think you can split up families. And I think that my 
colleague on the opposite side of the aisle has been trying to 
get to that. What do you do with a father who is illegal, a 
wife who is legal and two children who are legal? You get that 
father; he is apprehended. Are you going to deport him and 
leave the mother and children without the wage earner? Those 
are real problems. And I have problems with that.
    I am supportive of all the other stuff that we have talked 
about that I think makes good sense in terms of how you begin 
to stem the tide, but what do you do with this deportation? I 
am for deportation of criminals, that I am for, you commit a 
crime, you get kicked out of here, but I am not for wage 
factories where wage earners who are illegal are deported and 
split from their families. How do you handle that?
    Mr. Camarota. Would you like me to--well, there are 
actually a lot of illegal aliens with U.S.-born children. And 
if we began to enforce the law, obviously, a lot of those 
people would go home. Now the children would continue to enjoy 
U.S. Citizenship under current law, so if those children 
choose, they can come back to the United States; that would be 
their choice as American citizens when they reach adulthood. 
But the fact that there are children doesn't mean that you 
can't enforce the law. We incarcerate parents all the time in 
the United States, and that is a hardship on those children----
    Ms. Waters. What about the legal wife?
    Mr. Camarota. Well, in general, because U.S. Citizens can 
always sponsor their spouse, not subject to any per-country 
limit, there are relatively few illegal aliens married to--
well, there are virtually no illegal aliens married to 
citizens, but there are some illegal aliens married to LPRs who 
haven't yet become citizens. Now that is a more difficult 
circumstance. But most of the demographic analysis shows that 
the bigger problem--and the thing I think you are most 
concerned about--is that you have U.S. Citizen children; that 
is a very common circumstance. The circumstance where you have 
an illegal alien married to an LPR is a small fraction of 
illegal aliens----
    Ms. Waters. What do you do about the children who are now 
in high school, two kids, ready to graduate?
    Mr. Camarota. And the children are U.S. Citizens, or they 
are illegal aliens?
    Ms. Waters. They are U.S. Citizens.
    Mr. Camarota. Well, that would mean that the illegal alien 
had been here for roughly 18 years, and the demographic 
analysis shows, again, that there are--because if the illegal 
alien parent came and then had a child subsequent to that, and 
then that child reached all the way to 18 years of age, then 
the person--we have relatively few people like that. But what 
we do have a lot of is people who came as children as illegal 
aliens themselves and have really been here for, say, 8, 9 
years and have socialized in the United States; that now that 
is a much more common circumstance.
    Most analyses suggest that maybe 15 percent of the illegal 
alien population, or 10 percent or less, have been here for 
more than 20 years. Actually, most people think it is more like 
7 to 8 percent have been here for that long. So there are very 
few people who have children who have gone all the way to 
adulthood, but there are millions with children, and they do 
represent a challenge in terms of enforcement, but I would 
submit, living in a foreign country is not necessarily a 
hardship, and those children----
    Ms. Waters. So you would deport them, you would deport that 
family?
    Mr. Camarota. Well, as I said, if you begin to enforce the 
law, lots of people would go home on their own, so it wouldn't 
necessarily involve any formal deportation. Let me give you a 
substantive example. In the case of Pakistan, we think that the 
number of illegal aliens from Pakistan after September 11 fell 
by half, and there was practically no significant increase in 
enforcement. What there was, was an unambiguous conveyance to 
illegal aliens from that country that the immigration law was 
back in business. Now, unfortunately, that was selected 
enforcement----
    Ms. Waters. Bad example. Bad example. Bad example.
    Mr. Camarota. And I have real problems with selective 
enforcement, but if they were across the board, we would see a 
similar kind of situation.
    Ms. Waters. I am sorry, that does not satisfy me, but thank 
you very much.
    Mr. Hostettler. Thank you.
    I want to thank the panel of witnesses for your testimony 
today, for your appearance here; you have been very helpful in 
this process. All Members will have five legislative days to 
add to the record if they have questions of the witnesses. We 
ask that the witnesses answer within three weeks.
    The Subcommittee business being completed, we are 
adjourned.
    [Whereupon, at 12:39 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
Representative in Congress from the State of Texas, and Ranking Member, 
        Subcommittee on Immigration, Border Security, and Claims

    We will be hearing testimony today about two articles on the effect 
that immigrants have had on American workers. One of them was written 
by Steven A. Camarota. It is entitled, ``A Jobless Recovery? Immigrant 
Gains and Native Losses.'' Among other things, this article observes 
that between March of 2000 and March of 2004, the number of adult 
immigrants holding a job increased by more than two million, but the 
number of adult natives holding a job was nearly half a million fewer. 
The article concludes that immigration may have adversely affected the 
job prospects of native-born Americans. The other article reaches very 
similar conclusions. It was written by the Center for Labor Market 
Studies. It is entitled, ``New Foreign Immigrants and the Labor Market 
in the U.S.: The Unprecedented Effects of New Immigration on the Growth 
of the Nation's Labor Force and its Employed Population, 2000 to 
2004.''
    It is important to understand that these articles are using a broad 
definition of the term ``immigrant.'' They include undocumented aliens, 
aliens who are lawfully employed on a temporary basis, aliens who are 
lawful permanent residents, and naturalized citizens. In fact, the 
article written by the Center for Labor Market Studies goes even 
further. In that article, the definition of an ``immigrant'' is an 
individual who was born outside of the 50 states and the District of 
Columbia. Persons born in the U.S. Virgin Islands, Puerto Rico, and 
Guam are counted as being part of the immigrant population.
    Our witness today, Professor Harry J. Holzer, will explain why we 
should question the conclusions in these articles. Dr. Holzer thinks 
that immigration has modest negative effects on less-educated workers 
in the U.S., but it also has positive effects on the economy. He 
expects the positive effects to grow much stronger after Baby Boomers 
retire. Also, according to Dr. Holzer, the employment outcomes of 
native-born Americans mostly reflect the underlying weakness of the 
U.S. labor market, rather than large displacements by new immigrants.
    I agree with Dr. Holzer that immigrants have a positive effect on 
the American economy. They create new jobs by establishing new 
businesses, spending their incomes on American goods and services, 
paying taxes, and raising the productivity of United States businesses.
    The American economy does not have a fixed number of jobs. 
Economists describe the notion that the number of jobs is fixed as the 
``lump of labor'' fallacy. Job opportunities expand with a rising 
population. Since immigrants are both workers and consumers, their 
spending on food, clothing, housing, and other items creates new job 
opportunities.
    Immigrants tend to fill jobs that Americans cannot or will not take 
in sufficient numbers to meet demand, mostly at the high and low ends 
of the skill spectrum. Occupations with the largest growth in absolute 
numbers tend to be the ones that only require short-term, on- the-job 
training. This includes such occupations as waiters and waitresses; 
retail salespersons; cashiers; nursing aides, orderlies and attendants; 
janitors; home health aides; manual laborers; landscaping workers; and 
manual packers.
    The supply of American workers suitable for such work is falling on 
account of an aging workforce and rising education levels. The median 
age of American workers continues to increase as the Baby Boomers near 
retirement age.
    Some people are concerned that undocumented workers lower wages for 
American workers. This is a legitimate, though probably exaggerated 
concern, but it is not the mere presence of undocumented workers that 
has led to low wages. The problem is the lack of bargaining power that 
these workers have against their employers. No worker chooses to be 
paid low wages or to work under poor conditions. The wage depression is 
attributable to the ability of employers to exploit this foreign 
workforce. Underpaying foreign workers is only one of the methods used 
by employers to cut labor costs. Temporary and part-time workers are 
employed without worker benefits and the labor laws are violated 
routinely. The solution to this and many other immigration-related 
problems in our country is comprehensive immigration reform. Thank you.

                                 
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