U.S. immigrant unemployment is at record lows — and that's a great sign for the economy

This image was removed due to legal reasons.

The unemployment rate for foreign born workers hit a record low in May, according to Bureau of Labor Statistics data released Friday—and despite what you may have heard from the likes of Donald Trump, the average American is benefiting.

The main reason that the rate has plunged so much is because of the current overall strength of the U.S. labor market. The unemployment rate for all workers is at its lowest level since July 2007, and is among the lowest in the developed world.

But immigrants usually have a lower unemployment rate than native-born workers, as can be seen in the BLS chart below. In May, the rate stood at 3.7% — a full percentage point below the overall unemployment rate of 4.7%.

This image was removed due to legal reasons.

There are several theories about why immigrants are so consistently employed at a higher rate. In an email, Professor Giovanni Peri of the University of California-Davis said that immigrants are arguably more motivated to find jobs, since that's why most came to the country in the first place.

Because immigrants are more aggressive at finding jobs, they are benefitting from an economy that has been creating hundreds of thousands of jobs for the last few years.

"The economy is creating many jobs and immigrants who have high employment rates in general are taking them," Peri told me.


Kurt Mitman, a professor at Stockholm University who studies unemployment, has also argued that many native workers may not face the same kinds of pressures foreign workers to do to find jobs when they don’t have them

“Imagine someone comes to the U.S. for college,” he told me in an email last year. “Once they graduate they have six months to find a job, or have to return to their home country because the student visa expires. The same thing happens when someone comes to the U.S. on a work visa, he said.


Even if immigrants may jump more quickly to find work, this doesn't necessarily mean that they are taking jobs away from native-born workers. Their presence in the economy helps reduce the skills shortage, reflected by fewer unfilled job openings, Peri said, creating opportunities for complementary workers.

"The more they are employed, the more they contribute," Peri said.

Peri has previously written about this theory, known as "complementarity." In a 2010 paper published by the San Francisco Federal Reserve, he laid out the following scenario to illustrate the concept: As young immigrants with limited education take manually intensive construction jobs, the construction companies that employ them are able to expand. This increases the demand for construction supervisors, coordinators, designers, etc.—occupations that require greater English communication skills and are typically staffed by U.S.-born workers who have moved away from manual construction jobs.


This pattern, Peri wrote, "Typically pushes U.S.-born workers toward better-paying jobs, enhances the efficiency of production, and creates jobs."

The newly released data could also help rebuff certain anti-immigrant themes that have popped up in the 2016 presidential campaign.


Among his many insults hurled at immigrants, Donald Trump has accused them of hurting the economy.

"The influx of foreign workers holds down salaries, keeps unemployment high, and makes it difficult for poor and working class Americans—including immigrants themselves and their children—to earn a middle class wage," he says on his website.


But the data appears to show little evidence that foreign-born unemployment has any impact on the native-born rate. And in a survey of approximately 50 economists of all political beliefs in 2013, the University of Chicago found a consensus that the average U.S. citizen would be better off if a larger number of low-skilled foreign workers were legally allowed to enter the U.S. each year.

Economists were more divided on how an influx of low-skilled immigrants would impact low-skilled native workers—with some saying that U.S.-born workers would be hurt by it and others saying that any impact would be limited.


But it is unquestionable that immigrants, far from having a harmful effect on the U.S. economy, continue to help make it among the healthiest in the world.

Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.

Share This Story

Get our newsletter