America’s immigration debate often focuses on how immigrants affect the welfare state, even though many immigration restrictionists would oppose immigration even if we did wall off the welfare state for new immigrants. “It’s logical that if you bring in a massive supply of low-wage workers, you’re going to pull the workers down,” said Sen. Jeff Sessions, R-Ala., recently. But history contradicts this notion. Immigration pushes wages for U.S. workers up, not down.
America’s first Secretary of Treasury Alexander Hamilton would not have agreed with Sen. Sessions. He thought immigrants pushed Americans up, not out, of the labor market. “Foreign emigrants… exhibit a large proportion of ingenious and valuable workmen, in different arts and trades, who, by expatriating from Europe, have improved their own condition, and added to the industry and wealth of the United States,” Hamilton said in 1790. He found “the use of immigrants will leave Americans free to engage in more dignified pursuits.”
History proved Hamilton correct. Historian Aristide Zolberg notes in his recent treatise on the history of American immigration that by the turn of the 20th century, manufacturing’s “skilled upper component consisted largely of natives or ‘old’ immigrants, whereas the lower semiskilled and unskilled one was filled by newcomers,” and that “recent research has confirmed contemporaneous reports of an overall increase of real wages in manufacturing.” In other words, by taking lower-skilled jobs, immigrants created better opportunities for Americans elsewhere in the economy, as predicted by Hamilton and by Say’s Law.
From 1890 to 1914, more than 15 million people poured into the United States, mostly from Europe. More than 1.3 million came in 1907 alone. That would be like 4 million coming in one year today–which would be four times the number allowed in legally last year. Despite this enormous increase in the workforce, worker compensation rose 40 percent over that era. Overall, America’s fastest period of economic growth was during the time of mass immigration (4.17 percent annually). By the end of the period, Henry Ford was paying automobile assembly line workers the highest wages in the world, despite the immigration flood, or as Say’s Law indicates, partly because of it.