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November 10, 2005
“Skills Shortage”—Or Immigration Overreach?
From
Gates to
Greenspan, business leaders say a mismatch between
the skills of American workers and the needs of
employers puts our ability to compete internationally at
risk. And the growing U.S. income inequality is often
blamed on this
shortage of skilled workers and
a glut of incompetents.
But University of
Wisconsin sociologist Michael J. Handel begs to
disagree. In his new book
Worker Skills and Job Requirements: Is There a Mismatch?,
he offers proof that American workers are as competent
as those in other advanced nations.
Native-born Americans are, that is.
The apparent relative weakness in
U.S. average cognitive skills vanishes when the effects
of immigration are netted out. Handel points to the
International Adult Literacy Survey (IALS), a test
administered to working-age adults in 14 advanced
industrialized countries between 1994 and 1998. The U.S.
ranked 10th place overall, but our poorest
performers (5th percentile) were
dead last and our
best performers (95th percentile) were 3rd
highest. [Table 1.]
The U.S. gap between top and bottom was the widest of
all the countries surveyed.
Hendel cites studies showing this
result is primarily the result of mass immigration. For
example:
 | “Blau and Kahn…find that
immigration accounts for a considerable portion of
the greater test score inequality in the United
States relative to eight other countries…When
immigrants are excluded from the samples, the
difference between test score inequality in the
United States and other countries disappears
completely for women and shrinks by 55 percent for
men. [Francine D. Blau and Lawrence M. Kahn,
“Do Cognitive Test Scores Explain Higher U.S.
Wage Inequality?” National Bureau of
Economic Research, Working Paper 8210, 2001.] |
| “….when Devroye and
Freeman….exclude immigration from samples for the
United States, Germany, the Netherlands and Sweden,
they find differences in test score inequality
between the United States and the other countries
declines by approximately 40 percent...” [Daniel
Devroye and Richard B. Freeman,
“Does Inequality in Skills Explain Inequality in
Earnings Across Advanced Countries?”,
National Bureau of Economic Research, Working Paper
8140, 2001.] |
Three points spring out from
Hendel’s research.
| The skills of U.S. immigrants
are
decidedly inferior to those of immigrants and
native-born in other countries. This is quantified
in another analysis of the IALS test scores:
[Table 2].
U.S. immigrants scored 210, or 16 points less than
the average of immigrants in other high-income
countries. U.S. native born scored 284, or 8 points
above the average of native-born in other high
income countries. |
| Third, the presence of
unskilled immigrants does enable U.S. employers
to pay native-born workers less than their skill
levels would otherwise warrant. We can infer this,
for example, from the Devroye-Freeman paper, because
the dispersion of skills among the native-born is
less than the dispersion of skills among immigrants,
but the inequality of income is the same. |
Curiously, Handel’s publisher, the
Economic Policy Institute, is a liberal operation
that specializes in blanket defenses of (unionized)
labor while doing its
politically-correct best to ignore immigration’s
impact.
Does EPI realize the implications
of Hendel’s work? (Ask
them.) Does he? (Ask
him.)
Edwin S. Rubenstein (email
him) is President of
ESR Research Economic Consultants in Indianapolis. |
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