Washington, D.C. (May 4, 2022) – The U.S. Chamber of Commerce and other lobbying groups have called for increases in immigration to reduce wages and control inflation. A new analysis by the Center for Immigration Studies estimates that even substantially reducing wages for all less-educated workers, or in the occupations where they are concentrated, would have a negligible impact on consumer prices because such workers account for only a modest share of the GDP.

“It is simply not possible to control inflation by reducing the wages of the less-educated because such workers earn so little to begin with,” said the report’s lead author, CIS Director of Research Steven Camarota. “Bringing in more foreign workers to lower the wages of workers who don’t earn much in the first place also seems grossly unfair.”

Among the findings:

• Reflecting their relatively modest average compensation, all less-educated workers (those without a bachelor’s degree) account for only 25 percent of GDP. More-educated workers and capital account for the other 75 percent of the economy.
• Therefore, even a substantial reduction of 10 percent in the wages of all less-educated workers would likely reduce consumer prices by only an estimated 2.5 percent, assuming all of the savings were passed on to consumers and not retained as higher profits by businesses.
• It may be possible to reduce wages more by dramatically increasing the number of foreign workers in a few specific sectors of the economy. But individual lower-paid occupations account for only a tiny share of GDP. For example, construction workers are only 2.2 percent of GDP, cleaning and maintenance 1 percent, food service only 1.1 percent, and healthcare support just 0.9 percent.
• Prior to Covid-19, workers have generally seen their wages decline or grow very little for more than two decades, particularly those without a bachelor’s degree. Reducing their wages by admitting more immigrants can be seen as unfair and unwise.
• More than one in seven less-educated workers are currently eligible to receive cash payments from the Earned Income Tax Credit and Additional Child Tax Credit, the nation’s largest cash assistance programs for low-wage workers. Reducing the wages of such workers would undo efforts to help low-income workers.
• Nearly two-thirds of all children in poverty are dependent on a worker who does not have a bachelor’s degree. Using immigration to reduce wages for less-educated workers has significant negative implications for American’s poorest children.