The Football Stadium Economy

 

By Christopher Stiffler

As week one of the NFL season begins, the hype surrounding the Broncos opening match up with the Pittsburgh Steelers on Sunday Night Football continues to build.  Bronco and Steeler fans have substantially bid up the price of tickets.  With a limited amount of seats available in Sports Authority Field at Mile High, every Steeler fan who purchases a ticket for opening day directly translates into one less available ticket for a Broncos fan.  It makes sense to reason that if we remove all the Steeler fans from the crowd, more seats will be available for the blue and orange faithful.  

We often witness the same type of reasoning in the immigration debate.  If all undocumented immigrants are removed from the job market, it creates more availability for American citizens to fill those jobs.  Those who advocate removing undocumented immigrants so more Coloradans can find work, tend to view the economy as a sports arena that has a limited number of seats.  They also often display the same hostility toward undocumented workers as they display to Steeler fans taking their seats. 

However, unlike Steeler fans at Mile High, whose presence directly means fewer Bronco fans at the game, allowing immigrants into the Colorado economy does not mean fewer jobs for Colorado citizens.  In fact, it often means more.  A football stadium has a limited number of seats, whereas the economy is dynamic.  It expands and contracts; sometimes it needs fewer jobs sometimes it needs more.  There is not a fixed number of jobs in the state of Colorado, which is the part that the anti-immigration advocates tend to forget.  Undocumented immigrants’ unique labor market skills enable the economy to be more productive.  In addition, undocumented immigrants’ spending adds to aggregate demand. 

Once we get past the rhetoric and look at the reality of the modern economy, we can see the positive impact immigrants have on our economy.  This is because immigrants are often a complement to existing labor and not a direct substitute.  Immigration encourages the specialization of non-immigrant workers.  Undocumented labor encourages other, less-educated workers to leave physically intensive occupations for jobs that require language skills.  Productivity gains arise from specialization along with higher compensation paid for communication skills. 

Though it is not initially intuitive, rising education levels of the non-immigrant adult population have corresponded with increased immigration.  This is because immigrants have occupied many low-income jobs which move the non-immigrants into middle-income jobs.  Many economists agree that the key to a thriving and developing economy is constantly increasing productivity.  This means workers making the most of their individual skills.  If you accept the notion that our economy works well when everyone is maximizing their unique skills, then you must acknowledge that immigration has a positive impact on our economy.   

It is largely acknowledged that the immigration system in America has some major faults as a majority of Americans believe that Congress needs to reform immigration policy.  But while there has been very little improvement to immigration policy on the federal level, local and state governments face an increasing burden of finding, arresting, and detaining undocumented immigrants. 

While focusing only on enforcement strategies that involve deportation and strict immigration requirements, policy makers must be aware of the potential economic fallout from the disruptions, dislocations, and disturbances as immigrants’ absences ripple through the economy.  Removing undocumented workers won’t free up jobs for other workers, instead it will remove a complementary piece of the labor force that allows our economy to be dynamic. 

When Steeler fans are sprinkled around Mile High Stadium, it creates a louder, more energetic environment because Broncos fans are spurred to cheer longer and louder to drown out the Steeler cheers.  Our labor force functions the same way.  Undocumented immigrants in our labor force create a more vitalized, productive labor force for everyone. 

Christopher Stiffler is a Pennsylvania native turned Coloradan, and unfortunately, a lifelong Steelers fan. 

The role of undocumented immigrant workers in Colorado's economy, our fourth-most popular research of 2011

The effects of undocumented immigrant workers on Colorado's economy were again a hot topic in 2011, generating the fourth-highest number of visits to our website among the Colorado Center on Law and Policy's research products during the past year. Here's how the paper starts off:

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Undocumented immigrant workers in Colorado play an important role in the state's economy
The number of undocumented immigrants in Colorado has increased enormously during the past 20 years. While that number has gone down since mid-decade, the issue of undocumented immigration continues to be controversial, as Colorado struggles with the effects of the worst recession since the Great Depression and the budget woes that have followed.


In that debate, some argue undocumented immigrants cost Colorado by taking jobs and enrolling in state programs. This analysis shows, however, that far from being an economic drain, undocumented immigrants who live and work in Colorado contribute significantly to the state’s economy.

For every job in the state occupied by an undocumented immigrant, another 0.8 jobs are created. And for every dollar of wages an undocumented immigrant worker collects, another 80 cents of wages are generated. Colorado lawmakers ought to keep those factors in mind as they consider immigration policy.

The latest data show unauthorized immigrants make up 5 percent of the state workforce and 3 percent of incomes. Working in the state, unauthorized immigrants create economic impact and jobs beyond their own employment as their earnings are re-spent, and their production spurs business-to-business activity.

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The paper was written by Alec Harris, a former policy analyst for the Colorado Fiscal Policy Institute, a project of CCLP. Read the full report on our website.