New York, Oct. 31: In the campaign season now drawing to a close, immigration and globalisation have often been described as economic threats. The truth, however, is more complex.

Over all, it turns out that the continuing arrival of immigrants to American shores is an encouraging business activity, thereby producing more jobs, according to a new study. Its authors argue that the easier it is to find cheap immigrant labour at home, the less likely that production will relocate offshore.

The study, “Immigration, Offshoring and American Jobs,” was written by two economics professors — Mr Gianmarco I. P. Ottaviano of Bocconi University in Italy and Mr Giovanni Peri of the University of California, Davis — along with Mr Greg C. Wright, a Ph.D. candidate at Davis.

The study notes that when companies move production offshore, they pull away not only low-wage jobs but also many related jobs, which can include high-skilled managers, tech repairmen and others. But hiring immigrants even for low-wage jobs helps keep many kinds of jobs in the United States, the authors say. In fact, when immigration is rising as a share of employment in an economic sector, offshoring tends to be falling, and vice versa, the study found.

In other words, immigrants may be competing more with offshored workers than with other labourers in America.

American economic sectors with much exposure to immigration fared better in employment growth than more insulated sectors, even for low-skilled labour, the authors found. It’s hard to prove cause and effect in these studies, or to measure all relevant variables precisely, but at the very least, the evidence in this study doesn’t offer much support for the popular bias against immigration, and globalisation more generally.

We see the job-creating benefits of trade and immigration every day, even if we don’t always recognise them. As other papers by Professor Peri have shown, low-skilled immigrants usually fill gaps in American labour markets and generally enhance domestic business prospects rather than destroy jobs; this occurs because of an important phenomenon, the presence of what are known as “complementary” workers, namely those who add value to the work of others.

An immigrant will often take a job as a construction worker, a drywall installer or a taxi driver, for example, while a native-born worker may end up being promoted to supervisor. And as immigrants succeed here, they help the United States develop strong business and social networks with the rest of the world, making it easier for us to do business with India, Brazil and most other countries, again creating more jobs.

For all the talk of the dangers of offshoring, there is a related trend that we might call in-shoring. Dell or Apple computers may be assembled overseas, for example, but those products aid many American businesses at home and allow them to expand here. A cheap call centre in India can encourage a company to open up more branches to sell its products in the United States.

Those are further examples of how some labourers can complement others; it’s not all about one group of people taking jobs from another. Job creation and destruction are so intertwined that, over all, the authors find no statistically verifiable connection between offshoring and net creation of American jobs.

REALITY CHECK
* Hiring immigrants even for low-wage jobs helps keep many kinds of jobs in the US.
* When immigration is rising, offshoring tends to be falling, and vice versa.
* Immigrants may be competing more with offshored workers than with other laborers.
* Economic sectors with much exposure to immigration fared better in employment growth than more insulated sectors
* Successful immigrants help the US develop strong business and social networks with the rest of the world creating more jobs.