Immigrants Don't Steal Jobs
Offshoring and immigration are often held responsible for the destruction of manufacturing jobs in Italy. However, while the decline of the manufacturing sector is undeniable over the last few decades, it's hard to pin down the role of globalization in this. On one side, the offshoring of production processes or the employment of immigrant workers to perform them directly reduces the number of jobs available to Italian workers. On the other hand, the reduction of costs due to reorganization promotes the competitiveness of firms, which in turn can generate new jobs, also for Italian workers. Which of these effects prevails depends on various factors, including institutional factors like the flexibility of labor and product markets, but also the ability to reinvent business organization and division of tasks within the firm.
In order to better understand how to effectively manage these challenges and opportunities, international, comparative empirical studies would be required. As these are currently unavailable, the state of the debate is illustrated by a recent study concerning 58 manufacturing industries in the United States considered over the 2000-2007 period (Ottaviano, Peri, Wright, "Immigration, Offshoring and American Jobs", National Bureau of Economic Research, Working Paper No. 16439, Cambridge, Mass., 2010).
This study takes into due account a known but often forgotten fact: like other Western countries, also the US has experienced a structural drop in manufacturing employment, due to the transition from an industrial to a service economy, and thus it has little to do with globalization per se. From this perspective, the right question to be asked is whether the manufacturing industries more exposed to offshoring or immigration have lost more - or less - American jobs with respect to the average.
According to the study, offshoring has in fact reduced the share of jobs available to natives and immigrants, while immigration has affected the share of jobs being outsourced, but it hasn't had a significant effect on the share of jobs going to Americans. In terms of tasks performed on the job, offshoring has pushed US workers toward more complex and less routine tasks and immigrants toward less complex and more routine tasks. Conversely, immigration does not seem to have had a relevant effect on the types of tasks performed by US employees. However, looking al levels, rather than shares, of employment, offshoring has not had any significant effect on the number of jobs for Americans, while immigration seems to have a had a small but positive effect. This shows that a positive impact of offshoring and immigration on the competitiveness of firms does exist, as signaled by the relative expansion of the employment of American workers in the sectors more exposed to such phenomena.
All in all, these findings point to the fact that, by specializing in less complex tasks, immigrants have reduced the range of tasks being outsourced, without much affecting either the level of employment nor the types of tasks of American employees. Workers abroad have instead subtracted medium-skilled jobs from American workers, by pushing them toward more complex and less routine jobs. Nevertheless, the positive, indirect effect of offshoring on the competitiveness and expansion of firms has more than offset the direct negative effect on the overall level of employment of American workers. This is what happened in the US from 2000 to 2007. Whether this has happened or can happen in less flexible economies like Italy and other countries of Continental Europe, remains an open issue.