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September 2002, Volume 9, Number 9

Immigrants in the US

In 1979, Michael Piore in Birds of Passage, examined the role of immigrants in the US labor market and concluded that unskilled immigration was inevitable because only migrants with a different frame of reference about good and bad jobs would fill unskilled US jobs at current wages. Piore's "inevitable immigration" set the tone for a generation of scholars and students. Heaven's Door may play the same role as the point of reference for another generation of migration scholars and students.

Twenty years later, George Borjas imagined immigrants entering the US as passing through Heaven's Door to the promised land. Borjas, who was born in Cuba and emigrated to the US as a child, argues that, to maximize the economic benefits of immigration to current residents, the US should reduce immigration and change the criteria for entry. If the US does not make this recommended change in policy, Borjas concludes that immigration will continue to permit "an astonishing transfer of wealth from the poorest people in the country, who are disproportionately minorities, to the richest."

Borjas's purpose in writing Heaven's Door is, he says, to "shift the terms of the immigration debate...toward the fundamental questions" of how many and what types of immigrants should be admitted. (p5). Borjas begins with what he calls the top ten "symptoms of immigration," viz,:
* immigration is at record levels, and contributes more to US population growth then it did at the beginning of the 20th century even though the foreign born are only 10 percent of the US population in 2000, compared to 15 percent in 1915
* the relative skills and economic performance of immigrants have declined-the gap between the level of schooling and earnings of US and foreign-born residents has widened
* the gaps between natives and immigrants will widen further, since immigrants who arrived after 1980 earn about 25 percent less than similar US-born persons and, Borjas says, are likely to close only about 10 percent of this earnings gap in their first two decades in the US
* national origins matter, since schooling and skills are closely linked to national origins. Mexicans and Latin American immigrants tend to have the least schooling and the fewest skills among US immigrants
* current immigration patterns hurt unskilled US workers, "accounting for perhaps half of the observed drop" in the relative wages of workers without a high school diploma between 1980 and 1995 (p11).
* the cost of providing public services to immigrants exceeds the taxes they pay, costing an average native household in California $1,200 a year in the mid-1990s (p 12).
* immigration increases the US labor supply and lowers US wages and prices. It increases GDP by about $8 billion in 1998. Borjas notes that the economic contribution of immigrants is small --about a tenth of one percent of the $8 trillion US GDP, or about $30 per person per year for the US-born.
* the children of many current immigrants have minimally educated parents. Mexican immigrants have, on average, about seven years of schooling. Their children may have low wages, increasing the difference in earnings that already exists between ethnic groups.
* earnings progress may be slowed further if immigrants and their children cluster in immigrant neighborhoods that lack the ethnic capital to get ahead.
* ethnic neighborhoods may slow integration and lead to problems found in the underclass generally.

There is a consensus among economists that the current mix of immigrants is an economic plus for the US. The issue between them is how great a benefit current immigration provides, and what changes in policy could increase the economic benefits of immigration to US residents. Those benefits arise from increasing the supply of labor, which slightly lowers the increase in wages, but increases the returns to capital owners and expands employment.

The net increase in national income due to immigration can be represented as a triangle on a supply-demand diagram as follows: a half (three percent decrease in US wages x 11 percent immigrant share of US labor force x 70 percent share of labor in US national income, or .5 x 0.002 = 0.001 percent. The US GDP is about $8 trillion, and so 0.001 percent of GDP is an $8 billion net gain due to immigration. To put this in perspective, at two percent real economic growth, GDP increases by $160 billion a year or about $3 billion a week, making the annual economic gain due to the current mix and level of immigrants equivalent to about three weeks of normal US economic growth.

Borjas contends that immigration's major impact is distributional, calculating that immigration shifts about $160 billion a year from workers whose wages are depressed by the presence of migrants to US employers who benefit from lower wages and users of immigrants' services who benefit from lower prices. Between 1980 and 1995, immigration increased the number of US residents without a high school diploma by over 20 percent. The wages of all US residents without high school diplomas fell over 10 percent, and immigration was identified by Borjas as the major factor depressing wages at the bottom of the labor market.

The educational levels and skills of recent immigrants are rising, but the educational levels and skills of US-born residents are rising even faster so that the gap between US-born and foreign-born residents is wider than ever before. This raises the question of whether immigrants and their children will catch up to similar US-born residents in earnings. The growing education gap translates into a widening earnings gap. Borjas thus concludes that many immigrants start their American journey too far below similar US residents to close the 25 percent earnings gap. This discrepancy, Borjas fears, will persist in the next generation.

The US has a family-based immigration system, which means that immigration from areas that people want to leave can snowball over time, as immigrants send for their families, and those family members in turn sponsor their relatives. The farm economy of Mexico cannot support the people of the Mexican countryside, where about 25 percent of Mexico's 100 million residents live, and they are leaving for Mexican cities and the US. About eight million Mexican-born persons have migrated to the US, and they continue to arrive at the rate of about 300,000 a year, including half who are not authorized to be in the US.

The question posed by Borjas is whether this great migration off the land in Mexico, which spills over into the US because of the family and social networks built up over the past century, will become an American miracle of immigrant achievement or an American tragedy of a new ethnic underclass. Borjas sees a mostly half-empty glass, emphasizing the education and earnings gaps, the tendency of Latin Americans with little education to gravitate to states such as California, which have relatively generous welfare systems, and the lack of "ethnic capital" in the areas in which Mexican and other less-educated immigrants congregate to serve as a motor for upward mobility. Others see the glass half-full, emphasizing strong and extended families, a tendency toward self-employment, and the rapid acquisition of English in the second generation and beyond.

Instead of the family-unification based immigration admissions system, Borjas favors adopting a Canadian-style point system that awards points to intending immigrants for factors expected to make them successful, e.g. youth, more education, good health etc. A points system is supply-oriented, meaning that it selects newcomers on the basis of factors that are associated with economic success. The current US system for selecting immigrants on economic and employment grounds is demand-oriented, in that it gives priority for admission to individuals sponsored by US employers to fill vacant jobs.

Immigration remains controversial among economists, as reviews of Borjas's book attest (some of the reviews are at Heaven's Door was reviewed by Indian-born economist Jagdish Bhagwati in the Wall Street Journal on September 28, 1999, which drew a response from Borjas, and a reply by Bhagwati. The dispute centered on the interpretation of data. Borjas relied on Census data for evidence of the growing gap between the educational levels of immigrants and US-born residents, while Bhagwati argued that INS data show the opposite-that the educational levels of immigrants are rising relative to US-born residents, closing the gap. Neither data source is perfect. However, it should be noted that the Census data record what immigrants say they earned, while the INS data infer the immigrants US earnings from their occupation before arriving in the US, so that an immigrant doctor arriving in the US is assumed to earn the median income of a US doctor.

Another point of contention is how employers respond to the presence of immigrants. To some extent, readily-available immigrants create some jobs for themselves, as when they open businesses to serve other immigrants or seek jobs at day labor markets in home improvement store parking lots, encouraging homeowners who would have done work themselves to hire migrants instead. But experience has taught that society can have more jobs in such situations, or higher wages in such jobs, but not both. Other things equal, an increase in the supply of workers tends to reduce earning or the rate of increase in wages.

Bhagwati changes the argument, asserting that the goal is to prevent wages from falling with an influx of immigrants. He argues that wages do not have to fall with the arrival of unskilled immigrants if employers respond to the increased supply of workers by adopting "labor-using" methods of production, which Bhagwati believes they do. For example, wages for peach pickers may not decline if farmers leave peach picking machines in the barn when there are plenty of Mexican migrants available. However, the wages of US peach pickers cannot rise very much if they continue to pick by hand, so that an immigrant farm work force can fall further behind other US workers in a growing economy.

Rumbaut and Portes launched the Children of Immigrants Longitudinal Study in the mid-1990s, periodically interviewing children in Miami and San Diego to assess their integration into the US. The data they collected show that some of the children of immigrants are on a clear upward path, moving into society's mainstream in record time, while others seem headed for downward mobility, as documented in two books, Ethnicities and Legacies. Ethnicities is a 10-chapter book that includes contributions on many of the ethnic groups studied in Miami and San Diego. The concluding chapter argues that segmented assimilation is the best way to understand immigrant integration in 21st century America.

Legacies is a 10-chapter book that opens with 12 stories from Miami and San Diego, and then discusses the historical process of integration. Chapter 6 discusses language, noting the three-generation shift from immigrants speaking mostly the mother tongue, the second generation learning English at school and speaking to their parents in their language at home, and the third generation speaking only English. A 1962 study in Quebec reversed earlier academic conclusion that bilingualism was associated with less capable student performance (p116), and today "the positive association of bilingualism with cognitive development has become commonly accepted."(p117). Nevertheless, Legacies argues the US pushes immigrant children to become monolingual English speakers, and does not encourage native-born children to learn another language.

Portes has long contended that immigrant integration reflects "segmented assimilation," meaning that the characteristics of immigrants and their reception in the US affects their integration into the US, so that Mexicans with little education who face hostility integrate into an underclass, while highly educated Indians, welcomed into Silicon Valley, are integrated into the middle class. If poor immigrants wind up in the central cities, they may integrate into underclass behavior.

Legacies argues that the US demand for unskilled Mexicans will continue, but that Mexican workers will suffer discrimination, and the result is "impoverished barrios of Los Angeles, San Diego, Houston, and other large southwestern cities." (p280). To avoid what Legacies calls "downward assimilation," schools must hire "ethnic role convey the message about the self-destructive consequences of downward-leveling norms and the need to support individual achievement." (p285).

Strangers at the Gates. New Immigrants in Urban America, a book edited by Roger Waldinger, emphasizes that immigrants are moving to cities where low-skilled workers- regardless of ethnic background- have experienced falling wages and fewer economic opportunities. Many of the contributors paint pessimistic pictures for unskilled immigrants, although some think that second-generation immigrants will fare much better.

The Global Me by Zachary argues that diversity pays, that is, mixing peoples of different languages and cultures produces faster economic growth than maintaining a homogeneous culture. This argument is a sharp contrast to the views of Japanese leaders in the mid-1980s, who argued that ethnic diversity in the US limited growth. The Global Me contends that the keys to wealth are hybrids, such as persons born in one country, raised in another, and employed in a third. Their advantage lies in having both "roots and wings."

Pat Buchanan maintains that, largely because of immigration and the defeat of traditional values in the cultural wars, "America will be a Third World nation by 2050, and most of the other First World will have begun to vanish." Buchanan got only 500,000 votes in 2000, when he ran for president on the Reform Party ticket. By contrast, historian Oscar Handlin, winner of the Pulitzer Prize in 1952 for "The Uprooted," concluded then that the US was a "nation of nations," with second-generation immigrants feeling American rather than sharing the ethnic identity of their immigrant parents. Handlin in a 1995 interview emphasized that legal immigrants are treated better in the 1990s than were immigrants at the beginning of the 20th century, but that unauthorized immigrants in the 1990s in the US faced more difficulties than did legal immigrants a century ago.

Los Angeles Times correspondent Mark Fritz, in his book Lost on Earth, describes the processes that produced refugees and internally displaced peoples in Liberia, Kuwait, Sri Lanka, the ex-Soviet Union, and ex-Yugoslavia. Fritz concludes that the world needs a global police force, comprised of international volunteers under U.S. command, dedicated to preventing future wars, genocide and forced migrations. The book opens with the fall of the Berlin wall and follows the lives of refugees as search refuge.

Americans tend to leave areas receiving large numbers of immigrants, threatening to balkanize the US. Gimpel examined the interaction of domestic and foreign migration in six states: California, Colorado, Kansas, Kentucky, Florida, Pennsylvania and New York.

Historian Hugh Davis Graham, in The Strange Convergence of Affirmative Action and Immigration Policy in America, argues that two triumphs of the 1960s--affirmative action to remedy past discrimination, exemplified by the Civil Rights Act of 1964, and amendments to the Immigration and Naturalization Act of 1965 that gave preference for immigration to those with US relatives and those desired by US employers- are incompatible, and that mass immigration from Latin America and Asia spells the end of affirmative action. Graham's earlier book, The Civil Rights Era, shows how civil rights for individuals became group rights, largely because of divided government-one party dominating the White House, the other Congress, and thus increased the power of interest groups.

Between 1965 and 2000, some 35 million immigrants arrived, 26 million of them were Asian or Latin American, and most were eligible for affirmative action preferences. Affirmative action and immigration policies collided when employers hired immigrants rather than Blacks. Graham predicts that, in an economic downturn, competition for jobs will intensify pressure to dismantle affirmative action programs and to restrict immigration.

Borjas, George.1999. Heaven's Door: Immigration Policy And The American Economy. Princeton University Press.
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