Are We Importing Poverty with Immigrants?

Are We Importing Poverty with Immigrants?

Are We Importing Poverty with Immigrants?

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Mark Krikorian
7:26 a.m.  Wednesday  8/21/96

What is to be done? Limiting immigration is obviously not the entire solution, though the results of 30 years of government efforts to lift up the poor recommend a certain amount of caution in considering the new social-engineering projects advocated by some.

Be that as it may, reducing and reformulating immigration is at least part of the answer. However, focusing only on illegal immigration is inadequate. Even in the unlikely event we were able to achieve Sen. Dole's objective of zero illegal immigration, the bulk of immigration would remain, since the illegal-alien population grows by about 300,000 per year, while legal immigration in FY-95 was more than 720,000. While it is true that the low-skilled and poorly educated are over-represented among illegals, and thus the skill level among legal immigrants is somewhat higher, the fact remains that most immigrants are legal, and any successful changes in immigration policy need to deal with both kinds of migration. What's more, legal and illegal immigration are not even as distinct as the politicians would have us believe. I've estimated that about one-quarter of last year's legal immigrants (i.e., those who received green cards in 1995) were actually illegal immigrants using the legal system to launder their status. And it is very common for citizens, legal aliens, and illegal aliens all to be represented within a single family.

What specific changes should be made? First of all, with regard to legal immigration, I don't think there is necessarily a magic number we can name, and then craft a policy to fit within its confines. Rather, we should work from the bottom up, and see what number we arrive at.

There are three strains of legal immigration--family, employment, and humanitarian. The Commission on Immigration Reform suggested limiting family immigration to the spouses, minor children, and parents of citizens and the spouses and minor children of legal residents (non-citizens). This would eliminate the special preferences now in the law for siblings and adult children of citizens. I would go further, and eliminate the preference for spouses and children of non-citizens, since it really only applies to family members acquired after the alien has received a green card, but before he becomes a citizen. Defining family immigration in this way would result in more than 300,000 per year, based on this year's level, but the number would likely fall to 200,000 or less in short order.

The second stream of legal immigrants is employment-based, i.e., those admitted because of their skills or because jobs await them. There are 140,000 slots for such people, only about 85,000 of which were used in FY-95. Of those 85,000, nearly 10,000 were unskilled immigrants, who acquired a special preference category in the 1990 Immigration Act. Of the remaining 75,000, many are not the "best and brightest" we keep hearing about from cheerleaders for mass immigration, but, rather, cooks, librarians, clerical workers, physical therapists, etc. We could easily reduce skilled immigration to 50,000 highly skilled people a year and inflict no real harm on American business.

Finally, humanitarian immigration (refugees and political-asylum recipients) has been promiscuously misused over the past 15 years. By reintroducing discipline to our definition of "refugee" and "asylum," we could admit 50,000 total humanitarian refugees a year (as Congress expected when it passed the 1980 Refugee Act) without welshing on our international humanitarian commitments.

These measures, along with the abolition of the visa lottery, could reduce legal immigration to perhaps 300,000 per year, without any harm to important national interests, while resulting in a higher proportion of skilled immigrants than we admit now.

George Borjas
8:08 a.m.  Wednesday  8/21/96

The moderator wants us to turn to the policy implications of the research. I would argue, however, that simply knowing that unskilled natives earn "significantly less" because of unskilled immigration is no reason--in and of itself--to be concerned. The lower earnings lead to higher profits for firms and lower prices for consumers. If these gains are much larger than the reduction in earnings suffered by less-skilled workers, it should be possible to set up a redistribution scheme that makes everyone in the United States better off. So there are two questions: Are the gains much larger, and is it realistic to expect such a redistribution to take place?

As far as I know, no serious study has ever shown that the net gains from immigration to the economy as a whole are "very" large. My own calculations suggest that they are small, on the order of $7 billion per year. Moreover, the United States does not currently have, nor is it likely to have in the foreseeable future, a mechanism that would redistribute these meager gains to the losers. If we are concerned about the amount of income inequality in society and about the economic well-being of those at the bottom of the distribution, the current practice of importing large numbers of less-skilled workers will not do.

So what should we do instead? The United States is unique in pursuing an immigration policy in which family connections are about the only thing that matter. We should explore alternative policy options--similar to those followed by Canada, Australia, and New Zealand--where family connections are but one variable in the list of things that determine who gets an entry visa. I think it would be prudent to switch to a policy where an immigrant's economic potential, in addition to family connections, enters the formula that determines admission in some way.

Barry Chiswick
9:10 a.m.  Wednesday  8/21/96

I agree with Sanford Ungar that the supporters of each side of the immigration debate include individuals who for other issues might be labeled (and self-described) as liberal or conservative. Liberal environmentalists and conservative nativists want to reduce immigration; liberal civil libertarians and conservative voices for business interests favor more open borders. This is what helps make the immigration debate so interesting.

Ungar is also correct that there are many factors other than low-skilled immigration that cause income inequality and poverty, and which have caused an increase in both in the last two decades. But that does not mean that this cause should be ignored. Perhaps there are compelling reasons why we want a continued high level of legal and illegal immigration of low-skilled workers. And perhaps these reasons outweigh the adverse effects that I and several other panelists have indicated. If so, this too should be part of the debate. I, however, am not aware of "overriding" factors prevalent at this time.

As Peter Skerry indicated, the literature is full of "negative" impacts of low-skilled immigration, but these tend to be ignored because they are not "politically correct." The Urban Institute report that concluded there were no adverse impacts misrepresented the data in its own report. Low-skilled blacks in the Los Angeles area had the slowest growth in earnings and the highest rate of out-migration as a consequence of large-scale low-skilled immigration into the area. In addition to William Frey, Randall Filer, in an NBER-edited conference volume on immigration, used census data to show that immigration results in internal migration of those adversely affected.

One question is why would I, a free trader, not also be an advocate of free immigration? The reason is that immigrants receive political and economic rights (either immediately or after a few years) that the workers overseas who make the goods we import do not receive. Political rights, of which voting is only one part, give immigrants some power to change social institutions, property rights, and the distribution of income and wealth. Economic rights give them access to various income transfers and subsidies. To give a specific example: A large low-income family in which the father picks tomatoes will, if it lives on this side of the border, get free education at least through grade 12 for all of its children, as well as Food Stamps, WIC, free school lunches, subsidized housing, and Medicaid; it will get none of these if it lives on the other side of the border and we import the tomatoes.

Some people do want to extend "economic rights" to those who produce the goods we import. Recall the recent policy guidelines proudly announced by President Clinton and Kathie Lee Gifford regarding labels on imported garments to the effect that they were not made with "sweatshop labor." Good PR, but does it make sense? That is for another debate.

The moderator raised the issue of Robert Dole's opposition to illegal aliens. Nearly everyone opposes illegal immigration, just as we still favor (low fat) apple pie. For some, the solution is amnesty and free immigration. For others, it means sealing the border. Greater enforcement resources at the border and IN THE INTERIOR and PENALTIES BEYOND MERE DEPORTATION against illegal aliens can reduce illegal immigration, but it can not be ended given current income differences across countries and the freedom available in the U.S. I have purposely put in capitals interior enforcement and penalties on illegal aliens because these are policy options that get ignored. Bigger, stronger, thicker fences at the border policed by an enlarged high-technology Border Patrol will reduce illegal entry and change the method of illegal entry but not end illegal immigration.

Nor should we throw up our hands in despair if illegal immigration cannot be eliminated. There is an optimal level of enforcement for every law, including the immigration law. I believe we are below the optimal level and have poorly managed enforcement resources.

Finally, the issue is not just illegal immigration. More important is that our laws regarding legal immigration are counter-productive. Our immigration policy asks to whom you are related, or if you can come up with a claim of persecution (real or imagined). The question of what you can contribute to the American economy or society is of lesser importance. I will say more about legal immigration policy later.

Herb Stein
2:15 p.m.  Wednesday  8/21/96

We have heard from the economists. They seem to agree in wanting more limited definition of family relationship as a qualification for immigration, stricter definition of refugee status and, especially, more attention to the contribution that potential immigrants may make to the U.S. national income. I see the logic of all that. But still it leaves me a little sad. Probably because I feel so blessed that my father and my mother's parents were able to come here about 100 years ago, I feel sorry to be part of a decision that would deny that blessing to even one person. Also, I would like America to continue to be, as it is, not only the richest of all nations but also the most magnanimous.

When I think of screening immigrants for their potential contribution to the GDP, I think of Israel Baline, who came here at the beginning of this century with no money, no degrees, and no skills. Would he have passed the test? Once here, he went on to write over 100 songs that exhilarated Americans and expressed America to the rest of the world. One of them was God Bless America, and he was, of course, Irving Berlin.

These are "sentimental" considerations. I realize that if carried very far, they lead to intolerable conclusions, especially when the burden of immigration is borne by that fraction of the native population least able to bear it. But do not these sentimental considerations deserve some weight when we get down to the hard questions about what degree of family connection to recognize, how tightly to define "refugee," and how to identify economic potential? We ought to be getting to these questions anyway.

As for the illegals, Chiswick is surely right to say that beyond some point, the devotion of more resources to the enforcement of the law is not worthwhile. That brings us directly to the point he promised to say more about--what and how much should be done about the illegals.

As a side note, I was interested in what Skerry said about the special interest of native blacks in the immigration problem. I wonder what position the organizations that claim to speak for blacks, like the Congressional Black Caucus, have taken on immigration.