'IMMIGRANTS built America." You can't get very far into any
discussion of immigration before someone brings up this old
chestnut. Even former Texas Democratic Rep. Barbara Jordan paid lip
service to it recently when introducing the recommendations of the
US Commission on Immigration Reform, which she chairs. But her
commission stunned official Washington by conceding, in effect,
that the legal immigration system created by the epochal 1965
Immigration Act is broke and needs fixing - including a 30 percent
cutback in influx levels.
Looked at more closely, the Jordan commission's findings make
clear what its staff has been saying privately for some time:
Immigration is probably at best neutral in its economic effects.
One of the commissions lesser-noticed recommendations: reducing the
number of slots specifically reserved for skilled immigrants - and
punishing employers with a sort of tax for hiring them. Why?
Because the economy does not particularly need skilled immigrants.
Of course, the economy has even less need of the continued
annual influx that the commission envisions, at least half a
million who will be mostly relatives of immigrants already here.
But this "family reunification" is apparently politically
Immigration is an emotional issue and concerns about it are
often bitten back for fear of appearing racist. Thus Americans hear
a lot about Vietnamese valedictorians (to choose an example at
random) but not much about Vietnamese crime gangs or the 25 percent
Vietnamese welfare participation rate - five times that of American
whites. Yet immigration is something that absolutely needs to be
judged on balance.
The debate about immigration's economic impact usually focuses
on the fiscal issue - whether or not immigrants cost government
more than they pay in taxes. Immigration enthusiasts, a distinct
American type, have been steadily driven backward as successive
Census reports have made it increasingly clear that the post-1965
immigrants are doing worse in the economy than earlier waves.
Immigrants are now over 9 percent into welfare, on average, with
some national-origin groups (for example, Dominicans - 28 percent
into welfare) showing ominous signs of constituting a new
This issue of immigration's fiscal impact was more or less
settled last fall by the leading scholar in the field, George
Borjas of the University of California at San Diego, himself a
Cuban immigrant. In a major article in December's Journal of
Economic Literature, Mr. Borjas demonstrated that the current
immigrant presence imposes a net cost on government of more than
$16 billion annually.
The fiscal impact of immigration, however, is only part of the
story. The real issue: Is immigration benefiting native-born
Currently, the foreign-born earn 6 percent of GDP (Gross
Domestic Product). But how much do native-born Americans benefit
from this immigrant presence? No one seems to have asked. Again,
however, George Borjas, using a standard econometric technique, has
come up with an answer (published in this spring's Journal of
Economic Perspectives): perhaps 0.1 percent of GDP - maybe $7
billion. In other words, the native-born don't benefit much at all.
Nor is this result a surprise, actually, to anyone aware of the
obscure "accounting for growth" literature, generated by economists
trying to figure out why economies grow. The key finding: Increases
in labor and capital together never explain more than half, and
sometimes as little as a tenth, of economic growth.
What matters is innovation - which is why Japan has been able to
outstrip the US in terms of economic growth by a factor of three
since 1955, with no immigration at all. …