Wayne O'Leary

The Economic Consequences of Immigration

It’s an incontrovertible fact, establishment opinion to the contrary notwithstanding, that most Americans have a rather jaundiced view of immigration. Polls taken over the past 15 years suggest half to three-quarters of the population would prefer tighter restrictions or even a freeze on the number of foreigners entering the country. A Pew Research Center survey in 2015 indicated that fewer than 50% view additional immigration as a positive for American society.

Nevertheless, immigration continues unabated, averaging in excess of a million newcomers each year over the past quarter-century (991,000 in 2013, the last year for which data is available) and, according to Pew, accounting (with immigrant births) for 55% of the nation’s population growth since the mid-1960s. Today, 45 million immigrants live in the US, the largest number ever recorded.

The enormous impact on the overall population goes without saying. Official census figures indicate that the number of Americans, which stood at 200 million in 1967, increased by half again to 300 million in just the next 39 years ending in 2006. That growing multitude, presently 320 million and counting, will expand to 400 million as early as 2043 and could reach the half-billion mark or beyond by 2100.

Beginning with the passage of the 300-million-person milestone in 2006, concerns and soul-searching about the ramifications of America’s population explosion began to be expressed. Blaine Harden, a Washington Post writer, said at the time what many were starting to think: “Three hundred million is ... a discomfiting reminder of a nation that on its east and west coasts at least, is running noticeably low on elbow room. More humanity is stirring up more traffic, more sprawl, more rules against growth, more protests against anti-growth rules, and more of the greenhouse gas emissions that cause global warming.”

Population growth was also contributing to a national water crisis, Harden added, especially in the arid Southwest, a development highlighted most recently by the chronic overuse and depletion of the Colorado River, which supplies immigrant centers Las Vegas and Los Angeles. Dowell Myers, a professor of urban planning and demography at the University of Southern California, perhaps summarized the reality of America’s population future best in another 2006 wake-up call. “At 300 million,” he warned, “we are beginning to be crushed under the weight of our quality-of-life degradation.”

That was a decade ago, yet US population growth and its primary contributing factor, immigration, continue unimpeded on an upward trajectory. The question is, Why? The answer is simplicity itself: there is money to be made. Immigration is an integral part of how our corporate-dominated economy operates today and how it’s operated for some time.

The leading academic authority on American immigration is Harvard economist George J. Borjas, himself an immigrant from Cuba, who has written extensively on the subject and concluded that existing government policy is economically disastrous. His latest research (Immigration Economics, Harvard, 2014, and the forthcoming We Wanted Workers, W.W. Norton) indicates that while immigration produced a net gain to the US economy of $50 billion a year between 1990 and 2010, almost none of it went to workers, finding its way instead almost exclusively into corporate coffers.

The biggest losers were the native-born with less than a high-school diploma and earning under $30,000 annually (one-tenth of the workforce), whose wages were cut by 3.1%, or $900 a year on average. A related Borjas examination of the earlier overlapping period 1980 to 2000 produced an even worse result — comprehensive wage losses of 7.4% due to immigration.

In addition to employers simply taking advantage of a favorable labor-glut situation created by immigration to drive down wages, Borjas points to the specific effects of the 1965 Immigration and Nationality Act, which abolished national quotas and eased entry for poorer, less skilled immigrants, typically Hispanic, who were less assimilable, more likely to rely on public benefits, and more competitive with poorer, less educated native Americans for low-wage jobs. Average weekly earnings for the former group in 2006, for example, were one-third less than average earnings for all US workers.

These post-1965 immigrants have tended to work in manufacturing and other low-wage industries; they’re still coming, but in lesser numbers than before the Great Recession. In the second decade of the 21st century, this largely Mexican cohort is being replaced by a different set of migrants, more highly skilled and educated, who seek employment with the high-tech companies of the New Economy. Comprising 41% of all new arrivals in 2013, they are predominantly Asian, mainly Chinese and Indian, but the demand at the American end is the same: cheaper foreign-born workers for US corporations looking to replace higher-paid Americans.

The demand is such that a special class of semi-permanent immigrant workers has been created. To reduce the public-relations stigma, these specialized immigrants, who enter the country on temporary visas, are euphemistically referred to as “professional guest workers.” There are currently three job-draining guest-worker schemes in operation that amount to a form of backdoor immigration. The best-known is the H-1B visa program created under the Immigration Act of 1990, a refinement of the major 1965 reform permitting companies and universities to hire an unspecified number of foreign professionals each year (upwards of 85,000) for periods of six years.

In addition, there is the L visa program, which allows American multinationals to transfer an unlimited number of overseas employees to their US offices for up to seven years, as well as the TN visas created by NAFTA, which provide for unlimited Mexican or Canadian entries with permanent annual renewals. Altogether, these programs yearly add several hundred thousand more (865,000 in 2003) to official immigration quotas under the guise of temporarily bringing in foreign workers (in information technology, accounting, teaching, and administration) with special skills supposedly otherwise unavailable. The truth is, however, that most inexpensive “temporary” guest workers can renew their visas until they obtain a permanent-residency “green card,” which 100,000 do annually.

As a spokesman for software giant Intel, then using 8,000 low-budget H-1B employees, unashamedly admitted to an interviewer in 2003, “These are not temporary workers to us. The H-1B visa is just one step in making these workers US workers.” Nothing could better expose the charade that is our existing immigration system, which is simply a labor policy for the betterment of corporate America.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, November 15, 2016


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