How Unskilled Immigrants Hurt Our Economy
Immigration’s bottom line has shifted so sharply that in a high-immigration state like California, native-born residents are paying up to ten times more in state and local taxes than immigrants generate in economic benefits. Moreover, the cost is only likely to grow as the foreign-born population—which has already mushroomed from about 9 percent of the U.S. population when the NAS studies were done in the late 1990s to about 12 percent today—keeps growing. And citizens in more and more places will feel the bite, as immigrants move beyond their traditional settling places. From 1990 to 2005, the number of states in which immigrants make up at least 5 percent of the population nearly doubled from 17 to 29, with states like Arkansas, South Dakota, South Carolina, and Georgia seeing the most growth. This sharp turnaround since the 1970s, when immigrants were less likely to be using the social programs of the Great Society than the native-born population, says Harvard economist Borjas, suggests that welfare and other social programs are a magnet drawing certain types of immigrants—nonworking women, children, and the elderly—and keeping them here when they run into difficulty.
Not only have the formal and informal networks helping immigrants tap into our social spending grown, but they also get plenty of assistance from advocacy groups financed by tax dollars, working to ensure that immigrants get their share of social spending. Thus, the Newark-based New Jersey Immigration Policy Network receives several hundred thousand government dollars annually to help doctors and hospitals increase immigrant enrollment in Jersey’s subsidized health-care programs. Casa Maryland, operating in the greater Washington area, gets funding from nearly 20 federal, state, and local government agencies to run programs that “empower” immigrants to demand benefits and care from government and to “refer clients to government and private social service programs for which they and their families may be eligible.”
Pols around the country, intent on currying favor with ethnic voting blocs by appearing immigrant-friendly, have jumped on the benefits-for-immigrants bandwagon, endorsing “don’t ask, don’t tell” policies toward immigrants who register for benefits, giving tax dollars to centers that find immigrants work and aid illegals, and enacting legislation prohibiting local authorities from cooperating with federal immigration officials. In New York, for instance, Mayor Michael Bloomberg has ordered city agencies to ignore an immigrant’s status in providing services. “This policy’s critical to encourage immigrant day laborers to access . . . children’s health insurance, a full range of preventive primary and acute medical care, domestic violence counseling, emergency shelters, police protection, consumer fraud protections, and protection against discrimination through the Human Rights Commission,” the city’s Immigrant Affairs Commissioner, Guillermo Linares, explains.
Almost certainly, immigrants’ participation in our social welfare programs will increase over time, because so many are destined to struggle in our workforce. Despite our cherished view of immigrants as rapidly climbing the economic ladder, more and more of the new arrivals and their children face a lifetime of economic disadvantage, because they arrive here with low levels of education and with few work skills—shortcomings not easily overcome. Mexican immigrants, who are up to six times more likely to be high school dropouts than native-born Americans, not only earn substantially less than the native-born median, but the wage gap persists for decades after they’ve arrived. A study of the 2000 census data, for instance, shows that the cohort of Mexican immigrants between 25 and 34 who entered the United States in the late 1970s were earning 40 to 50 percent less than similarly aged native-born Americans in 1980, but 20 years later they had fallen even further behind their native-born counterparts. Today’s Mexican immigrants between 25 and 34 have an even larger wage gap relative to the native-born population. Adjusting for other socioeconomic factors, Harvard’s Borjas and Katz estimate that virtually this entire wage gap is attributable to low levels of education.
Meanwhile, because their parents start off so far behind, the American-born children of Mexican immigrants also make slow progress. First-generation adult Americans of Mexican descent studied in the 2000 census, for instance, earned 14 percent less than native-born Americans. By contrast, first-generation Portuguese Americans earned slightly more than the average native-born worker—a reminder of how quickly immigrants once succeeded in America and how some still do. But Mexico increasingly dominates our immigration flows, accounting for 43 percent of the growth of our foreign-born population in the 1990s.
One reason some ethnic groups make up so little ground concerns the transmission of what economists call “ethnic capital,” or what we might call the influence of culture. More than previous generations, immigrants today tend to live concentrated in ethnic enclaves, and their children find their role models among their own group. Thus the children of today’s Mexican immigrants are likely to live in a neighborhood where about 60 percent of men dropped out of high school and now do low-wage work, and where less than half of the population speak English fluently, which might explain why high school dropout rates among Americans of Mexican ancestry are two and a half times higher than dropout rates for all other native-born Americans, and why first-generation Mexican Americans do not move up the economic ladder nearly as quickly as the children of other immigrant groups.
Purrrfect.
