Impact of Immigration on a Different America

By Steven A. Camarota on February 2, 1999

The San Diego Union-Tribune, February 2, 1999

In January, the Immigration and Naturalization Service announced that it gave out almost 800,000 green cards in fiscal year 1997, somewhat less than the year before. The drop was caused by procedural changes that slowed the visa application process, creating a backlog.

What's really important about these numbers is that the 1990s are still on track to be the highest decade of legal immigration in our nation's history, exceeding by nearly 1 million the previous record set in the first decade of this century when 8.8 million immigrants arrived. This is true even without counting the 420,000 illegal aliens who the INS estimates now settle here each year. The current influx has caused an enormous growth in the immigrant population, from 9.6 million in 1970 (4.8 percent of the population) to 26.3 million (9.8% of the population) today.

What makes today's immigration so different from the great wave at the turn of the century? Some point to the fact that the source of immigration has changed from being over 90 percent European, to being 85 percent non-European. While true, this is much less important than the fundamental changes that have occurred in this country over the last nine decades. In a very real sense, it is America that has changed.

At the turn of the century, immigrants arrived in a country that had an almost insatiable demand for low-skilled labor, with the vast majority of the country's work force employed in agriculture, manufacturing and mining. Today, there are many fewer such jobs, and the number declines each year. However, immigrants remain predominantly low-skilled - nearly 40 percent of recent immigrants lack even a high school diploma.

The relatively low skill level of immigrants means that they are heavily concentrated in low-wage occupations - 45 percent of recent immigrants hold jobs that place them in the poorest fifth of the labor market. This high concentration at the bottom coupled with weak demand for such labor makes it much more difficult than in the past for immigrants to move up the economic ladder. Also, by increasing the supply of low-skilled labor, immigration has had a significant negative effect on the wages of natives who also work in this sector of the economy.

A report published by the Brookings Institution found that the wage losses suffered by unskilled workers from immigrant competition amount to $13 billion annually. And my own research indicates that the wages of natives employed in the bottom fifth of the workforce are reduced by about 10 percent because of immigration.

Of course, immigration probably also reduced wages in the past. But at that time business interests so dominated public discourse that it was not seen as a problem. Today, we are rightly much more concerned about the plight of the working poor and the overall distribution of income.

In addition to the economy, the size and scope of government has grown dramatically. Spending on everything from education to infrastructure maintenance is many times what it was at the turn of the century. With federal, state and local government now accounting for roughly a third of GNP, each individual on average must be able to pay a good deal in taxes to cover his use of public services. In practice, the middle and upper class pay most of the taxes. The poor, immigrant or native, as a result of their lower incomes, generally consume significantly more in public services than they pay in taxes.

This means that the arrival of large numbers of relatively poor immigrants has a significant negative effect on public coffers in a way that was not the case in the past. In 1997 the National Academy of Sciences estimated that immigrant households consume between $11 and $22 billion more in public services than they pay in taxes each year.

Not only has our economy and the size of government changed, we are now understandably much more concerned about the pollution and congestion that come with further population growth. In 1910 our total population was only 92 million. T today it is 271 million. Census Bureau projections indicate that, if the current level of immigration continues, in 50 years there will be 80 million more people living in the United States than if immigration were reduced to 300,000 a year. This rapid population growth comes from the arrival of immigrants and from their much higher birth rates.

At the turn of the century our population grew regardless of immigration because natives also had large families. But today, native couples have only about two children on average - the replacement rate. This means that immigration has become the determinate factor in population growth.

None of this is to say that we should stop accepting immigrants altogether. But it does suggest that lowering the overall level of immigration and selecting more immigrants based on needed skills, instead of the current system where 70 percent of immigrants are admitted because they have relatives in the United States, would make a good deal of sense. Most policies have to change with the times, and immigration policy is no exception.