America Is a Country, Not a Labor Market

A recent criticism of immigration restriction misses the mark.

By Steven A. Camarota on March 9, 2024

National Review, March 9, 2024

A recent Wall Street Journal opinion piece by Dutch professor Hein de Haas on why America needs to allow in many more unskilled immigrants is filled with the usual talking points about “labor shortages” and the like. But what is so striking about De Haas’s arguments is that in a full-page, 1,700-word essay he never even hints at any possible counter-arguments to his assertions, even if only to dismiss them. He also appears to be entirely unaware of the disadvantages of allowing in large numbers of people who have relatively little education.

Let me start with his contention that we have tried to control the border, but to no avail. His evidence for this is the $25 billion spent annually on what he calls “border enforcement.” It is not entirely clear to what he is referring, but it is true that the budget for U.S. Customs and Border Protection is about $20 billion in fiscal year 2024. But, as the agency’s name makes clear, much of what Customs and Border Protection does is related to overseeing imports and exports. Seizing counterfeit handbags or collecting tariffs is certainly useful work, but it has little to do with immigration enforcement.

De Haas correctly acknowledges that American politicians have been unwilling to stop illegal immigrants “where it matters most,” which is at the workplace. Just a handful of businesses are fined each year for knowingly hiring illegal immigrants. But that is only part of the problem. Prospective illegal immigrants have known for decades that once they make it past the border, or overstay a temporary visa, they are pretty much scot-free. Currently there are an estimated 1.9 million illegal immigrants in the country who have been given a final order of removal by an immigration judge but never were made to actually leave. Local governments routinely release illegal immigrants from jail even after Immigration and Customs Enforcement requests a detainer. Many states provide illegal immigrants with everything from driver’s licenses and in-state college tuition to welfare and free health care.

In making his case that border enforcement does not work, De Haas cites data collected since 1982 by Douglas Massey of Princeton, who purports to show that fortifying the border made it harder to go back and forth, causing more illegal immigrants to settle permanently in the United States. There is some evidence that Mexican migration became less circular over time, and increased border enforcement in the 1980s may have played a role in that trend. However, this happened only in the context of a complete lack of interior enforcement.

There was no significant increase in border enforcement in the 1970s, yet the Mexican immigrant population in the census nearly tripled from 760,000 in 1970 to 2.2 million in 1980. Those picked up by the census have put down roots, and we know much of this growth was driven by illegal migration. Illegal immigrants were settling in the United States in ever larger numbers before the increase in border enforcement. Blaming efforts in the 1980s to control the border for the growth in illegal immigration does not tell the full story. Moreover, it was the lack of interior enforcement that allowed this to happen.

Regarding economics, De Haas’s central point is that there is a “labor shortage” in “lower-skilled” sectors of the economy. Since we do not allow in enough low-skilled immigrants legally to meet demand, in his view, they just come illegally. Yet the evidence is overwhelming that the administration created the current crisis due to a host of policy changes and public statements. We also know that new immigration, including illegal immigration, fell from 2017 through 2019, before Covid, even though the economy was strong. Trump’s policies had an impact. Immigration is amenable to policy changes.

On the question of whether there are enough workers, De Haas cites the low unemployment rate, and he also mentions the failure of some people to return to the labor force after Covid. But he does not mention the much more profound and serious problem in the U.S. labor market — the decades-long decline in the labor-force participation of less-educated U.S.-born men. This decline is no secret. Entire books been devoted to it, but immigration advocates seem unwilling to talk about it.

Excluding inmates, the share of U.S.-born men ages 20 to 64 with no education beyond high school who were “not in the labor force” — meaning neither working nor looking for work — increased from 7 percent in 1960 to 25 percent in 2023.They do not show up as unemployed because they are not actively looking for work. If labor-force participation for less-educated men returned to what it was in, say, 1990 or even 2000, it would add millions to the labor force.

There is a long and complex debate as to what caused the labor-force decline, which I summarized in a paper last August. One likely cause is that immigration reduces the wages and job prospects of some U.S.-born workers, especially the less-educated. Allowing wages to rise in lower-skilled jobs by reducing immigration would certainly be helpful in drawing more Americans back into jobs. Other factors have also contributed to the decline in work, such as overly generous welfare and disability benefits, as well as changing social values and substance abuse.

A significant body of research shows that nonwork contributes to profound social problems, including welfare dependence, crime, suicide, drug addiction and overdose deaths, and reduced civic engagement. Importing replacement workers from abroad will not make these problems go away. On the contrary, relying on immigrants to fill low-wage jobs reduces the incentive for the government, employers, and society in general to deal with this problem.

Putting aside the impact on low-skilled Americans specifically, a broader reason to limit low-skilled immigration is its negative impact on public coffers. Illegal immigrants are overwhelming lower skilled. Research indicates that some 70 percent of illegal immigrants have no education beyond high school — double the share of the U.S.-born — and only 18 percent have a bachelor’s degree, half the rate of natives. As I testified to the House Subcommittee on Immigration Integrity, Security, and Enforcement in January, using existing estimates of the net lifetime fiscal impact (taxes paid minus costs) of immigrants by education indicates that the fiscal drain created by the average illegal immigrant is $68,000.

Where do the costs come from? For one thing, my colleague Karen Zeigler and I estimate that 59 percent of households headed by illegal immigrants use at least one major welfare program. This is possible because illegal immigrants can receive welfare on behalf of U.S.-born children, and illegal-immigrant children are directly eligible for some programs. Some states provide Medicaid and other welfare to illegals; and several million illegal immigrants also have work authorization and Social Security numbers, allowing receipt of the earned-income tax credit. The welfare cost alone that illegal immigrants create is $42 billion annually. This demonstrates how difficult practically and politically it is to stop unskilled low-income immigrants from creating large fiscal costs once they are allowed to settle in the country.

To be clear, these costs do not stem from illegal immigrants being unwilling to work. At least one worker is present in 94 percent of illegal-headed households, compared with just 73 percent of U.S.-born households. But our welfare system is designed to help low-income workers with children, which describes a large share of illegal-immigrant households. Low-skilled U.S.-born workers are also a net fiscal drain on average, but they are already here, while immigrants create new fiscal costs.

In addition to the impact on American workers and public coffers, low-skilled immigration can have negative economic effects. Two days after De Haas’s piece ran, the Wall Street Journal published a long article warning that “reliance on low-skilled imported labor can lead to weaker productivity growth, which ultimately determines how fast economies can expand.” Bringing in unskilled workers may please employers in the short term, especially the weakest ones, but it could have negative long-term effects on productivity.

Finally, the central issue in immigration may not be economic, but rather how many people the country can assimilate. In December 2023, the monthly household survey showed that the foreign-born population had hit 50.4 million, which includes both legal and illegal immigrants. The number is up 5.4 million since President Biden took office in January 2021. The foreign-born population has never grown this much this fast. The foreign-born share of U.S. population is now 15.2 percent, blowing past the previous record of 14.8 percent in 1890. There are now many places in the country where the majority of children are either immigrants or the children of immigrants, which could overwhelm the assimilation process.

Focusing only on the desire of low-wage employers to have access to more workers, as De Haas does, is myopic. He simply assumes that the U.S. can absorb unprecedented and unending levels of immigration. The truth is that America is not just a labor market. It is a country with social, cultural, and political interests that exist side-by-side with economic concerns. Immigration policy should reflect the broad national interests of the American people.