Commentary

A Boon Rather Than a Burden

By Daniel Griswold
This article appeared on Yale Politic on August 28, 2007.

Immigrants play an important part in the successful story of America’s free-enterprise economy and our dynamic culture. The general benefits of immigration, including immigration from Mexico, are as relevant today as they have been throughout American history. Current efforts to reform the U.S. immigration system should be based upon that fundamental fact.

For the U.S. economy, foreign-born workers provide needed flexibility, allowing the supply of workers to increase relatively quickly to meet rising demand. When demand falls, would-be immigrants can decide not to enter, and those already here can decide to return home. The result is a more efficient economy that can achieve a higher rate of sustainable growth without encountering bottlenecks or stoking inflation.

Immigration helps to maintain a steady, healthy growth rate in the U.S. labor force. Our labor force is actually growing more slowly in recent years than at anytime in the past half century, and without immigration would actually begin to contract within the next few decades. Because of immigration, the U.S. workforce and economy will continue to grow well into the 21st century, while Japan, Germany, and other advanced economies will be forced to adjust to an unprecedented decline in their workforces.

Immigrant workers willingly fill important niches in the labor market. They gravitate to occupations where the supply of workers falls short of demand, typically among the higher-skilled and lower-skilled occupations. That hourglass shape of the immigration labor pool complements the native-born workforce, where most workers fall in the middle range in terms of skills and education. As a result, immigrants do not compete directly with the vast majority of American workers.

The impact of immigration on the small segment of the U.S. workforce that competes directly with immigrants is more than offset by the lower prices and wider range of goods and services that all workers enjoy because of immigration. Americans also benefit from higher returns on investment, and from the opportunities created for more skilled native-born workers in those industries that depend on immigrant workers to meet the needs of their customers. In an August 2006 study for the National Bureau of Economic Research, authors Gianmarco I.P. Ottaviano and Giovanni Peri found “a significant positive effect of immigration on average U.S. wages, and on each group of workers with at least a high school degree, and only a very small negative effect on wages of workers without a high school degree in the long run.”

Despite the widespread perception, America is not being flooded with immigrants. The number of foreign-born people who settle here each year, legally and illegally, is about 1.2 million. That is on the high end of historical experience in absolute numbers, but not relative to population. In the context of a U.S. population that has reached 300 million, the current immigration rate is about four immigrants per 1,000 U.S. residents per year, less than half of the peak annual immigration rate of 10.4 per 1,000 in the decade from 1901 to 1910. Today about twelve percent of the U.S. population is foreign-born. That is still below the peak of 1910, when 14.7 percent of people living in our country were foreign born.

One troubling aspect of American immigration today is the large share of it that is illegal. Today nearly one-third of foreign-born residents in the United States, an estimated 11 million, reside here without legal documents, and the number grows by an estimated 400,000 to 500,000 each year. The fundamental and inescapable reason for this phenomenon is that our immigration laws are colliding with two powerful economic and demographic realities, and as usual reality is winning.

Even as our economy becomes more technologically advanced, the demand for less-skilled labor has continued to grow. Large and important sectors of the U.S. economy—hotels and motels, restaurants, agriculture, construction, light manufacturing, health care, retailing, and other services—depend on low-skilled immigrant workers to remain competitive.

That demand will likely continue into the foreseeable future. According to the Department of Labor, the largest growth in absolute numbers of jobs during the next decade will be in several categories that require only “short-term on-the-job training” of one month or less. We all know what those jobs are: retail sales, food preparation, landscaping and grounds keeping, janitors, cashiers, waiters and waitresses, teaching assistants, and home health aides. The net employment growth in those categories in the next decade will total more than four million.

Meanwhile, the supply of American workers willing and happy to fill such jobs continues to shrink. We are getting older and better educated. The median age of workers in the U.S. labor force will soon reach 41.6 years, the highest level ever recorded in U.S. history. At the same time, workers in the U.S. labor force are more educated than ever.

In the past four decades, the share of adults 25 and older who have not completed high school has plunged from more than half in 1964 to less than 10 percent today. Immigrants provide a ready and willing source of labor to fill that growing gap between demand and supply on the lower rungs of the labor ladder.Yet our current immigration system offers no legal channel for peaceful, hardworking non-residents to enter the United States even temporarily to fill those jobs that an insufficient number of Americans want. The result is large-scale illegal immigration.

We’ve tried enforcing existing law and it’s failed. According to a 2005 Cato study by Princeton professor Douglas Massey, the U.S. government has increased spending on the Border Patrol by ten-fold since 1986. That has enabled an eight-fold increase in “line-watch hours,” the amount of time agents actually spend patrolling the border. The government has built three-tiered walls for miles out into the desert. For the first time in U.S. history, it has imposed fines on U.S. employers who knowingly hire undocumented workers. We’ve busted janitors and raided chicken processing plants from coast to coast and in between. Yet the number of illegal immigrants living in the United States continues to grow.

Our aggressive enforcement has had perverse consequences, according to the Cato study. Cracking down on the traditional urban entry points in the early 1990s didn’t stop illegal immigration. It only created a deadly diversion of the flow to more remote desert areas. As a result, immigrants entering the United States illegally across the U.S. Mexican border are more likely to enter without being caught, they are more likely to stay once they are here because of the expense and risk of crossing the border, and they are more likely to die-three times more likely than in the 1980s, in fact. As a result, more than 3,000 have died crossing the border in the past decade. That is too high a price to pay for seeking a better job. The lesson of the past two decades should be clear: Enforcement alone is doomed to fail.

The only realistic answer is comprehensive immigration reform. We need to change a broken system so that it works in our national interest. Such reform should create a legal channel for workers from Mexico and other countries to enter the United States temporarily to fill those jobs vital to our economic strength as a nation. It should grant temporary but also renewable visas that would allow foreign-born workers to fill those jobs where their labor is most needed. Such visas should allow multiple re-entries for as long as the visa is valid, complete mobility between employers and sectors of the U.S. economy, and the full protection of U.S. law.

Comprehensive reform should also legalize the millions of workers currently in the United States without legal documentation. Many of these workers have lived and worked in the United States for several years. They have become valuable participants in their workplaces and their communities. They should be allowed and encouraged to come forward to be legalized and properly documented.

Legalization does not mean amnesty. Newly legalized workers can be assessed a fine. They should be required to get in line with everybody else if they want to apply for permanent status. However we achieve legalization, it would be far preferable to the status quo of millions of people living in a legal and social twilight zone, outside the rule and protection of the law.

Reform is not about opening the door to millions of additional foreign workers. It’s about legalizing the millions already here and the hundreds of thousands who are coming in each year already. It’s about changing our immigration laws to conform to the realities of a dynamic country that continues to create ample opportunity for workers, native-born and immigrant alike.

Daniel Griswold is the director of the Center for Trade Policy Studies at the Cato Institute.