Shedding Light On Immigration
Immigration brings little economic impact to US, but hurts some states and poor workers.
"There's no disaster lurking here," says Robert Inman, "We are not struggling with a bankruptcy issue. We can have serious discussions of immigration without getting hysterical."
Mr. Inman and a group of researchers have just released an authoritative report on immigration and its impact on the US economy.
The report's most important finding is that, for the nation as a whole, legal and illegal immigration together, are a wash - neither boon nor bust.
Subtract the extra costs of immigrants from their contributions to the massive American economy, and the result is a net gain - from $1 billion to $10 billion.
That's tiny - a $7 billion gain would equal about 0.1 percent of the national output of goods and services, says George Borjas, a Harvard University economist.
Both Mr. Borjas and Mr. Inman, a professor at the University of Pennsylvania's Wharton School of Business, belong to a 12-person National Research Council panel that put together a report on the economic, demographic, and fiscal effects of immigration.
One goal was to sort fact from myth for both the public and the US Commission on Immigration Reform, appointed by Congress.
Though immigration economics amount to a wash for the entire country, the annual inflow of about 800,000 legal immigrants and another 200,000 to 300,000 illegal immigrants does hurt some groups.
The report finds:
* Immigration has widened the rich-poor income gap.
Low education levels for many immigrants depress wages by about 5 percent for native-born Americans who never finished high school.
That represents about 44 percent of the total decline in wages for high school dropouts between 1980 and 1994. Other trends, such as technology, imports, and a decline in unionization, also hurt this group.
Blacks, nationally, have not suffered disproportionately, but have been hurt in cities where immigrants are concentrated.
* New immigrants especially compete for jobs with established immigrants.
* Immigrants pose a financial burden for states where their populations are concentrated.
In New Jersey, each household headed by a native spends an estimated $232 a year in state and local taxes to cover services used by immigrant households.
Californians get hit even harder - $1,178 per native-headed household.
Other immigrant-heavy states include Texas, Florida, New York, and Illinois.
For the entire nation, the net cost for each native household ranges between $166 and $226.
Immigrant families generally have more children than native households. They make greater use of welfare, public education, public health, and other government benefits. And their lower wages mean they pay less taxes.
This burden falls heaviest on state and municipal governments.
* Over their lifetimes, most immigrants will add more to government coffers than they take out, with some exceptions.
If an immigrant has acquired an education better than high school, he or she will add $198,000, by one measure.
However, an immigrant who has dropped out of high school ends up costing $13,000.
The panel makes no policy recommendations.
But, as Borjas acknowledges, its findings show that a system that focuses on better-educated immigrants would dramatically improve the economic gains.
Also, the report provides ammunition for states seeking special federal aid to cover their extra costs from immigration.
The panel also found that since native-born Americans have small families, immigrants will play the dominant role in population growth in the next half-century.
The population of the US is forecast to rise by 124 million, to 387 million in 2050 from 263 million in 1995. At current rates, immigrants and their descendants will account for two-thirds of the increase.
But the report avoids any conclusions about the impact on lifestyles.
"Prior immigrants were assimilated quickly," notes Inman.
But he's not certain whether that will occur again as easily. There's not yet enough evidence one way or the other, he says.