The Economic Consequences of Immigration

Thomas Jackson, American Renaissance, December 7, 2012

How we suffer from our folly.

Steven A. Camarota, Immigrants in the United States: A Profile of America’s Foreign-Born Population, Center for Immigration Studies, 2012, 90 pp., $20.00 (soft cover, postage included).

The Center for Immigration Studies (CIS) is one of the country’s best sources of information about immigration. Its reports on such things as how immigration affects American workers, the mechanics of deportation, and immigrant crime are carefully researched and clearly written. Since its founding in 1985, CIS has supported immigration control, but its main goal is to discover and present the facts. It is an invaluable source of reliable information on a subject that is driven mostly by emotion.

A recent study by the center is an exhaustive economic profile of immigrants living in the United States. Drawing primarily on the huge amounts of data gathered by two census bureau surveys—the American Community Survey and the Current Population Survey—the center’s director of research, Steven Camarota, has assembled what is probably the most detailed economic picture now available of the foreign-born population.

Available on the web, Immigrants in the United States is full of statistics and written in measured language, but it makes a devastating case against current immigration policy. One of its great strengths is an examination of immigrants by country of origin; the difference in outcome between Mexican and British immigrants, for example, is immense. The report also examines the slow progress Hispanic immigrants are making, even after three generations or more in the United States, and offers surprisingly focused information about illegal immigrants.

More than ever

Mr. Camarota first points out that the decade that ended in 2010 brought us by far the most immigrants in any decade in our history: 14 million. There are now 40 million immigrants living here, and their percentage of the population has jumped from 4.7 percent in 1970 to 13 percent. More than one in eight people in this country were born somewhere else. Immigrants and their American-born children accounted for 72.5 percent of population growth during the decade.

One quarter of all immigrants live in California alone, and more than a quarter of the people living in the state are foreign born. At the other end of the scale, West Virginia’s population is only 1.2 percent foreign born, followed by Montana (2 percent), Mississippi (2.1 percent), North Dakota (2.5 percent), and Wyoming (2.8 percent).

Where do immigrants come from? Latin America, including Mexico, contributed 53 percent of last decade’s 14 million. We now have 21 million foreign-born Hispanics, in addition to the 31 million who were born here. The next largest sending countries are China, India, Philippines, and Vietnam. There are also 1.3 million black African immigrants living in America, and more than half came in just the last decade. We even have Nepalese (65,000), Burmese (80,000), Bangladeshis (159,000), and Pakistanis (300,000).

The table, below, taken from the report, shows cumulative number of immigrants from various countries in 1990, 2000, and 2010.

Immigrant characteristics

About 28 percent of immigrants over age 25 failed to finish high school, compared to 7 percent of natives (5 percent for whites). This helps explain why even though 71.6 percent of immigrant adults work (74.4 percent of native adults work), many are poor. The table below shows rates of immigrant poverty and near poverty (“near poverty” is an income of up to 200 percent of the poverty threshold), by country of origin. No fewer than 30 percent of Mexican immigrants are poor, and an astonishing 67.8 percent of Mexican immigrants and their children are in or near poverty. The figures for Honduras and Guatemalans are similar. Interestingly, immigrants from India (6.7 percent) and the Philippines (5.3 percent) are least likely to be poor.

The lower part of the table, with natives broken out by race, shows black rates of poverty (27.8 percent) and poverty plus near poverty (51.9 percent), which puts them at about the level of immigrants from the Dominican Republic. At 31.2 percent, the poverty rate for Hispanic immigrants and their children is more than three times the native white rate of 9.7 percent. It is common to bemoan the income gap between rich and poor in the United States, but few people point out how immigration has swollen the ranks of America’s poor.

The “near poverty” designation is not merely a measure of hardship. That is the income cutoff level that makes someone eligible for a great many means-tested programs. People in this category rarely pay any state or federal income tax, and those who work usually qualify for the Earned Income Tax Credit and the Additional Child Tax Credit. Over 60 percent of immigrants from Mexico, Honduras, and Guatemala are either in or near poverty.

And, indeed, we find that usage rates of means-tested programs are very high among Hispanic immigrants (Mexicans: 57.4 percent, Guatemalans: 55 percent, Dominicans: 54.2 percent, Hondurans, 51.3 percent) as opposed to a rate of 22.8 percent for native families. And there are, of course, sharp differences among native families by race (blacks: 43.8 percent, Hispanics: 40.1 percent, Asians: 19.1 percent, whites: 17.6 percent). Certain programs, such as cash relief and subsidized housing, are not supposed to be available to non-permanent residents, so amnesty would bring about a dramatic rise in welfare use by immigrants.

Immigrants who have not graduated from high school stay poor. Even after 20 years in the United States, 66.2 percent are in or near poverty, 63.2 percent use some form of welfare, and 47.6 percent do not have medical insurance.

Immigrants in general are far more likely than natives not to have medical insurance: 34.1 percent versus 13.8 percent. Again, there are huge disparities by race and nationality: Only 11.5 percent of native whites are uninsured while 21.4 percent of American-born Hispanics are uninsured. More than half of all Mexican, Salvadoran, Guatemalan, and Honduran immigrants are uninsured; these are the people who will benefit most when the national insurance program Mr. Obama signed in 2010 comes into effect.

Many immigrants live in what Americans consider overcrowded housing, which is defined as more than one person per room. Overcrowding is especially severe for Mexican immigrants (26.3 percent of households) and Central Americans (21 percent). Only 1.2 percent of native whites live in overcrowded housing. Immigrants as a whole are more than 6 times more likely than natives to live in such housing. Thus, although they are 13.8 percent of all households, immigrants account for 52 percent of all overcrowded households. In California they account for 72 percent, and in New Jersey and New York for more than 60 percent.

Mr. Camarota notes that property taxes are levied by household. Because immigrants are more likely than natives to be poor, they live in less-expensive, lower-taxed housing than natives. And because so many immigrants tend to live in each home, the per capita tax payments are lower still. At the same time, immigrant households send more children to public school than do native households—50 percent more in the top 28 immigrant-receiving states. In North Carolina, Arizona, California, Colorado, Oregon, Nebraska, and Nevada, the average immigrant household sends twice as many children to public school as the average native household. Immigrants consume other local services at higher rates than natives and are thus a huge burden on local as well as federal budgets. Mr. Camarota drily notes “the very real possibility that immigrant households are on balance a net fiscal drain.”

Stalled progress

This report takes a comprehensive look at the progress that succeeding generations of Hispanic immigrants make once they arrive in the United States. The graph below compares first-, second-, and third-generation Hispanics to non-Hispanic natives. Hispanics make clear gains from the first to the second generation.

For example, 47 percent of Hispanic immigrants do not have a high school diploma, whereas in the second generation only 16 percent are dropouts. However, the third generation is slightly more likely than the second generation to drop out, and Hispanics show this pattern of slight deterioration across the board, except in percentage without medical insurance. However, as Mr. Camarota points out, this exception is due to the fact that the third generation is more likely to be insured through government-funded Medicaid. It is worth noting that these comparisons are to all non-Hispanic natives. If the comparison were to native whites the contrast would be even sharper.

Mr. Camarota notes that declines from the second to third generations are not due to an age mismatch between the two generations. It would distort the comparison if middle-aged second-generation Hispanics were compared to young third-generation Hispanics who were just starting their careers. These declines from the second to the third generation are controlled for age.

Illegal immigrants

Mr. Camarota estimates that there are about 10.5 million illegal immigrants in the country, or the equivalent of 28 percent of all immigrants. He notes that this could be an underestimate, and that there could be as many as 11.5 million illegals. From various sources he also concludes that 54 percent of illegals did not complete high school, and that 58 percent are from Mexico. Twelve percent are from Central America, 9 percent from East Asia, 7 percent from South America, with 3 percent each from Europe, South Asia, and the Caribbean.

About half of all illegals live in four states: California, Texas, Florida, and Illinois. Probably 62 percent do not have medical insurance (it is remarkable that 38 percent manage to get it). Illegals account for a fifth to a quarter of the uninsured populations of New Jersey, Texas, Nevada, and California, and no less than 29 percent in Nevada.

Illegals are entitled to many kinds of welfare—food stamps, free school lunches, WIC—though they are not supposed to get outright cash assistance. Their US-born children, however, are a back door to the welfare system. In Texas, California, and Illinois, well over half of illegals are probably using at least one major welfare program.

This is not necessarily because illegal immigrants do not work. In fact, in 96 percent of illegal households, at least one adult has a job. This figure is considerably higher than the equivalent figure for natives, but there can be many people living in an illegal household. Immigrants who work, both legal and illegal, consume a great deal of welfare because there are so many means-tested programs for the working poor.

Mr. Camarota estimates that the total annual income of illegal immigrants is about $162 billion dollars and that the annual cost of educating their children is about $39 billion. Just to pay for the public schooling they consume, illegals would have to pay 24 percent of their income in taxes—an impossibility, given their low incomes. And this does not account for the other public programs and benefits they consume.

State data

This report includes interesting data by state. We learn, for example, that children of immigrants make up more than 30 percent of the public-school students in New Jersey, Texas, New York, and Nevada, and an astonishing 48 percent in California. Similar percentages of public-school students in these states speak a language other than English at home. We also learn the states where the highest percentages of immigrants are illegal: North Carolina (59 percent), Georgia (51 percent), Arizona (48 percent), Texas (46 percent). In California, only 26 percent of immigrants are illegal.

This report contains a great deal more economic information and makes many more instructive comparisons. All the data underline how varied the impact of immigration is on different states, and how much variation there is in the success rates of immigrants from different countries. The only possible overall conclusion, however, is that it is folly to import millions of poor, uneducated people, whose children and grandchildren continue to be poor and uneducated. No one can read this report and not conclude that Hispanic immigration, in particular, is disastrous for America.

Unanswered questions

Why does the United States admit so many immigrants who are poorly educated and consume so many public resources? One commonly proposed answer is that there are many low-paying jobs that natives refuse to take. However, Mr. Camarota notes that there are only a few professions that are dominated by immigrants: farm labor (53 percent of workers are immigrants), maids (48 percent), taxi drivers (41 percent), meat processors (35 percent), construction labor (34 percent), computer programmers (32 percent), and then the drop off is steep. Moreover, native unemployment is high in all these fields: an average of 16 percent in 2010 compared to 9.5 percent nationally.

The recession has made things worse. In virtually every state, there are about four times as many unemployed natives as there are immigrants who arrived in the decade ending in 2010. If only one in five of the 52.7 million working-age natives without jobs were to be employed, their numbers would be more than the 7.14 million immigrants added to the workforce in the last decade.

The contrast is just as striking when one considers illegal immigrants who hold jobs. There are about five times as many native unemployed teenagers and adults with no more than a high-school education than there are working illegals. Many of those natives may be shiftless unemployables, but others would doubtless have jobs if the illegals were not here.

Economics, moreover, is just one aspect of immigration. This report does not even touch on crime rates among immigrants or the extent to which many—especially those from Mexico—harbor resentments against the United States. There is nothing here about rates of illegitimacy, HIV infection, child abuse, school failure, or domestic violence. Nothing about the well-documented decline in social trust that accompanies increased “diversity.” Nothing about the “affirmative action” benefits for which many immigrants qualify. Nothing about the beleaguered descendants of America’s founding stock, who pay most of the taxes to support ever-larger numbers of tax consumers, both native and immigrant.

But the economic arguments should be enough, especially at a time of high unemployment and record budget deficits, to persuade Congress to eliminate most immigration. No sensible country lets in millions of strangers who take jobs from natives, and then gives those strangers free food, schooling, and medicine. This makes ordinary Americans furious, of course, but not our rulers. If all our poor, ill-educated, unassimilated immigrants were whites—from France, say—our rulers would have no trouble throwing them out and keeping them out.

Mexicans and Salvadorans are a different matter. We must overlook their failures because they are not white. To notice the harm they do our country would be “racist.”

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Thomas Jackson
Thomas Jackson lives in Virginia and has been writing for American Renaissance for more than 20 years.
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