1
The Immigration Debate

Throughout its history, the United States has been a nation of immigrants. Some came in search of economic opportunity, some for political, religious, or artistic freedom, some to reunite with their families. Their welcome depended on the idea that the newcomers conferred benefits on the nation: in scientific knowledge, artistic accomplishment, entrepreneurial talent, a richer cultural diversity, or simple additions to the labor force needed for the country's geographically and industrially expanding economy. Yet one has only to remember the Alien and Sedition Act of 1798, the Chinese Exclusion Act of 1882, or the ebbs and flows of immigration legislation in this century to know that the current debate about immigration is nothing new. Although the door has never been completely shut, it has been—in varying degrees—only partly open, as Americans continue to debate the costs and benefits of receiving and integrating immigrants, in both economic and social terms.

In the last years, concerns have been raised about how well recent immigrants are doing in the labor market, whether their job skills match the changing employment needs of the country, and whether they adversely affect wages and jobs for current U.S. residents. These concerns have been sparked in part by the influx of illegal immigrants and by the belief that they—and even legal immigrants—impose heavy costs on government at all levels and may reduce the well-being of the native-born. Beyond concerns about economic costs and benefits are equally pointed social and cultural questions: How will immigration, whether legal or illegal, affect the racial and ethnic composition of the population? The primacy of the English language? The level of crime? The American culture?

Responding to the intensification of concerns about immigration and undertaking to review immigration policy and to consider changes in immigration law,



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--> 1 The Immigration Debate Throughout its history, the United States has been a nation of immigrants. Some came in search of economic opportunity, some for political, religious, or artistic freedom, some to reunite with their families. Their welcome depended on the idea that the newcomers conferred benefits on the nation: in scientific knowledge, artistic accomplishment, entrepreneurial talent, a richer cultural diversity, or simple additions to the labor force needed for the country's geographically and industrially expanding economy. Yet one has only to remember the Alien and Sedition Act of 1798, the Chinese Exclusion Act of 1882, or the ebbs and flows of immigration legislation in this century to know that the current debate about immigration is nothing new. Although the door has never been completely shut, it has been—in varying degrees—only partly open, as Americans continue to debate the costs and benefits of receiving and integrating immigrants, in both economic and social terms. In the last years, concerns have been raised about how well recent immigrants are doing in the labor market, whether their job skills match the changing employment needs of the country, and whether they adversely affect wages and jobs for current U.S. residents. These concerns have been sparked in part by the influx of illegal immigrants and by the belief that they—and even legal immigrants—impose heavy costs on government at all levels and may reduce the well-being of the native-born. Beyond concerns about economic costs and benefits are equally pointed social and cultural questions: How will immigration, whether legal or illegal, affect the racial and ethnic composition of the population? The primacy of the English language? The level of crime? The American culture? Responding to the intensification of concerns about immigration and undertaking to review immigration policy and to consider changes in immigration law,

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--> Congress, in the Immigration Act of 1990, created the bipartisan U.S. Commission on Immigration Reform to assess current trends in immigration and to recommend changes in immigration policy. Among its other responsibilities, the commission was to assess the impact of immigration on labor needs, on employment and other economic conditions, and on the demographics of the United States. The commission, in turn, requested the National Academy of Sciences to convene a panel of experts to explore the demographic, economic, and fiscal consequences of immigration—to address some of the questions raised above. The panel was not asked to answer all the current questions about immigration, nor did its mandate extend to setting out alternative policies or making policy recommendations among them. Rather, the panel was asked to provide a scientific basis for policymaking, providing as rich a background as possible against which the commission could do its work. Immigration Policy U.S. immigration policy has always balanced a number of competing goals—economic, social, humanitarian. As long as there is a virtually unlimited supply of potential immigrants, the nation has to make choices about how many immigrants to admit and, within that number, who should be selected. At times in the complicated, never-static history of immigration policy, exclusion has been a matter of simple numbers, based on some notion of what the economy and the society could absorb. At other times, people have been excluded on specific grounds: national origin, race, health status, education, language ability, and job skills, among others. The criteria are obviously linked to the objectives, and the priorities may shift: for example, when other countries practice repression, the nation's historic role as a refuge takes precedence over concern about applicants' facility with English. Freely admitting highly skilled technical workers may mean turning away the more poorly endowed who are fleeing oppression; freely reuniting families, without regard to the degree of relationship or the capacity for self-sufficiency, may tax the society's ability to integrate the newcomers. Choosing policies, then, requires careful consideration of goals and, in turn, careful consideration of the trade-offs to be made in terms of both numbers of immigrants and their characteristics. A second avenue open to policymakers for affecting immigration involves the ways that immigrants are treated and integrated into the United States after their arrival. The successful adaptation of immigrants, including refugees and legalized immigrants, depends on the ways in which they are treated differently from the native-born—through local programs that find places to live for refugees, job search programs, and English-language programs. Overall, these avenues of policy determine how many immigrants we have, who they are, and how

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--> they influence U.S. society—and thus, in the long run, the characteristics of the foreign-born population. Who Wins? Who Loses? The choice of goals for immigration policy depends in part on the priorities assigned to the welfare of three groups with different stakes in the debate: people who were born in the United States, people who were born elsewhere but have come to live in the United States, and people who live in other countries. Even if the native-born receive primary consideration, inevitably some will be winners and some losers. Some may largely gain from immigration because the goods produced by immigrants, with their lower wages, will now be cheaper. On the other side of that coin, some native-born Americans may see their wages or even their jobs jeopardized as they compete directly with immigrant workers. But even among native-born Americans who may lose economically, attitudes toward immigrants vary by ethnicity and by the strength of ties to prospective immigrants in other countries. And simple adherence to the economic interests of the native-born may be complicated when foreign policy or social and humanitarian concerns dictate attention to the concerns of the other two groups. Another complication in setting immigration policy lies in the way it impinges on government at all levels. Policies that set the number and the kinds of immigrants to admit into the country are made at the federal level. These policies need not, however, result in the same pattern of costs and benefits for states and cities. Each level has its own sources of revenue and its own responsibilities for expenditures. What may, on balance, largely benefit one governmental level may impose heavy costs on another. Since immigrants are not spread evenly across the states, they may confer more benefits or impose more costs on the states or localities in which they are concentrated. Consequently, the net impact of immigration on the fiscal positions of individual states may vary widely. Is Immigration "Too" Costly? In the past three decades, immigration policy has been debated especially in the context of concerns about illegal immigration. Mexico, with which the United States shares a long, porous border, is only the most obvious source of clandestine migrants. Dramatic tales of Haitian boat people and dangerously overcrowded Chinese vessels highlight the issue. Whatever the interdictions of illegal immigration, in the coming decades the magnet of higher-paying jobs in the United States is unlikely to weaken for people from poor countries with dim prospects for finding well-paying jobs with potential for advancement in their home countries. In this context, there are four primary questions raised in the debate. First, does immigration, on balance, yield economic benefits or economic

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--> costs to U.S. residents? Even if the benefits outweigh the costs, does immigration potentially lower the employment and wages of some native-born workers? For example, the decline in real wage rates over the past 25 years for men with less than a college education has drawn special attention to the status of this group since they are the most likely to compete directly with immigrant labor. Although always part of the debate on immigration, these fears have been heightened in recent decades by sluggish economic growth. The recession in the early 1990s deepened this concern. Second, how are the immigrants themselves doing? Have their educational attainments and occupational skills declined over time? Are they able to assimilate during their lifetimes into the mainstream of American economic life? However well the immigrants themselves do, what are the prospects for their children and grandchildren? On the answer to these questions turn policies for admitting immigrants—in terms of both numbers and characteristics. Third, how can federal policies ease the mounting tensions between the federal government and states and localities over immigration issues? Poor economic conditions and budget pressure in areas of high immigration have spurred demands that the federal government curb both legal and illegal immigration and reimburse states for the costs of immigration. Finally, what will the population of the United States look like in 50 years? If the "new" immigrants from Asia and Latin America continue to account for the larger share of immigration, will the size, ethnicity, and racial composition of our society be much different by the middle of the next century? What Did the Panel Do? In the light of the intensity of the recent debate, Congress gave the U.S. Commission on Immigration Reform a mandate to review and evaluate the implementation and impact of U.S. immigration policy, and to report to Congress its findings and recommendations. To address some of the questions in the ongoing debate, in 1995 the commission requested the National Academy of Sciences to convene a panel of experts to explore the demographic, economic, and fiscal consequences of immigration. Through its Committee on Population and its Committee on National Statistics, the National Research Council convened a panel of 12 experts in economics, demography, and sociology to address three key questions in the debate: What is the effect of immigration on the future size and composition of the resident U.S. population? What is the influence of immigration on the overall economy, especially on national and regional labor markets? What is the overall fiscal impact of immigration on federal, state, and local governments?

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--> In answering these broad questions, the panel faced a complex set of theoretical and empirical issues. Immigration affects the economy not only through labor markets, but also through the relative prices of goods, capital flows across national borders, international trade in goods and services, and the supply of entrepreneurs or risk-takers. Moreover, in the labor market, immigration acts through changes in sheer numbers, as well as in the age, sex, educational attainments, occupational skills, and fluency in English of the immigrants. These changes are manifest not only in changes in wages but also in changes in the rates of employment and unemployment of the native-born. The panel also focused on the assimilation of immigrants into the labor market, an issue that is important for several reasons: the degree of assimilation helps to determine the long-run labor market effects of current immigration; it affects the fiscal impact of immigration through governmental revenues and expenditures; and it influences how well the immigrants adapt culturally. Studying this issue called for looking at the types of jobs and occupations that immigrants start with in the United States, at their occupational mobility, at their wages relative to those of native-born workers, and at their success in integrating into American society over time. In considering fiscal impacts, the panel assessed the contributions that immigrants make to revenues as well as to costs. Furthermore, we did not confine our study to the net impact in a single year; rather, we focused on the fiscal impact over the immigrants' life cycle and over those of their descendants. What about the effects of immigration on the size, distribution, and composition of the nation's population? Immigration affects the population, again not only through its numbers, but also through emigration, intermarriage, childbearing, and mortality. Thus the panel studied the distribution of the population in terms of geography, age, ethnicity, family composition, and immigrant generations. Shifts in the age or geographic distribution of the population impinge on the fiscal balance; changes in ethnicity or family composition alter the social and cultural scene. And the changes immigration brings about are different depending on whether it is legal or illegal. To address these questions, the panel met regularly beginning in 1995. These meetings were characterized by lively, vigorous discussion of existing research on immigration and the interpretation of these empirical studies. Where the current literature was deficient, the panel had background papers prepared to synthesize available studies or to present new frameworks and evidence. This volume draws on these papers, which were discussed at a conference in September 1996 and which will be published by the National Academy Press. The topics addressed include the labor market role of female immigrants, the historical role of immigration, a theoretical framework for addressing the fiscal impacts of immigration, the association of immigration with criminal activity, and the theoretical labor market impact of immigration. Regarding the fiscal impact of immigration, the panel relied on an ongoing

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--> study of New Jersey, a case study of California conducted by the panel, and a study of the national longitudinal effects of immigration. The panel also developed quantitative evidence on the effects of immigration on the prices of goods and services. Finally, the panel prepared new population projections for the United States to provide a better understanding of the demographic consequences of immigration. In addressing all these issues, the panel sought to identify the positive as well as the negative effects of immigration. Because it confined its study to the scope of its own expertise, this list of issues does not exhaust all possible consequences of immigration. We did not, for example, investigate the important implications that immigration may have for the nation's educational system or the environment. Our emphasis instead was on our collective areas of expertise: the structure and change in the population and in the economy. A Road Map This volume reports the results of the panel's work. It first establishes a context for studying the impact of immigration with a short history of immigration laws and trends and a review of current immigration policy. Chapter 2 also provides an examination of recent immigrants into the United States—who they are, where they came from, what they are like, where they go once they arrive. Chapter 3 reviews the demographic effects of immigration—on population growth, the geographic distribution of population, its age structure, and its ethnic-linguistic composition. Chapters 4 and 5 look at the impact of immigration, legal and illegal, on jobs and wages, of both immigrants and the native-born; it identifies winners and losers, pays special attention to the effects on women in the labor force, and lays out scenarios for the short- and long-term future. Chapters 6 and 7 address the fiscal impacts of immigration—its effects on governmental revenues and expenditures. The social consequences of immigration are the subject of Chapter 8: the effects of immigration on crime, social elites, and social cohesion.