Muddled Masses

Stuart Anderson from the February 2000 issue

(Page 2 of 3)

In the San Francisco area alone, 2,775 companies led by Chinese and Indian immigrants have annual sales of nearly $17 billion and employ more than 58,000 people, according to Anna Lee Saxenian of the Public Policy Institute of California. Economies of scale, immigrant-induced productivity improvements, and other factors that Borjas concedes would exponentially increase the immigrant benefit to the economy are not included in his book because, he says, they are difficult to quantify. Even if that's the case, he should at least concede that his $8 billion figure tells us very little.

Borjas further asserts that immigrants who succeed in the U.S. would likely succeed in their own country. But if this is true, then Borjas should provide a list of all the great semiconductor firms started in communist Hungary after Andy Grove fled in 1956. In fact, immigrants come here precisely because oppressive political or economic policies block them from succeeding in their own countries.

Labor Market Impact. Borjas argues that native high school dropouts nationally experience lower wages because of immigrants. This rests on the assumption that low-skill natives leave states in response to increased immigration, thus perhaps explaining why numerous studies have not detected negative wage effects from immigrants. However, 1997 research by Columbia University economist Francisco L. Rivera-Batiz demonstrates that Borjas' theory cannot be correct. To the extent that any native out-migration is measurable in states that receive a lot of immigrants, it's actually college-educated natives who have left (and possibly for reasons that have nothing to do with immigration).

Borjas does not appear to have researched the out-migration question himself, nor does he refute Rivera-Batiz's conclusions. Instead, he writes, "The few studies that attempt to determine if native migration decisions are correlated with immigration have yielded a confusing set of results."

Borjas' labor-market analysis has other problems. For example, he sets up a model that guarantees immigrants have a negative effect by assuming they fill all the same jobs as natives, rather than allowing for the more likely scenario found by many other economists that immigrants are complements to natives in the labor market.

Also, Borjas' assertion that we have too many workers appears mistaken to anyone monitoring today's economy or long-term labor trends. Under current immigration levels, the U.S. labor force will grow by a (possibly inadequate) 40 percent between 1995 and 2050, according to the National Academy of Sciences. Under Borjas' immigration proposals, the U.S. labor force would grow by perhaps half that much.

The restrictionist argument that lower-skilled jobs have almost all disappeared is contradicted by an August 1997 study by economist Linda Levine of the Congressional Research Service. Levine concludes that "many occupations with limited educational requirements are experiencing above-average rates of job growth or substantial increases in employment levels." In 2005, writes Levine, "about one-half of all jobs" in America will require "no more than a high school diploma."

To solve problems that better research indicates do not exist, Borjas recommends the adoption of a Canadian-style point system, in which a government body assigns points to such characteristics as education level and admits only those who achieve a designated score. In practice, Borjas' plan would transfer power to federal bureaucrats at the expense of individuals, families, and employers. "A point system has many imperfections," concedes Borjas. "A few hapless government bureaucrats have to sit down and decide which characteristics will enter the admissions formula, which occupations are the ones that are most beneficial, which age groups are to be favored, how many points to grant each desired characteristic and so on."

After noting that the list of occupations, each assigned points, takes up 10 pages in the Canadian system, Borjas writes, "Most of these decisions are bound to be arbitrary and clearly stretch the ability of bureaucrats to determine labor market needs well beyond their limit." As if bureaucrats are well suited to handle any labor market decisions. In any case, it's clear that no government test can ever measure life's most important intangibles: drive, individual initiative, and a commitment to family.

Borjas concedes that keeping out Mexicans is a goal of the point system. "Most likely," he writes, "the predominance of Mexican immigrants and of immigrants from some other developing countries will decline substantially." In other words it's not just bad policy but bad politics.

It's important to understand that those who advocate a more "skill-based" immigration system are also among the most vociferous opponents of skilled immigrants. In 1998, anti-immigrant groups and their congressional allies fought the expansion of "H-1B" temporary visas for high-skilled, foreign-born engineers, computer scientists, and others, as if adding 50,000 more professionals to a 130 million-person work force would mean the end of Western civilization. Borjas himself derisively refers to these scientists and engineers as "high tech braceros," equating them with migrant farm workers.

Borjas undermines any pretense of rigorous analysis when he writes, "I suspect that an annual flow of one million immigrants is probably too large." We should reduce this number, he thinks, to 500,000 (the average annual immigration level in the 1970s, he later notes). This is a breathtaking denial of opportunity to a half million people on the basis of unsupported suspicions.

But that's not the end of Borjas' proposal. Noting that establishing a point system would be useless if those excluded entered illegally, he argues that we should subtract the number of illegal immigrants each year from the number of legal immigrants. Based on INS estimates, that would further reduce legal immigration to 200,000 persons a year.

What would such a limit mean? If so restrictive a proposal had been the law in 1997, nearly 50,000 citizens would have been unable to sponsor their own spouse or minor children for immigration (there were 248,326 spouses and minor children of U.S. citizens who immigrated legally in 1997). In addition, the government would have prohibited citizens from sponsoring parents, adult children, or siblings, while green card holders would have been forbidden from sponsoring spouses or children. No refugees would have entered. And not one "skilled" immigrant would have been admitted, either through a point system or through high-tech company sponsorship, because no slots would have been available. Thankfully, there's little chance Congress would adopt such a proposal. In 1996, it turned back, by decisive margins, efforts to reduce legal immigration.

As for what to do about illegal immigration, Borjas advocates stiffer employer sanctions and improved identification documents, though he does not appear convinced those will do the trick. Illegal immigration is a legitimate concern. In places such as Douglas, Arizona, where illegal immigrants are literally trampling on ranchers' property rights, the interesting policy question raised by Gov. Jane Hull is whether illegal entry can be curtailed or prevented by a combination of law enforcement and market forces, such as by providing temporary visas to willing workers in hospitality and other service industries. But Borjas merely adopts the view of many restrictionists: We're not sure we can stop people who are entering illegally, so let's go after the people who immigrate legally. That's not an acceptable policy.