Obama’s Immigration Distraction

Even immigrants are shunning America’s sputtering economy

Even advocates of immigration reform cringed at President Obama's speech last month with its impressive juxtaposition of contradictory vices: sophomoric and professorial; hectoring and plaintive; combative and defensive.

But above all it was one more thing: utterly and completely beside-the-point. There is exactly zero chance that Congress will do anything at all about immigration in the near future.

Of course, Obama knows that. The purpose of this speech had nothing to do with immigration and everything to do with the approaching mid-term elections. The true message of this speech was: Forget about the dismal economy, stupid, and think about immigration and all the nasty things Republicans are doing on this front—which they undoubtedly are.

But the great irony is: If you do think about immigration, it points you right back to the dismal economy. Regardless of whether you believe immigrants drive economic growth or not, no one—not even Lou Dobbs—can deny that they are an economic bellwether. And what both the low-skilled and high-skilled immigrants are saying about the U.S. economy right now is deeply unsettling. They don't want to come here because America is not a land of economic opportunity anymore.

According to a January study by Department of Homeland Security, overall population of unauthorized aliens in the country dropped from 11.8 million in 2007 to 10.8 million in 2009. Opponents of immigration attribute this to tougher border controls. But state-level data from the study show two things: One, this drop has little to do with stepped-up border enforcement; and two, it has a lot to do with the economic health of a state.

Indeed, between 2006 and 2007, one year after President Bush signed into law throwing even more money at heightened border security, the top 10 states with the biggest illegal populations saw a 470,00 jump in this population. It started dropping after that along with the economy—and more in economically distressed states.

In fact, if one sets aside New York, which experienced a drop in the illegal population despite being in the second-highest quintile in terms of economic growth, this pattern is pretty clear. For example, California, whose economy has seen better days, saw an 8.4 percent drop in its illegal population between 2007 and 2009. Florida, which is in the bottom quintile of economic performers, saw a 25 percent drop in the same time period and New Jersey, which is in the second bottom quintile, 23 percent.

Interestingly, Arizona, which is in the lowest quintile, has seen only a 13 percent drop, less than Florida or New Jersey, even though those two don't have Sheriff Joe Arpaio running around harassing their Hispanic population. By contrast, Texas, which is in the second highest quintile, has seen less than a 1.7 percent drop in its illegal population since 2007, even though it has been erecting plenty of miles of high-tech fences, thanks to increased border enforcement dollars from Uncle Sam.

But America's sputtering economy is not just turning off low-skilled immigrants. High-skilled immigrants—who face relatively less hostility—are spurning it too. The clearest evidence of this is the number of applications for H1-B visas or work permits that allow them to legally work in this country. Prior to the recession, the entire 85,000 H1-B quota for the year would be filled within days of its becoming available on April 1. Remember when Microsoft CEO Bill Gates was pleading with Congress to raise this quota because he couldn't hire enough foreign workers? Now these visas are going a begging.

In the 2010 fiscal year, the H-1B quota was reached in December 2009. In the 2011 fiscal year (which starts Oct. 1) it is likely to take even longer, according to Stuart Anderson of the National Foundation for American Policy, a research organization.

Even this does not fully capture the waning interest of foreign techies in America. It's not just that they are not coming to the U.S. as much anymore. The ones who are here are increasingly returning home, producing a reverse brain drain, notes Vivek Wadhwa, a senior research associate at the Harvard Law School who has been studying the phenomenon for years now. The U.S. government does not track returning émigrés, but Wadhwa estimates that about a third of the start-ups in India have been founded by returnees. What's more, at one recent meeting with Indian techies in Silicon Valley, Wadhwa found that about three-quarters of them planned to return home.

And those going back are not just new immigrants who don't have the stomach to negotiate America's senseless green-card labyrinth. Wadhwa polled 1023 returnees and found that 27 percent of Indians and 34 percent of Chinese actually had green cards. And why are they retuning? Many of them cited personal reasons such as the difficulty of being separated from family and friends. But some 84 percent of the Chinese and 69 percent of the Indians—a vast majority with advanced degrees in engineering and management—cited better professional opportunities in their own countries, which have been liberalizing their economies. Many of them felt that America's best days were over whereas in India and China the best was yet to come. In other words, the crème-de-la-crème of the immigrants is telling the U.S.: "Thanks, but no thanks." This was unimaginable two decades ago when I came to this country. If you got a visa to come to the U.S., you bought a one-way ticket and never looked back. Returning home was for losers.

"To this day," President Obama thundered in his immigration speech, "America reaps incredible economic rewards because we remain a magnet for the best and brightest from across the globe." He couldn't have been more out of touch.

Low-skilled immigrants will likely return when the U.S. economy picks up again. But to bring back high-skilled immigrants, America's economy will have to do more than make a comeback. It will have to make a strong comeback. In fact, fixing the immigration system now is like fixing dinner after your guests have left.

Hence, President Obama should forget about "comprehensive immigration reform." It serves neither the interests of immigrants nor Americans. If anything, he should tattoo "It's the economy, stupid" on Rahm Emanuel's forehead to remind himself of the correct order of priorities. This is no time to get distracted.

Shikha Dalmia is a senior analyst at Reason Foundation and a biweekly Forbes columnist. This article originally appeared at Forbes.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Suki||

    There is an immigration problem. It is too hard to do it legally. The bigger problem is illegal immigration, that one is too easy.

  • Suki||

    Another problem is people dropping the term "illegal" from illegal immigration. Something Reason shares with Obama.

  • ||

    Indeed, I'm annoyed when the issues get intentionally blurred like that.

    She also sidesteps another issue. Open-borders advocates like to see massive illegal immigration as an unalloyed good, but it's hard to argue the economic benefit of adding more job-seekers when unemployment is so high.

  • ||

    ...which is, oddly enough, the principle reason the number of illegal immigrants has declined by a million over the last two years.

  • Jason||

    Open-borders advocates like to see massive illegal immigration as an unalloyed good

    Umm... wouldn't making immigration or even sojourning for unskilled workers legal effectively eliminate illegal immigration?

  • A is Awesome||

    Symantics, pshhh....

  • ||

    Well, yeah, but what's the effect on high unemployment when you add millions of job-seekers? Immigration is generally a good thing, but it's always possible to have too much of a good thing.

  • ||

    Are you talking skilled or un-skilled jobs? If unskilled, how many americans do you expect to see signing up to work night shift at a canning factory for minimum wage? Or work in the sun for 10 hours picking fruit? Or is it possible they'd just be more likely to get on welfare?

  • ||

    Another problem is people dropping the term "illegal" from illegal immigration.

    Almost as bad as dropping the term "fugitive" from fugitive slave.

  • MWG||

    +1

  • ||

    How are the numbers of illegals counted? If somebody can estimate that accurately why do we even bother with a census other than it being a Constitutional requirement? It always has amazed me as well how the government knows 'exactly' how much weed is grown in the US.

  • ||

    "We need the census so we know how many schools to build!"

    God forbid we use enrollment figures, right? What about those sweet, sweet Census Jobs?! Why do i hate Jobs?!

  • BeltwayLurker||

    Same with that stupid fucking bus commercial. Like ridership couldn't tell you.

  • DJF||

    “”””There is an immigration problem. It is too hard to do it legally””’

    More then a million people a year become US citizens and even more get visa’s so it must not be that hard.

  • Tman||

    Considering there are an estimated 12 million illegal immigrants in the country, clearly the quota is too low.

    Wider gates, Taller fences. Rinse, repeat.

  • DJF||

    Considering that Americans don’t want more then the quotas are fine, the illegals need to be deported.

  • Tman||

    Um, they do? Where did you hear that?

  • Jason||

    Considering that illegal immigrants are finding work, the quota is below what the economy needs.

  • BR||

    Well, they're finding work off-the-books and therefore at below-market prices. The demand at on-the-books wages would certainly be lower. There might even be enough labor here already for that level of demand.

  • fyodor||

    Yeah, and there might not be too, and probably not.

    Oh, and I know it's only semantics, but working off the books does not make one's wage "below market." To the contrary, commerce done while avoiding restrictive laws helps paint a clearer of the market.

  • BeltwayLurker||

    Off the books is market price, unfiltered by government noise.

  • BR||

    OK fine, I admit both of your points. The demand for imported labor would be less than it currently is, though likely non-zero. Still, a smaller problem is better than a bigger one.

    And fine, if you want to look at it that way then the illegals are working at market rates while the legal workers are forced to work at above-market rates. Switch the plus to a minus and a minus to a plus, it nets out to the same thing.

  • ||

    Isn't more to the point that we get to invite in skills we need?

    You own a house or apartment - do you let everyone in off the street or people that you want to visit?

    Why should the illegal immigrants be the ones to become citzens? Just because some leave close on our border? What about the ones from Africa?

  • ||

    Isn't more to the point that we get to invite in skills we need?

    Uh, when someone employs an immigrant -- legal or not -- that is exactly what is happening.

    You own a house or apartment - do you let everyone in off the street or people that you want to visit?

    People that I want to have visit. But I don't tell my neighbors who they can have in their houses or apartments. Do you?

  • Jason||

    A chart diagramming how to immigrate to the US.

    Based on that chart, how does a farm laborer come to the US to work legally?

  • Rhywun||

    And 990,000 of them got that privilege merely by being related to someone else already here. There is virtually zero chance for the motivated, productive individuals that restrictionists claim to value to remain here otherwise.

  • The Gobbler||

    Dumbest. President. Ever.

    Why do you think they won't release his college transcripts (which are likely inflated at that)?

  • ||

    The man did not get into Columbia, and then Harvard law school entirely out of affirmative action. He also did not become editor of the Harvard Law Journal for being an idiot.

    That being said, he is so blinded by his left-wing, big government good, free-enterprise-bad mentality, that he just seems like the dumbest president. BTW--if you missed the Carter years, Welcome Back.

  • A is Awesome||

    And the merits of Columbia and Havard educations can be debated. I'm an engineer so I find anything non-sciency as a major not as legitimate.

  • Heroic Mulatto||

    I'm an engineer so I find anything non-sciency as a major not as legitimate.

    Let me guess, you have Asperger's syndrome.

  • Jordan||

    +1

  • ||

    A makes an important point. Left wingers have really harmed the humanities by making everything PC. Sometimes it really seems like there is only one topic that is acceptable: how the US/West/White People/Jews/Christians are bad. Most papers and research subjects seems to boil down to that. Now they have their eyes turned toward the sciences. The aim is to get rid of the people who are good in science and replace them with people who are not so good, but have the right political attitudes. The Times recently had a piece about feminists trying to increase women scientists, not by helping them to acheive at the same level in math or physics or what have you, but by altering, that is, lowering the standards.

    If Bush had kept back his grades, it would be a scandal. There is obviously a good reason that obama does not release his, they must be really bad.

  • Rhywun||

    Ayyy, Mister Car-terr!

  • Tim||

    Nothing to see here, move along.

  • jtuf||

    Speed up the processing time for immigrants. Open diversity visas to people from all countries. Raise the number of diversity visas to 1 million per year.

  • jtuf||

    On a related note, does anyone know companies that are willing to sponsor immigrants with exerience using Computer Aided Design?

  • Hate Potion Number Nine||

    Why? Do you need someone to work for three cents a day?

  • Alan||

    Back in February while staying at a hostel (OK, *the* hostel) in Chicago, I met an African immigrant who had stopped to see Chicago on his way home. He was from a poor country and was educated (a lawyer), yet he saw better opportunities at home.

    That ought to tell Americans something, but it probably won't.

  • ||

    It tells me that he couldn't pass the bar in any of the 50 states.

  • ||

    I'm surprised that you're analysis doesn't conclude the obvious - that the more highly skilled H1B applicants aren't coming/applying to the US is the economy rather than our 'anti immigration' laws.

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