Immigration: Tough questions, answers
The Milwaukee Journal Sentinel
Page 8
(Copyright 1999)

Heaven's Door: Immigration Policy and the American Economy. George J. Borjas . Princeton University Press. 263 pages. $27.95.

In "Heaven's Door," Harvard immigration expert George J. Borjas examines the impact immigrants have on Americans' economic well- being.

A Cuban-born economist who migrated here as a child, he has written widely on the subject and advised former California Gov. Pete Wilson on how to reduce the costs of immigration.

Borjas argues that America should choose immigrants based on their skills and national origin instead of admitting them largely based on unifying families. He compiles an impressive array of data, making this book a worthwhile, if spotty, contribution to the immigration debate.

We are in the middle of what Borjas calls "the Second Great Migration."

America admits more than 1 million immigrants each year, slightly more than the 900,000 annual average from 1880 until 1924: the Great Migration years. Foreign-born people make up about 10% of the population now, compared to 15% in the early part of the century.

Borjas argues that even though the percentage of immigrants is relatively smaller now, it is still more than this country can handle.

Immigrants worsen income inequality in this country, he claims, because they compete with low-income workers.

Every time the population increases by 10%, he argues, wages fall by 3%. By his calculation, immigration transfers $160 billion from the pockets of workers to employers each year.

Borjas argues that immigrants are ill-suited to compete in today's economy.

He is particularly concerned with the increasing likelihood of immigrants to cluster in "ethnic enclaves" that make them less likely to assimilate and succeed in the job market. He also presents evidence that the skill level of immigrants is falling and that the gap between the wages and skills of immigrants and natives is widening.

He further shows that immigrants are increasingly more likely to receive welfare than are Americans; last year, 22% of immigrant households received some sort of welfare, compared to 15% of the native population. He also shows that immigrants' economic success can be correlated with their national origin.

These findings are clearly disturbing.

His solution is that we choose immigrants by skills and national origins. Borjas proposes a "point" system like that used in Canada, Australia and New Zealand, where immigrants receive points for their profession, age, number of relatives here, language skills and years of work experience.

How this would help is not clear. We already make special allowances for skilled workers through the H1-B visa program. And it is hard to believe that bureaucrats could decide very quickly where jobs are needed better than the market can.

Moreover, much of the economic benefit of migration comes because immigrants do jobs different from those that natives do. Borjas notes this classic economic reality but then fails to flesh out the issue of whether immigrants take jobs that Americans would prefer not to do at the going wage.

Despite an array of charts and graphs as evidence, Borjas often spends more energy chipping away at evidence of immigration's economic benefits than he does in proving that immigrants hurt this country.

For example, Borjas calculates that in 1998 immigrants increased the income of the native population by about $8 billion, or $30 per American. He immediately deems that number to be too small to matter.

In another example, he concedes that labor-intensive businesses will move to cities populated by immigrants, creating more jobs and a floor under factory wages. At the same time, immigrants may increase the wages of other workers -- say, managers in the factories. But he downplays these benefits.

Borjas takes a narrow view of Americans' economic interests, failing to fully account for changes in a globalizing economy.

He counts possible fiscal costs and lower wages, but does not count the additional taxes that corporations might pay from higher profits. Nor does he discuss the fact that if wages stay low, then inflation -- which hurts the poor more than the rich -- is less likely to kick in. With low inflation, interest rates can stay low, boosting investment and creating jobs.

Finally, his concern with the issue of income inequality seems to fall largely on the shoulders of immigrants when many other factors come into play. If these factors had been discussed, this would be a more complete account of immigrants in the American economy.

------------ Michele Wucker, a New York-based writer, is the author of "Why the Cocks Fight: Dominicans, Haitians and the Struggle for Hispaniola."