September 28, 1999

A Close Look
At the Newest Newcomers


The U.S., George Borjas observes, is "heaven's door," through which much of the world's humanity wishes to pass. Mr. Borjas would like to man that door, waving through the most virtuous petitioners and, no less important to him, minding heaven's capacity at the same time.

But frankly, he lacks the qualifications for the job. For one thing, he does not appreciate fully one characteristic of American exceptionalism: that we are a nation of immigrants. However shopworn the phrase may be, it is also a defining principle of American identity. Even when we are inclined to surrender in times of distress to mean impulses, moving to close "heaven's door" or to serve our own economic ends in narrow (and often counterproductive) ways, Americans never seem to lose their innate empathy for the immigrants who seek to join them.

No less important, Mr. Borjas advances economic arguments that are critically flawed -- on current evidence -- making his qualifications as a gatekeeper even more dubious.

Mr. Borjas's principal thesis is this: Thanks to the 1965 Immigration Act, which shifted the national origins of legal immigrants toward poor countries, we have been attracting immigrants who are increasingly unskilled. Through wage reductions, this new population is producing a massive shift in income distribution away from unskilled native workers.

What is more, the assimilation rate of these new poor-country immigrants -- and hence the rate of improvement in their incomes -- is slower than that of earlier immigrants, adding to ghettoization and ethnic friction. National interest thus requires that we undo the damage of the 1965 act and turn to a point system, like Canada's, which would give people more qualifying points for entry if they are skilled.

Luckily, Mr. Borjas's alarmist analysis, presented at length in "Heaven's Door," is less than persuasive. Take the crucial question of skills. In earlier writings, Mr. Borjas had virtually asserted that the absolute skill levels of legal immigrants had declined since the 1965 act; he was promptly refuted, convincingly in my view, by the late Julian Simon, who showed, in a co-authored paper, that the immigrant education levels at entry had in fact risen from the 1960s through the early 1990s.

Now Mr. Borjas has retreated to arguing for only a relative decline in the skills of immigrants -- relative, that is, to the skills of native workers. Here, a devastating blow has just been dealt by three well-known immigration experts: Guillermina Jasso, Mark Rosenzweig and James Smith. They have used INS (instead of Census) data to show that the absolute skill levels of immigrants have exceeded those of natives for much of the period 1972-95 and that the relative skill levels of immigrants have also risen since the mid-1980s.

Mr. Borjas's larger economic claim, that immigration drives down wages, does not survive scrutiny either. Most reputable labor economists, in fact, have long puzzled over the minuscule effect on wages of even large-scale immigration (if there is any effect at all, which is debatable). We now have an explanation.

Added workers can be absorbed in two ways. Either wages decline so that every cost-conscious producer increases the labor-intensity of production, substituting labor for capital and adding workers. Or, in an optimistic scenario, extra workers are absorbed without such a substitution. Economists call this scenario the "output-mix effect." Insofar as it operates, wage decline is avoided or, at the very least, moderated. As it happens, the economists Gordon Hanson and Matthew Slaughter have recently demonstrated that significant output-mix changes, favoring labor-using activities, have been associated with increased immigration. Thus wages are not driven down as Mr. Borjas suggests.

Mr. Borjas's assertions about ethnic ghettos, in another part of "Heaven's Door," seem compelling until one notices that his view is terribly static. It was perhaps inevitable that, as the American population diversified to include more non-English-speaking non-Europeans, new immigrants would turn to one another more than previous immigrant generations had. But this "ghettoization" has also been encouraged by the ideology of liberal multiculturalism, which has produced (along with some positive effects on the core college curriculum) misguided programs, like bilingual education.

Already, though, a counter-response is evident. Last year, Hispanic parents in California overwhelmingly supported Proposition 227, which brought bilingual education in that state to an end. As Hispanics grow in numbers, and become politically more active, their perceptions of American possibilities will sharpen, increasing their resolve to join the mainstream. In short, economically motivated assimilation will reassert itself.

Not surprisingly, Mr. Borjas, who teaches at Harvard's Kennedy School, has become a kind of beacon to anti-immigrationists, especially in certain precincts of the Republican Party. Alas, since he plays the "our-poor-get-hurt" tune, he has now begun to seduce liberal Democrats as well. This is a pity. If we are to revise our legal immigration policies yet again, it is important that the charges leveled at them are based on robust empirical arguments. Mr. Borjas's claims, I'm afraid, do not meet that test.

Mr. Bhagwati is a professor of economics at Columbia University. His most recent book is "A Stream of Windows: Unsettling Reflections on Trade, Immigration, and Democracy" (MIT Press).