How Immigration Re-Slices the American Pie

By Peter Skerry

The Washington Post, Thursday, October 28, 1999; Page C02


Immigration Policy and the American Economy

By George J. Borjas

Princeton Univ. 263 pp. $27.95

George Borjas's "Heaven's Door" is a tour de force on the economics of immigration. In a policy area where emotion or ideology usually overwhelms analysis, this is a stunning piece of research--nuanced, lucid and forceful. Yet as a guide to immigration politics and policy, "Heaven's Door" is much less rewarding.

With this book, Borjas, an economist at Harvard's Kennedy School of Government, secures his place as the preeminent student of the economics of immigration. In scores of popular and scholarly articles, he has for some time now been highlighting the declining skills of newcomers arriving here. Now he presents a full-blown analysis and critique of U.S. immigration policy. This is a tough but fair-minded book, not a mean-spirited diatribe. As Borjas tell us, at the age of 8 he himself arrived in Miami with his widowed mother a week before the Cuban missile crisis shut down the "freedom flights."

Borjas's argument is simple and persuasive, arguing that the primary effect of immigration is not its overall contribution to the economy. He estimates that in 1998 immigration increased the national income by about $8 billion--less than $30 per native-born person. And even these modest gains are almost certainly wiped out by the costs of services to immigrants.

But if immigration doesn't much affect the size of the national economic pie, it does affect how it is cut up. Borjas demonstrates that immigration generates enormous wealth for employers and the highly skilled at the expense of unskilled and disadvantaged natives. Specifically, he estimates that "almost half of the decline in the relative wage of high school dropouts may be attributed to immigration." Black Americans in particular are big losers, with immigration reducing the income of the average native black person about $300 per year.

Borjas's policy proposals follow from this analysis. He argues against the present system of awarding visas overwhelmingly on the basis of ties to family members already here and for a new system based on immigrant skills. He also argues for a reduction in overall numbers, to around 500,000 legal immigrants annually. Yet in addition to these, he favors generous refugee admissions.

As for illegal immigration, Borjas advocates stiffer penalties on those who employ illegal aliens. He comes as close as he can--without actually doing so--to endorsing a "national identification system" that would enable employers to reliably distinguish legal from illegal workers. But he would go further and impose stiff financial penalties on illegals themselves, and even suggests seizing their assets before deporting them.

Whether or not one agrees with such proposals, questions arise as to how realistic they are. Borjas correctly argues that stemming illegal immigration is critical to any overall reform. Yet he has nothing to say about how those stiff penalties will be imposed on employers who have repeatedly persuaded Congress to soften them. As for his proposals for getting tougher on illegal immigrants, they show a surprising naivete. The political will for harsher treatment of illegals is just not there. And even if it were, moving in that direction would be extremely divisive and imprudent.

This highlights a revealing blind spot in Borjas's understanding of the politics of immigration. One would scarcely learn from his analysis that a major obstacle to stemming illegal immigration is the inconvenience any such effort imposes on ordinary Americans, many of whom are in any event imbued with the notion that we are a nation of immigrants. Instead, Borjas points to "powerful interest groups" that have "considerable financial incentives . . . to ensure that the current policy remains in place." Indeed, he concludes that "the political lines . . . are clearly drawn and "that the immigration debate is best viewed as a political struggle between those who win and those who lose."

Yet this is simply not true. One would never know from Borjas that an important force blocking reform is immigrant groups themselves. Nor would one realize that significant roles in maintaining the status quo are played by the Catholic Church and human rights organizations, which see themselves as champions of the very disadvantaged who, Borjas demonstrates, lose from current policy.

Borjas argues persuasively that the economic benefits of immigration go to a few well-organized interests, while the costs are borne by the unorganized many. And as an economist he explicitly ignores all costs and benefits that are not quantifiable. But as a policy analyst this leaves Borjas ignoring the large questions--the impact of immigration on the environment, how immigrants are changing our sense of national identity--that for many Americans are at the heart of the immigration debate.

Yet despite such shortcomings, this is an enormously impressive book. In no small part this is due to the clarity and honesty of an analysis that allows us to learn from it while at the same time gauging its limitations.

Peter Skerry, a senior fellow at the Brookings Institution who teaches political science at Claremont McKenna College.

Copyright 1999 The Washington Post Company