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ECONOMICS: An economist's perspective on immigration
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| Jack Reardon
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By JACK REARDON
Of the world’s 290 million immigrants, the United States is home to 37 million, the most of any nation. Immigrants account for 12.5 percent of our population, up from a low of 4.7 percent in 1970, and slowly inching towards the record 14.7 percent reached in 1910.
With more immigrants living in the United States than at any time in our history, immigration has become a hot-button issue.
Since 2002, approximately 1.1 million immigrants have entered the United States each year on average, with at least half as much entering illegally, either by overstaying their visa or entering without authorization.
It is estimated that between 12 and 20 million immigrants currently reside in the United States, of which 60 percent are from Mexico. Barring any restrictive and punitive legislation, this trend should continue.
Mexico is the leading country of origin for U.S. immigrants (30 percent), followed by China (5 percent), the Philippines (4 percent), India (3 percent) and Vietnam (3 percent).
Seventy percent of immigrants live in just seven states: Illinois, Texas, California, New York, Florida, New Jersey and Pennsylvania. Currently one in five Americans is either an immigrant or a child of an immigrant.
By 2050, one-fourth of the American population will be Hispanic.
Here in Wisconsin, immigrants constitute 4.1 percent of our population, up from 3.6 percent in 2000. Mexicans comprise the largest number of total immigrants at 28 percent, followed by Laotians (9 percent), Germans (7 percent), Indians (4 percent) and Canadians (4 percent).
It is estimated that between 75,000 and 115,000 illegal immigrants currently reside in Wisconsin.
Given the failure of Congress and the Bush Administration to enact an immigration bill — symptomatic of a deep-seated American ambivalence towards immigration — it is surprising that economists, for the most part, agree on the beneficial aspects of immigration.
Several reasons are given.
First, immigration offsets declining birthrates, a problem affecting all western nations. By 2035, one of every four Americans will be over the age of 65, increasing the stress on Medicare and Social Security, while increasing provisional expectations burden of younger workers.
In addition, a declining birthrate means a shrinking population, job loss and economic dislocation. The United States is one of the few western nations expected to increase its population during the next 50 years, largely due to immigration.
Second, immigrants actively participate in the labor force and hence contribute to the local economy. According to the Bureau of Labor Statistics, foreign-born workers (which includes refugees, legal and illegal immigrants) account for 15.3 percent of the U.S. civilian labor force.
Foreign-born men have an 84 percent labor force participation rate compared to 72 percent for native-born men, although foreign-born women only have only a 55 percent labor force participation rate compared to 60 percent for their native-born counterparts.
One of every nine immigrants is self-employed, the same percentage as native-born.
Thirty-one percent of the foreign-born labor force has a college degree, compared to 33 percent of native-born residents.
At the other end of the spectrum, 28 percent of the foreign born labor force has not completed high school, compared to only six percent of the native-born.
Almost two-thirds of the immigrants from Mexico, El Salvador and Guatemala, however, do not have a high school education and only six percent have a college degree.
While economists take an overall positive view of immigration, the debate, especially what to do about illegal immigrants, can only be resolved through the political process.
At the same time, economists recognize the right to uphold the sanctity and security of our borders and to ensure equitable access to our domestic resources, hence the need for quotas and some type of punitive action for violators of the law.
Emigration will persist as long as there are wars, revolutions, political and religious persecution and differences in economic growth. While economists can do little about the former, ensuring growth and eradicating poverty is our central concern.
Sustained emigration results in brain drain and loss of human capital, which in turn lessens economic growth. Since a preponderant cause of the decision to emigrate — surely one of the most wrenching decisions a person will ever have to make — is the presence of friends and relatives in the host country, once begun, emigration can continue in a never-ending cycle.
Any efficacious solution to immigration must recognize the causes of emigration as well as the effects of immigration, peppered with a dash of humanitarian concern for the less fortunate.
Jack Reardon teaches economics at the University of Wisconsin - Stout.
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