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PRESENTATION BY
UCSD POLITICAL SCIENCE PROFESSOR
WAYNE CORNELIUS
SATURDAY, JUNE 24, 2006
There are plenty of threats to the American empire, but immigration, in my estimation and I think by any reasonable construction of reality, is not among them. On the contrary, the fact that we are so successful in the global competition for labor is one of our greatest strengths.
Our competitive edge is perhaps most evident in the area of highly skilled immigrants. In our ability to attract and retain high-skilled, professional immigrants, we currently rank fourth in the world, behind Australia, Canada and Switzerland. We could be doing even better in this competition if we didn’t set artificially low limits on this kind of immigration. In recent years, we’ve distributed 65,000 so-called H-1B visas a year for highly-skilled immigrants, a supply that is exhausted on the very first day they become available each year.
We are also conspicuously successful in attracting low-skilled immigrants. These workers have allowed labor intensive industries like construction, hospitality, and food processing to grow at higher rates than would otherwise have been possible.
Most economists, and I emphasize most, believe that large-scale immigration, both low-skilled and high-skilled, is essential to assure robust economic growth, dampen inflationary pressures, and finance intergenerational transfer systems like Medicare and Social Security. Because of our low fertility rates, our total labor force growth has already dropped from 5% a year during the 1970s to less than 1% a year at present. With a national unemployment rate of 4.6% (and a mere 3% in cities like San Diego, Las Vegas, and Phoenix), we are below what economists conventionally define as “full employment.” If it were not for immigration, today’s labor force would be contracting by 3-4% a year, a figure proving that, without large numbers of immigrants, we’d be seriously overheating our economy.
The longer-term implications of immigration for the strength of the U.S. economy and our position in the world shouldn’t be underestimated. Like all other developed countries, the U.S. has a population aging problem. We are getting our young, entry-level workers largely from immigration. Whereas 35% of our male, foreign-born population fell in prime working age categories in 2000, this is only true for 24% of the native-born male population.
Europe and Japan have a huge problem in this regard, not just because their fertility rates fall well below replacement levels, but because, for political reasons, they don’t have expansionary immigration policies. And these countries already have very large imbalances in their health care and pensions systems. They’re going to end up on the back burner of the world economy, in part, because their immigration policies are too restrictive.
In recent years, immigrants have accounted for more than 90% of labor force growth in the Midwest and the Northeast, regions that have experienced a native-born population implosion both because of their low fertility and high out-migration rates. Newly arriving immigrants increasingly head for these labor-short parts of the country and for cities in the Southwest, the Southeast, and the Rocky Mountain states that all have robust job growth. Mexican immigrants in particular are dispersing themselves to a much greater geographic extent than previous generations did, a very healthy development that keeps immigrants from piling up in already saturated labor markets like Los Angeles.
Today’s immigrants, like those before them, are filling particular niches in the U.S. economy. In recent years, they have accounted for most of the employment growth in low-skilled, manual, repetitive, and dangerous occupations like cashiers, janitors, kitchen workers, maintenance workers, construction workers, and mechanics. In California, immigrants have come to dominate virtually all low-skilled job categories. They comprise over 90% of the state’s agricultural workers, two-thirds of the construction workers, and 70% of cooks.
At a national level, illegal immigrants are most heavily concentrated in service occupations, followed by construction and manufacturing. It’s actually a common misconception that Mexican immigrants in particular are agricultural workers. In fact, the latest stats and estimates show that only about 4% of Mexicans working in this country today are still in agriculture (although they comprise about ¼ of all farm workers in the country). The vast majority are in urban service and construction and manufacturing jobs (illegal immigrants comprise 17% of all cleaning workers, 14% of all construction workers, 12% of all food preparation workers).
It’s important to recognize that, at this point in time, the demand for foreign-born labor in this country is so deeply embedded in our economy as to have become not only structural, but also almost recession-proof. The studies we’ve done in San Diego over the last 20 years have shown that, when we have a recession, employers don’t shed their foreign workers; instead, they continue to hire immigrant workers. The job applicant pools of firms that depend heavily on immigrants no longer include appreciable numbers of young native-born workers. In most cases, the natives haven’t been in those pools for 10, 15, 20 years. That’s partly because there aren’t enough young, native-born workers coming into the labor market, but it’s also because of changing societal attitudes toward manual labor.
Many of the immigrant-dependent firms that we have been studying in California have already tried doing without or getting by with fewer immigrant workers, but they don’t really find good substitutes. Some of them could reduce their labor requirements through further mechanization, but that option is really limited to the agricultural industry, and not available to firms and services, retail and construction.
Are established immigrants and their offspring stuck in the kinds of dead-end, low-wage, manual jobs typically held by newly arriving immigrants? The data show that while many first-generation immigrants are stuck, later generations are doing a lot better. From the first to the second-generation, there is considerable movement out of low-wage service, construction, and agricultural work and into white-collar occupations. Even within the first generation, there is significant income improvement over time, as immigrants gain new job skills, improve their English, and gain job seniority.
But there’s still a big gap between immigrants and natives. That gap is persistent, but it has closed a lot in the last 10 years. The biggest gaps, of course, are between Mexican-origin migrants and the native-born population. But even for Mexicans, the big picture is one of progress. There’s not much change in occupational status among first-generation Mexican immigrants, but there’s a big jump in the second and third generations. And, in terms of educational attainment, the U.S.-born children of Mexican immigrants are doing much better than their parents. They have much higher high school graduation rates. High school dropout rates are still much too high and college graduation rates are still low, but there is significant progress in both access to education and, at least, high school completion.
A major reason why the second and third-generations are doing better in terms of occupational mobility is English proficiency. The transition from Spanish dominance to English dominance is occurring in two generations, compared with European immigrants at the turn of the century who typically took three generations to accomplish what today’s Latino immigrants are doing. These people don’t need Congress to tell them that English is the national language. They recognize that English proficiency is essential to their economic success in this country and certainly to the success of their children.
Sociologists at UC-Irvine have found that, among Mexican immigrants and their children, cultural integration is actually running ahead of their economic incorporation. They are opting out of the Spanish-language media in surprising numbers. And they are buying into American popular culture and the English language.
Now, it’s commonly believed that most illegal immigrants are employed in the underground economy, that they’re paid in cash, off the books by employers who are eager to avoid paying payroll taxes on them. But all major studies of Mexican immigrants done in the last two decades have found that a majority of these workers are actually employed by mainstream, formal sector firms. They get regular paychecks and they have taxes deducted from their wages. This is what we found among more than 700 Mexican immigrants who were interviewed by my students and I earlier this year, after they had returned to their homes in the State of Yucatan. Three-quarters had had taxes either deducted from their wages or had filed an income tax return or both, so the tax withholding rate was about 72%. That’s clear evidence that they are not underground economy workers.
One final point about economic incorporation: Mexicans and other first-generation immigrants in this country today have extremely high labor force participation rates. Illegal immigrants are the most fully employed, with 94% of the men in the workforce. That compares very favorably with native-born workers, who have 83% of males and 72% of females in the workforce. The point is simply that, these workers may be low-skilled, but they have extremely high employment rates.
So what’s the problem? For most Americans as well as the immigrants themselves, that’s the problem. Illegality. An estimated 30% of all foreign-born people in the country today are here illegally. Over half of them entered clandestinely, but up to 45% of them are visa overstayers, people who entered the country on short-term tourist, student, or even shopping visas and overstayed them. I would point out that the illegal component of immigration to Europe is just as large, if not larger, than in the U.S. Europe is currently absorbing about a ½ million net new immigrants from all over the world each year. Even Japan has an estimated 300,000 illegal immigrants working there.
Much of this is manufactured illegality. It is a direct function of national immigration laws and policies that severely restrict the number of legal entry opportunities, particularly for long-term workers. Since 1993, the U.S. government has been seriously committed to reducing the illegal component, mainly through tighter border enforcement. We have spent more than $20 billion on this project since 1993. We continue to spend at a rate of more than $6 billion a year. We have tripled the size of the Border Patrol and President Bush has promised to add another 7,000 agents during the next two years. Congress has voted to double the present size of the Border Patrol and to build hundreds of miles of new fences and vehicle barriers. Under the House bill passed last December, we would go from 75 miles of fortified border at present to 700 miles.
Our strategy since 1993 has been to concentrate border enforcement in four heavily transited segments of the border, from San Diego in the west to the south Rio Grande Valley. The logic of this strategy is quite simple: you deter illegal crossings by forcing migrants into remote, hazardous areas between areas that have been heavily fortified with a 10-foot primary fence and a 15-foot high secondary fence. The fences can be tunneled under, cut through or climbed over. So these areas are illuminated with high-intensity, stadium-type lighting and monitored with remote video surveillance systems. We’ve even deployed Predator B unmanned aerial vehicles (drones) to surveil the Arizona desert, at a cost of $14 million each.
What effect has all this hardware, technology, and manpower had on the behavior of migrants? When we started this period of tighter border enforcement, the Border Patrol was apprehending slightly fewer than 1 million people. Last fiscal year, they were making slightly more than 1 million apprehensions, and the trend continues to rise.
During this period of tighter border enforcement, the number of illegal immigrants living and working in the U.S. has more than doubled. Migrants have simply detoured around the heavily fortified segments of the border. It’s no surprise that, when we squeeze the border in San Diego and El Paso, it bulged in central Arizona, where for hundreds of miles, the only physical barrier is a three-foot high, barbed wire fence. But after reinforcing the central Arizona border, last fall traffic began shifting westward to Yuma and San Diego again. This demonstrates that partial militarization of the border only rechannels illegal migration. It doesn’t reduce it overall. If the probability of apprehension isn’t uniformly high, migrants will continue to cross where the risk of detection is still relatively low. From the U.S. southwest to southern Europe to the Chinese/Russian border, the evidence is overwhelming that anything short of complete militarization of borders won’t stop determined economic migrants.
Another generalization that’s supported by the cross-national evidence is that the unintended consequences of border enforcement are almost invariably more important than the intended consequences. The key unintended consequences are these: (1) fueling the people-smuggling industry; (2) making borders more lethal; and (3) increasing rates of migrant settlement in the immigrant receiving countries.
Stronger enforcement along the U.S.-Mexico border has been a bonanza for people smugglers. We have made smugglers essential to a safe and successful crossing. Our research in Mexico found that over 90% of illegal migrants are hiring smugglers to get them across. And the fees that smugglers can charge have more than tripled during the period of tighter border enforcement. When President Bush started the deployment of the National Guard [to the border], smugglers immediately raised their prices by $1,000. So some of them are now charging $4,000 a head, rather than the going rate of somewhere between $2,000 and $3,000 a head. That’s what the National Guard deployment was worth to them.
This is what it costs to be smuggled into the United States from different parts of the world. People being smuggled in from Fujian, China are paying $60,000. Mexicans, at least before the National Guard deployment were paying up to $3,000; other South Americans, $12,000; and Indians, $30,000. But even at these prices, it’s still economically rational for migrants and often their relatives living in the U.S. to dig deeper into their savings and to go deeper into debt to finance illegal entry. We’ve also succeeded in bottling up, within the United States, a great many migrants who would otherwise have continued to come and go across the border, just as their parents and grandparents once did. Given the high cost and the high physical risks of illegal entry today, they have a strong incentive to extend their stays in the United States, and the longer they stay, the more likely it is that they will settle permanently.
And by forcing crossings to be made in extremely hazardous mountain and desert areas, the current border enforcement strategy has drastically increased the number of fatalities among clandestine immigrants. We set a new record last year of 516 deaths. The actual total was probably twice that, because these statistics are only for discovered bodies. Since 1995, more than 3,700 migrants have perished from dehydration in the deserts, freezing to death in the mountains, and drowning in border irrigation canals. That’s 1,000+ more people than died in the Twin Towers in New York, and it’s 16 times as many deaths as can be attributed to the Berlin Wall during its 28 years of existence. So we have created the most lethal land border in the world, without question.
There’s no evidence that tougher border enforcement is an effective impediment to illegal entry. Our interviews with returned migrants show that a higher percentage of them today are getting caught: 38% in the last 5 years, as opposed to 21% being caught before we started increasing our border enforcement, but almost two-thirds of them are still getting in on a first try. And, if they are caught, they keep trying until they succeed. Our studies find that between 92% and 97% of migrants eventually succeed in getting in on the same trip to the border.
Migrants also know what they’re up against long before they get to the border. Indeed, many of the migrants we’ve interviewed in the last two years personally knew someone who had died trying to cross the border clandestinely. It’s hard to overestimate the determination of the people who take these risks. Here’s how one young man that I interviewed about 4 months ago in the Yucatan put it: “We don’t care if we have to walk 8 days, or 15 days. It doesn’t matter the danger we put ourselves in. If and when we cross alive, we will have a job to give our families the best.”
To summarize, here’s what we can say of our 13-year experiment with tougher border enforcement: (1) we have redistributed illegal entries; (2) the cost of illegal entry has been greatly raised; (3) there is more permanent settlement of illegal immigrants in the U.S.; and (4) there is a much higher mortality rate. There is no evidence that we are deterring people from leaving their homes in the first place, going to the border and trying to gain entry. There’s no evidence that once they’re apprehended, if they’re apprehended, they get discouraged and go home. There’s no evidence that the stock of illegal immigrants in the country has been reduced – quite the contrary.
Is there a better way? I have four main recommendations: (1) focus less on walling ourselves off from the rest of the world, especially from Mexico, and more on increasing our rate of return on immigration by integrating immigrants more proactively and thereby enhancing the human capital that they bring; (2) legalize as many as possible of the unauthorized immigrants already here and encourage them, eventually, to naturalize; (3) provide more legal entry opportunities for new immigrants, both low-skilled and high-skilled, temporary and permanent; and (4) create alternatives to immigration in sending areas.
We really do need a proactive immigrant integration policy, a program that accelerates immigrants’ economic mobility. For starters, we could make English as a Second Language (ESL) training much more widely available to adult immigrants who want and need this training. Right now, there is a huge, unmet demand for ESL instruction in every major city in the country that receives large numbers of immigrants. If we’re serious about turning new immigrants into taxpayers who earn enough to finance the public services that they and their children are consuming, we need to do more to increase their income earning capacity, and nothing will do that faster than learning English.
Secondly, we need to legalize as much of the undocumented population as the political traffic will bear, which will reduce their vulnerability to exploitation, improve their mobility in the labor market, and make them full stakeholders in the society and the polity.
Third, we need to reduce the need to migrate to this country illegally, and that means greatly increasing the number of employment-based visas, permanent resident visas or green cards that we issue, particularly to low-skilled workers. The bill that passed the Senate [in May 2006] would do that, by more than tripling the current number of employment-based visas from 140,000 per year (of which only 10,000 usually go to low-skilled workers). In the last year that we have statistics for, only 3,200 Mexican low-skilled workers got employment-based visas. If that’s not manufactured illegality, I don’t know it. In the same year that we gave out 3,200 job-based visas, 400,000 Mexicans were added to the U.S. workforce. That’s what I mean by “manufactured illegality.”
And, last, we need to seriously address the U.S.-Mexico income gap. We need to create meaningful alternatives for a much larger number of potential migrants still in Mexico. Narrowing the income gap will require deeper economic reforms on the Mexican side. It will require improving the tax effort, modernizing labor laws, and opening up the state run energy and electricity sectors to private investment.
Trade alone won’t do it. NAFTA was supposed to have narrowed the income gap, but it has had the opposite effect. While per capita income in Mexico has risen since NAFTA, it has risen even more rapidly in the U.S. Today, annual per capita GDP in the U.S. is more than 6 times as high as it is in Mexico, and the real wage differential is between 8 to 1 and 11 to 1 for most low-skilled jobs.
Study after study has shown that it’s the real wage differential, more than anything else, that drives Mexican migration to the U.S. Only 4 or 5% of migrants in most studies report that they were openly unemployed before going to the U.S. Our study of migrants who returned to the Yucatan this year found that only 1% had been unemployed before migrating to the U.S. for the first time. Micro-development programs targeted at high immigration areas (e.g., programs to support small business development, create more adequate financial services infrastructure in rural areas, and expand road and telecom infrastructure) have the potential to create better quality jobs in the places where they’re needed to reduce unwanted migration.
I’m well aware that the U.S. is no longer in the business of Marshall Plans, but a creatively-designed, bi-nationally financed program of targeted development, with funds administered by the World Bank or the InterAmerican Development Bank, is an idea that deserves serious consideration. This is, after all, the kind of development assistance that was provided, massively, by the northern European countries to Spain, Greece, and Portugal both before and after those countries entered the E.U. It made possible a step-level increase in GDP in those southern European countries. It cut the north-south wage differential by half. Eventually, it turned all of the southern-tier E.U. countries into net importers of labor. The developmental approach to immigration control worked in Europe and it could work in North America, if we were to get serious about reducing the supply of potential migrants.
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