How Unskilled Immigrants Hurt Our Economy

Steven Malanga For City Journal (Part II of VI)

A handful of industries get low-cost labor, and the taxpayers foot the bill.

Hampering today’s immigration debate are our misconceptions about the so-called first great migration some 100 years ago, with which today’s immigration is often compared. We envision that first great migration as a time when multitudes of Emma Lazarus’s “tired,” “poor,” and “wretched refuse” of Europe’s shores made their way from destitution to American opportunity. Subsequent studies of American immigration with titles like The Uprooted convey the same impression of the dispossessed and displaced swarming here to find a new life.

If America could assimilate 24 million mostly desperate immigrants from that great migration—people one unsympathetic economist at the turn of the twentieth century described as “the unlucky, the thriftless, the worthless”—surely, so the story goes, today’s much bigger and richer country can absorb the millions of Librado Velasquezes now venturing here.

But that argument distorts the realities of the first great migration. Though fleeing persecution or economic stagnation in their homelands, that era’s immigrants—Jewish tailors and seamstresses who helped create New York’s garment industry, Italian stonemasons and bricklayers who helped build some of our greatest buildings, German merchants, shopkeepers, and artisans—all brought important skills with them that fit easily into the American economy.

Those waves of immigrants—many of them urban dwellers who crossed a continent and an ocean to get here—helped supercharge the workforce at a time when the country was going through a transformative economic expansion that craved new workers, especially in its cities. A 1998 National Research Council report noted “that the newly arriving immigrant nonagricultural work force . . . was (slightly) more skilled than the resident American labor force”: 27 percent of them were skilled laborers, compared with only 17 percent of that era’s native-born workforce.

Many of these immigrants quickly found a place in our economy, participating in the workforce at a higher rate even than the native population. Their success at finding work sent many of them quickly up the economic ladder: those who stayed in America for at least 15 years, for instance, were just as likely to own their own business as native-born workers of the same age, one study found. Another study found that their American-born children were just as likely to be accountants, engineers, or lawyers as Americans whose families had been here for generations.

What the newcomers of the great migration did not find here was a vast social-services and welfare state. They had to rely on their own resources or those of friends, relatives, or private, often ethnic, charities if things did not go well. That’s why about 70 percent of those who came were men in their prime. It’s also why many of them left when the economy sputtered several times during the period. For though one often hears that restrictive anti-immigration legislation starting with the Emergency Quota Act of 1921 ended the first great migration, what really killed it was the crash of the American economy. Even with the 1920s quotas, America welcomed some 4.1 million immigrants, but in the Depression of the 1930s, the number of foreign immigrants tumbled far below quota levels, to 500,000.

With America’s streets no longer paved with gold, and without access to the New Deal programs for native-born Americans, immigrants not only stopped coming, but some 60 percent of those already here left in a great remigration home.

Today’s immigration has turned out so differently in part because it emerged out of the 1960s civil rights and Great Society mentality. In 1965, a new immigration act eliminated the old system of national quotas, which critics saw as racist because it greatly favored European nations.

Lawmakers created a set of broader immigration quotas for each hemisphere, and they added a new visa preference category for family members to join their relatives here. Senate immigration subcommittee chairman Edward Kennedy reassured the country that, “contrary to the charges in some quarters, [the bill] will not inundate America with immigrants,” and “it will not cause American workers to lose their jobs.”

But, in fact, the law had an immediate, dramatic effect, increasing immigration by 60 percent in its first ten years. Sojourners from poorer countries around the rest of the world arrived in ever-greater numbers, so that whereas half of immigrants in the 1950s had originated from Europe, 75 percent by the 1970s were from Asia and Latin America.

And as the influx of immigrants grew, the special-preferences rule for family unification intensified it further, as the pool of eligible family members around the world also increased. Legal immigration to the U.S. soared from 2.5 million in the 1950s to 4.5 million in the 1970s to 7.3 million in the 1980s to about 10 million in the 1990s.

As the floodgates of legal immigration opened, the widening economic gap between the United States and many of its neighbors also pushed illegal immigration to levels that America had never seen. In particular, when Mexico’s move to a more centralized, state-run economy in the 1970s produced hyperinflation, the disparity between its stagnant economy and U.S. prosperity yawned wide.

Mexico’s per-capita gross domestic product, 37 percent of the United States’ in the early 1980s, was only 27 percent of it by the end of the decade—and is now just 25 percent of it. With Mexican farmworkers able to earn seven to ten times as much in the United States as at home, by the 1980s illegals were pouring across our border at the rate of about 225,000 a year, and U.S. sentiment rose for slowing the flow.

But an unusual coalition of business groups, unions, civil rights activists, and church leaders thwarted the call for restrictions with passage of the inaptly named 1986 Immigration Reform and Control Act, which legalized some 2.7 million unauthorized aliens already here, supposedly in exchange for tougher penalties and controls against employers who hired illegals. The law proved no deterrent, however, because supporters, in subsequent legislation and court cases argued on civil rights grounds, weakened the employer sanctions.

Meanwhile, more illegals flooded here in the hope of future amnesties from Congress, while the newly legalized sneaked their wives and children into the country rather than have them wait for family-preference visas. The flow of illegals into the country rose to between 300,000 and 500,000 per year in the 1990s, so that a decade after the legislation that had supposedly solved the undocumented alien problem by reclassifying them as legal, the number of illegals living in the United States was back up to about 5 million, while today it’s estimated at between 9 million and 13 million.