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« Back to Immigration: Curse or Blessing? (Part One) main page    Transcript for: Immigration: Curse or Blessing? (Part One)THINK TANK WITH BEN WATTENBERG#1130 IMMIGRATION PART ONE FEED DATE: October 23, 2003 GEORGE BORJAS & DANIEL GRISWOLD Opening Billboard: Funding for this program is provided by... (Pfizer) At Pfizer, we’re spending over five billion dollars looking for the cures of the future. We have 12,000 scientists and health experts who firmly believe the only thing incurable is our passion. Pfizer, life is our life’s work. Additional funding is provided by the Lynde and Harry Bradley Foundation, the John M. Olin Foundation, the Bernard and Irene Schwartz Foundation, and the Smith Richardson Foundation. Hello, I’m Ben Wattenberg... 'Give me your tired, your poor, your huddled masses yearning to breathe free...' those words, written by the poet Emma Lazarus, and inscribed at the base of the Statue of Liberty, declare that America is a nation of immigrants. But as long as we have had immigration, we have had heated debates about immigration policy. Today is no exception. What rights should illegal immigrants have? How many immigrants should America accept? From where? How do we remain a beacon of freedom and protect our national security at the same time? To find out, Think Tank is joined by... George Borjas, Professor of Economics and Social Policy at the John F. Kennedy School of Government, Harvard University and author of Heaven’s Door: Immigration Policy and the American Economy. And... Dan Griswold, associate director of the Cato Institute’s Center for Trade Policy Studies and author of the study Willing Workers: Fixing the Problem of Illegal Mexican Migration to the United States. The Topic Before the House: Immigration, Curse or Blessing, Part One. WATTENBERG: Back in I believe it was 1982 there was this commission on Social Security which was co-chaired by Senator Dole and Senator Moynihan. And Pat Moynihan started out the proceedings as I understand it, he said, 'Look, let’s agree on the data and then we can have our own opinion. But let’s not be talking about my numbers, your numbers.' So let’s try to get some ballpark numbers at least on - on the numbers and the first number is what is the number and percent of foreign born in American today? BORJAS: Roughly speaking it’s around twelve percent of the population, which is slightly over thirty million people or so. That would be in total. That’s the people who are counted by the Census Bureau. That includes both legal immigrants and illegal immigrants. WATTENBERG: Right. So - so - so it - it’s - it’s what percent? BORJAS: Twelve - twelve percent. WATTENBERG: Roughly speaking. GRISWOLD: Twelve percent. That’s correct. WATTENBERG: Now of those, how many do we estimate are illegal immigrants? GRISWOLD: Well by its very nature it’s difficult to estimate, but the - the former INS estimates about eight million and they do a residual count. They know how many people are supposed to be here legally; they count how many are foreign born and then they subtract and find the difference and they determined it’s about eight million undocumented or illegal people here. BORJAS: As of 2000. And they also estimate that the number’s growing at the rate of three hundred to four hundred thousand people per year. GRISWOLD: Yeah. BORJAS: So... WATTENBERG: Once again it’s very hard to count illegal... BORJAS: No but - they are certain - I mean... WATTENBERG: Who - who - whose estimates are these? BORJAS: The INS or the former INS. GRISWOLD: Three hundred and fifty thousand was their latest estimate. BORJAS: Their - their - their rate of growth. WATTENBERG: So how many uh, immigrants are coming into the United States every year? About a million give or take? GRISWOLD: Legal, about a million. BORJAS: One point one million almost. WATTENBERG: Uhhhh - legal. Legally. GRISWOLD: I think it’s a little lower than that. It’s averaged about nine hundred thousand. WATTENBERG: Because you gotta take those people who are leaving - in that figure. GRISWOLD: Well, even just those admitted legally. It’s averaged nine hundred thousand over the last decade. BORJAS: But there’s actually - the numbers for legal are very - are very confused. WATTENBERG: Yeah. BORJAS: There are long queues of immigrants, of people, foreign born people who are in the U.S. already who are waiting for their green card. WATTENBERG: Right. BORJAS: The counts of legal immigrants as you know don’t really show up in the INS report until the day they get their green card and we know there are roughly a million or so people in the queue. WATTENBERG: All right. So - so - so - so give or take a million people... BORJAS: Give or take a million... WATTENBERG: A million people are coming into America coming in legally and I’ve seen estimates as low as two hundred thousand; I’ve seen uh, estimates of four hundred thousand and you were saying three... BORJAS: Three to four hundred thousand people per year will be a rough estimate of the - of the illegal rates. WATTENBERG: Okay. Now um, the 1990s if you just go simple into decade-ism, in the 1990s we took in more immigrants than at any time in the past although not by much - it was just a little bit more than we took - took in from 1900 to 1910. BORJAS: Correct. WATTENBERG: But we were four times larger in the 1990s so in terms of the argument which is sometimes called 'swamping', you know, 'they’re gonna take us over there, we’re gonna speak Spanish', all this kinda stuff - uh, the denominator is pretty darn small. I mean you - you - you - you - you are - I - I - I think - I did a calculation once, I don’t know if the numbers still hold up but it - it’s like uh, you were at some big hotel cocktail party and there were six hundred and sixty-seven people there and everybody was drinking’ and the ice cubes were getting’ - the - the corners were getting’ rounded off and then in enters a Pakistani uh, uh, couple and somebody turns to - or Pat Buchanan turns to somebody and says, 'Uh oh. There goes the neighborhood.' I mean you - you’re not talking about uh, um seething masses of - of - you - you’re not talking about a lotta people given the fact that we’re a country of about three hundred million people. GRISWOLD: I - I think that’s right Ben and that’s one thing that gets lost you know, that the real numbers are large but when you look in the percentage of the population we - and we discuss everything else in terms of rate. You know the unemployment rate, the poverty rate, why not immigration? And when you look at the rate over the past decade it was about four point three immigrants per thousand population, per year. WATTENBERG: Right. GRISWOLD: At - in the turn - time of the great migration at the turn of the century, 1900/1910, it was over ten. So in that sense and just in terms of I think our ability to absorb new people, the immigration rate was more than double; two and a half times a century ago than it is today. BORJAS: Uh, it all depends on the number to use. Okay. It all depends on the denominator that one chooses to use. WATTENBERG: That’s right. BORJAS: One could use population, which would make the argument that was just made, right? WATTENBERG: Right. BORJAS: But one could also think of what contribution do immigration - does immigration have on the rate of growth of the population itself or the labor market, or the labor force for example. So one word to say, of the number of - of say of every thousand new people in the U.S. on any given day, how many of those are new immigrants coming in? And by that measure, by the margin, in other words of the change of the - of the population change uh, basically half of the - half of the new people today in the country are foreign born, which is roughly the same number it was back in 1900. WATTENBERG: Say - say that again. Half of what? BORJAS: Half of ev - half - fifty, roughly speaking - fifty of every hundred new people in the U.S. today, in any given day are foreign born. GRISWOLD: So half the population growth... BORJAS: Half the population growth is due to immigration. Which is exactly the same amount it was back in the early 1900s. WATTENBERG: Of - of the growth. Not out of the country. BORJAS: The growth. That’s right, so... WATTENBERG: In the country it’s twelve percent. BORJAS: That’s right. So in terms of the - of the - of the - of the contribution of the immigration... WATTENBERG: That we’re - that we’re - we’re basically half of our growth is through the immigration. BORJAS: Precisely. GRISWOLD: Yes. WATTENBERG: And - and uh, ... BORJAS: Which was also true back then. Because we had much larger fertility rates at that time, obviously. WATTENBERG: I see. BORJAS: Now the other way you can look at it is that WATTENBERG: ...the number of children per woman, right? BORJAS: Precisely. Back in 1970 the fraction of the population that was foreign-born hit a historical low at under five percent. That number has more than doubled in thirty years. WATTENBERG: That’s because of that immigration law... BORJAS: Precisely. So the growth rate has really been quite dramatic. You can look at the numbers in different ways obviously and we do have a much larger base. WATTENBERG: The actual as I recall it - the actual number of people coming in per year who are uh, Mexican are about a quarter. BORJAS: Roughly speaking, that’s right. WATTENBERG: And about a half would be Latin American generally, ’cause they’re coming in from the Caribbean countries and some from Ecuador, Peru and places like that. BORJAS: Another forty percent are from Asia, roughly speaking. WATTENBERG: From Asia. BORJAS: That’s right. WATTENBERG: Why don’t you go through for us ’cause I - it - it’s an interesting story - what ever happened to European immigration? A lotta Europeans want to come here. BORJAS: Well there are two good reasons for it. Okay, number one uh, even before 1965 before the change in the - in the law, you know; European incomes were going up relative to U.S. incomes. WATTENBERG: Right. BORJAS: And we know that what drives immigration are economic motives to a large extent. So that the equalization of incomes within Europe and the U.S. would have reduced in a normal setting even with an unchanging policy the number of Europeans who wanted to come to the U.S. WATTENBERG: Right. BORJAS: Now on top of that, in 1965 there was a major cha - change in policy. Prior to ’65 we had something called the National Origins Quota System. WATTENBERG: Right. The quota system. BORJAS: The quota system. Which basically gave most visas - two thirds of the visas to the- to the countries in Europe. The European Germany. In ’65 we chose the policy so that we arranged the visas all over the world and said, you know, now we’re gonna - we used family links to determine who gets the - the - the visas that we have - the quotas. Well that also restricted the European immigration to some extent. But I would argue that even in the absence of the policy, the fact of the matter is that given the equalization of incomes between Europe and the U.S. we weren’t going to get that many European immigrants. WATTENBERG: And - and - and in terms of the family links because if we had turned off the immigration tap for forty years, the immediate family links were - were - were um, were not present for - for Europeans. They were present for more recent immigrants. Is that - that daisy chain idea? Isn’t that correct? GRISWOLD: Yeah, I think so although family links have always played a role in immigration, you know. Yes, it is... WATTENBERG: As it should, right. GRISWOLD: It is economic motivations, but it’s more than that. It’s family connections, it’s trying’ to sell off short-term problems, so there’s a lot more than just the wage differential but you’re right. It’s family connections and in that sense immigration can take on a momentum of its own where communities get established and the word gets back that there are jobs and you know, Cous - Cousin Vinny or Cousin uh, uh, the other cousin’s here and then they start coming and congregating in communities. So, yes. Family has always played a role but perhaps more so after the ’65 bill. BORJAS: It’s also that you can imagine. I mean think of the pre-’65 situation where many Asians were not allowed to enter the U.S. period. WATTENBERG: Many Asians. BORJAS: Asians were not allowed to enter the U.S. Well they still wanted to come and now the ’65 amendments basically gives a few Asians the lucky chance to get a green card - to get a permanent visa. Once you get in to the family connections you can then sponsor the entry of many - many more relatives so it really becomes to multiply over time. WATTENBERG: It’s the - that - that’s what they call the daisy chain... GRISWOLD: Although let’s not exaggerate it. I wouldn’t say many million. I’d still - our immigration laws are still pretty restrictive and if you’re a non-citizen you can only sponsor your mother, your father uh, a spouse or - or minor children. Once you become a citizen then you can start sponsoring uh, parents and siblings but you can’t sponsor cousins, you can’t sponsor uncles. You know, it’s not just a - a free for all. There is a - a - a daisy chain and then there’s a time lag, too and it - and the waiting list for say siblings to come in is pretty long...ten years or more. WATTENBERG: The numbers of people who wanna come in to the United States. I mean - we - we have this lottery that allows in how many? Fifty thousand. BORJAS: Fifty thousand green cards a year that - that before 9/11 the last lottery held before 9/11 attracted eleven million qualified applicants for fifty thousand slots. So this tells you the extent of pent up demand that exists in many places in the world. And by the way, I mean even - even with the current system because of the family connection determines the visas, there are parts of the world that it’s very, very hard to come to the U.S. from. For example most of Africa. So just imagine once the... WATTENBERG: And - and what - is it twenty-five thousand per nation or something? I mean you get a country... BORJAS: Total. Total. WATTENBERG: And you get a country like India, I mean that’s nothing’ I mean to... GRISWOLD: Yeah, well I think that number’s a little misleading and that there isn’t a real high cost to put your name in for the visa. We don’t know if all eleven million people in - wouldn’t intend to come. WATTENBERG: I - I thought George said they were qualified. GRISWOLD: Qualified applicants... BORJAS: I mean the INS actually has a very well - State Department in this case - has a well-defined set of rules as to what... WATTENBERG: Criteria. BORJAS: ...criteria you have to fulfill to apply. You cannot fill out two applications. This’ll [unintelligible] double your chances of winning. So any - any double applications are sort of disqualified off the top. So you just count the number of qualified applications. It was over eleven million people before 9/11. It went down after 9/11 by the way. There’s roughly seven million people now. GRISWOLD: Yes. What I’m saying is though, I don’t think if we had a - a more liberal immigration regime we would get tens of millions of people coming into the United States. Im - immigration like other markets has a self-regulating capacity to it. They come here because there - there are jobs and if they can’t get a job here it’s very expensive to be unemployed in America - they’d rather stay back in their country. You know we had - pretty much had open immigration a century ago. We didn’t have tens of millions or hundreds of millions of people coming from Europe... WATTENBERG: Well we had tens of millions of people... GRISWOLD: Over - over - over a decade... WATTENBERG: But I mean it completely changed the face of America. GRISWOLD: Yes. BROJAS: You don’t need that many people to change the face of America, but actually you have a very good point. People often don’t realize that most people in the world don’t wanna come to the U.S. That in fact migration costs determining the...you know are really quite restrictive and a good example of that... WATTENBERG: And the people who do wanna come as I understand the literature are sort of uh, in - inherently upwardly mobile in their minds because it’s a tough thing to leave your family and leave your stakes and say I’m gonna go out for the promised land that - which is a risky proposition. Is that right? BORJAS: I - I don’t know if I would agree with that completely actually, okay. I mean, just let me give you two examples of - of the kinds of people who want to leave a particular country. Take a country like Sweden who have income distribution is very compact because of all the tax burdens they have, right? Well you know, you look at the typical Swede trying to decide should I come to America or not? You know, we - who in Sweden wanna migrate? It’s pretty clear to the extent economic incentives matter it will be the wealthy people which say you know, I’m being taxed - my tax is being taken away, my life is being taxed away, you know, my income’s being confiscated. So you’re gonna get a...from Sweden because uh, those are the people who have the most incentive to leave. They’re the ones who are being subsidized. WATTENBERG: For - for... BORJAS: So they’ll be accepted you just made in this context, right? But take a country in the third world, like Mexico or - or someplace like that, right? WATTENBERG: Mexico is sort of in the...first, second and a half - I mean Mexico’s already got what? Five thousand dollars per capita... BORJAS: They do. They do. But still wide, huge disbursement. It’s not Africa. It’s not Africa, but it’s still - compared to the U.S. it’s quite disbursed. WATTENBERG: Right. BORJAS: There are still skilled people in Mexico who do quite well in Mexico. Most of them really wanna come so the people who wanna come from Mexico are from countryside Mexico, so in terms of which kinds of people who wanna come to the U.S. I think in that country who are the - the more advanced economies you tend to generate brain drains and the poorer countries are gonna generate people who are - who don’t have the opportunity to advance in those economies who are gonna come to the U.S. WATTENBERG: ...you have this - I mean, a win-win situation in the remittances uh, thing where - where - where people come to the United States and send some money back home. It’s not corrupt, it’s not skimmed off, and it’s not sent to Swiss banks... GRISWOLD: The best kind of foreign aid there is. WATTENBERG: But it is the best kind of foreign aid there is. I agree with that. GRISWOLD: You know, I just - first on Mexico just to clear something up. It’s not like we’re getting the - the dredges of Mexicans...the average Mexican who comes here is better educated than the Mexicans who stay home. The average Mexican has about five years of education. The average Mexican immigrant - legal and illegal - has about eight. So we are getting the betted educated Mexicans. But you’re right, the remittances. Mexico remittances are now their number three foreign exchange earner behind oil and tourism. And it’s the best kinda foreign aid. It goes directly to families and to community projects. This is something - a very important component of immigration that we shouldn’t overlook. WATTENBERG: Now George it - it’s your thesis as I understand it that the immigration process as we now see it is harmful economically to the United States. Is that a fair representation of your...? BORJAS: Well it - it doesn’t have to be. WATTENBERG: ...but you’re saying it is, or has been. BORJAS: Has been. It has been somewhat harmful to some people in the U.S.; not to everybody. And the problem as I see it is the following. Uh, in the last twenty/thirty years the - the - the kinds of immigrants that the U.S. is getting is not as skilled in some - in some sense as it used to be or as compared to natives in the United States. And what really matters in the end in terms of economic impact of any kind of immigration is where these immigrants fit in the current U.S. economy. The current immigrants, even though there are many, many who are highly skilled obviously, there are many, many more who tend to be in the wrong skill wage distribution. That creates two problems from my - from my perspective. WATTENBERG: Yeah. BORJAS: One problem is you know, we - we already have a lot of low-skilled workers in the U.S. We increase in supply of low-skill labor that’s gonna level the effect income distribution in the U.S. and make workers who compete with the immigrants somewhat worse off. Now it’ll make other people better off, like employers for example who hire - who hire the low-wage labor? So it’s not a - it’s not that everybody loses; it’s that the gains are unevenly distributed. GRISWOLD: Well, first there’s no question that when a nuclear physicist- comes to the United States, we’re better off - just clearly the human... WATTENBERG: They’re - they’re educated on somebody else’s nickel. GRISWOLD: Right. WATTENBERG: And we get ’em - we get ’em free. GRISWOLD: Think - think of the U.S. labor market as kind of a uh, it - it bulges in the middle. Most people are middle class people. They’re insurance agents, nurses, school teachers. Immigrants tend to be more of an hourglass shape. WATTENBERG: You sound like you’re running for office. Like president. GRISWOLD: Immigrants tend to be an hourglass shape. They’re concentrated on the high ends, well educated. But on the lower ends, George is right. Now one thing I do disagree - George says you know, we already have plenty of workers on the low end. Actually you talk to people who hire their skilled workers and they say they have a hard time finding them and the - the problem is it’s a demographic issue again. Americans are getting older; we’re getting better educated. Within the next decade... WATTENBERG: Americans don’t want those jobs. They won’t take a job as a field hand or - or. GRISWOLD: They’re overqualified. They wouldn’t be happy with a lotta these jobs. WATTENBERG: ...they just uh - those are uh, rotten jobs I mean, you know, emptying the bedpans and mowing lawns and all that kinda stuff. GRISWOLD: We all know what those jobs are. BORJAS: This is an argument that you often hear, especially that economists make about how these people don’t wanna take these kinds of jobs. The way it usually takes place is the following. Immigrants do jobs natives don’t wanna do. I think the correct statement is immigrants do jobs natives don’t wanna at the going wage. Let me give you a little anecdote. I used to live in California. Every person mows lawns in Southern California’s Mexican. Totally legal. Low skill and clearly leads to a lot of cheap labor for people who wanna hire, you know, people who - who - who mow lawns. And the lawns are very nice in southern California. I moved to Boston. Very few Mexicans in Boston. Nevertheless the lawns are still green. If people want - if people want those kinds of services they will pay for it. So it’s true. It is certainly true that immigrants do particular kinds of jobs but is at the expense of somebody else in some sense. Somebody’s paying for the fact that we now have an increased supply of low-wage labor and it happens to be low-wage workers. GRISWOLD: George you have to complete that, though. It’s not just a question of letting the price go up. What’ll happen is people won’t be hiring workers at those wages? You can’t just let the wage go up. La - large sectors of the U.S. economy like landscaping like the hospitality industry. It’d shrink if they didn’t have access to the low-skilled worker. And I - and I have to say that the pool of Americans who would be happy with these jobs is shrinking at a time when those - the demand for those jobs is growing. The U.S. Labor Department estimates future job growth. There are - estimate the number, the net number of jobs in the United States that require a month or less of training - basically the low-skilled jobs - they’re gonna grow by almost eight million over the next decade. Eight hundred thousand new jobs every year in these lower skills. And the pool of Americans who would be willing to take those jobs is shrinking. That’s why we have illegal immigration. Our immigration system allows the higher skilled people in; they allow family. There’s virtually no channel for low-skilled workers to come into the country even temporarily to fill these jobs and hence we have a large illegal immigration flow. WATTENBERG: There have been - I just wanna interrupt you. There have been other studies, I know one by if I’m not mistaken by the National Academy of Sciences - I know they had another one, but - but that says immigration unbalanced is which he’d netted out over a lifespan is good for - for - for Americans and you say it’s bad, but in any event, the swings are not huge. BORJAS: Let me actually talk to the National Academy Study because the - I was on that panel for the National Academy... WATTENBERG: You were on the panel. BORJAS: Yes, I was on the panel and they numbers they used to - to argue that immigration creates a surplus for Americans - turns up the labor market circles - are actually from a paper that I wrote - and academy paper that I wrote. WATTENBERG: Well, see? BORJAS: So it’s - it’s my number, okay in some sense. But what... WATTENBERG: But we’ve proved ’em wrong already. BORJAS: What is forgotten in that argument is that if one looks at all the economic studies that have been done to calculate the size of the benefits - this is going outside the fiscal impact. So in other words, immigrants come into the labor market today. They create all these- all these jobs and you know, or they get hired for these jobs. They affect the labor market in particular ways. What happens to the end - at the end of all the process to sort of - the - the GDP that accrues to...That’s really the question that - that the national academy study looked at - at how much those GDP taking apart the fiscal impact and taking apart the salary that... WATTENBERG: Now what - what would that mean in this case? BORJAS: The fiscal impact? WATTENBERG: Yeah. BORJAS: Sorta the - the impact on schooling costs, welfare costs and things of that nature which is sep - separate matter, right? WATTENBERG: Right. BORJAS: So in terms of just economic contribution immigrants make - they come in, they product output, the output is sold to consumers, there are higher profits, lower prices and so on and so forth, right? How much does a country benefit as a result of that? You look at the National Academy study. It’s point one percent of the GDP. GRISWOLD: One - one to ten billion they said. BORJAS: Okay, it’s... GRISWOLD: ...but it is positive. WATTENBERG: It’s positive growth. It’s your study. BORJAS: It’s my study. It’s actually numbers from a study that I published originally in 1995. And that’s really a number that - that’s my model. WATTENBERG: So - so we got ’em. BORJAS: Yeah, but let’s think about the number... GRISWOLD: I call it a less significant, positive gain. It’s not a big number, but it is positive. BORJAS: Let’s think of what the number... WATTENBERG: And - and the ones that show negative are- are also not massive. We’re - we’re talking at the margin. BORJAS: But again - but precisely the point except that that number hides something else is going under the current. So let’s think of that first nu - let’s think of the ten million dollars. What does that mean? That basically means that on net, the typical native person in the United States is benefiting by maybe thirty/forty dollars a year as a result of immigration. Which is a benefit, I agree. But it’s really change. You know. It’s sort of like, in terms of GDP in the U.S., which is eleven trillion dollars right now. So it’s not a big number. Now the problem with that number is that if you look again at National Academy study which goes back to my own study, it’s really a net of two factors. One is the - that number comes because immigrants come in and they basically reduce wages at the same time that they increase profits, and reduce price in the consumer market. GRISWOLD: Reduce wages for certain people. BORJAS: What? For certain people. So... GRISWOLD: Actually they only found two groups of people that were negatively affected in terms of wages. Other recent immigrants, which would make sense and then Americans without a high school diploma. Adults and they’re getting it from all sides. You know, we could cut immigration to zero and people without a high school diploma in our society would still face an uphill battle, you know, low-cost imports, technology. But the vast majority of Americans do benefit from immigration. BORJAS: At - at- at- at that time there weren’t enough studies done... WATTENBERG: All right hold on. Let - let me uh, we - we - we are running out of time now. We’re going to do a second part uh, of this program so uh, let me uh, thank you Dan Griswold and George Borjas and uh, we will continue this in part two of - of this program. And thank you, please remember to send us your comments via email, it’s how we make our show better. For Think Tank, I’m Ben Wattenberg. Announcer: We at Think Tank depend on your views to make our show better, please send your questions and comments to New River Media, 1219 Connecticut Ave NW, Washington, DC 20036 or email us at thinktank@pbs.org. To learn more about Think Yank, visit us online at pbs.org and please let us know where you watch Think Tank. Funding for this program is provided by... (Pfizer) At Pfizer, we’re spending over five billion dollars looking for the cures of the future. We have 12,000 scientists and health experts who firmly believe the only thing incurable is our passion. Pfizer, life is our life’s work. 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