Heaven's Door: Immigration Policy and the American Economy
by George J. Borjas
Princeton. 264 pp. $27.95
Irwin M. Stelzer
AT LAST,the emotional subject of immigration has been addressed by a scholar who does four things right: he asks the appropriate questions; he is scrupulous in his use of the complicated data on immigrants' performance and behavior; he carefully considers opposing interpretations of those data; and he sets out policy proposals that constitute the basis around which future debates should revolve. These virtues are much needed in a debate variously infused with the prejudices of those who would altogether shut "Heaven's Door" to newcomers; the nostalgia of those who remember when their own parents or grandparents were among the tempest-tossed, huddled masses yearning to breathe free; and the narrowly self-interested concerns of those who would benefit from either a constriction or an expansion of the cheap labor immigrants supply.
How many immigrants do we want, and which ones should they be? These, according to George Borjas, an economist at Harvard's Kennedy School of Government, are the two most relevant questions for policy. But in order to answer them, he points out, we need to know exactly what the United States means to accomplish through immigration. If our goals are mainly humanitarian, for example, we should develop a policy designed to relieve suffering around the world by taking in the poor, the victims of oppression, and even the ill. If, on the other hand, our goal is to maximize the economic welfare of our own native population without at the same time greatly increasing the amount of inequality in society, a far different policy is called for.
Borjas leaves no doubt as to where he himself stands. His aim is to devise a policy that will "best serve the interests of the United States," by which he means the economic well-being of Americans. What is needed to accomplish that, in his considered view, is a shift away from our present system, which is based on the principle of family reunification, toward one that will favor skilled workers. He would also reduce sharply the current level of immigration. A measure of his integrity as a scholar is his frank acknowledgment that he himself, who came to this country with his mother as a penniless escapee from Castro's Cuba, would probably not have passed the test "implicit in the skills-oriented immigration policy" he now advocates. Nevertheless, this is the conclusion to which he has arrived after carefully studying all the data, the highlights of which are roughly as follows.
DURING THElate 1990's, almost one million legal and 300,000 illegal immigrants have arrived in America annually, topping the 900,000 annual figure reached during the first decade of this century, when the great migration of 1880-1924 was at its peak. Of course, since our overall population is now much larger, the foreign-born share is less than it was in 1910 (about 10 percent as compared with 15 percent). But it is twice what it was 30 years ago.
No less important than sheer numbers is the character of the new wave, which is very different from the earlier one. We have seen a large increase in the number of immigrants with few if any skills, and simultaneously a shift in area of origin from Europe and Canada to Latin America (50 percent) and Asia (30 percent). "If nothing else," concludes Borjas, "the Second Great Migration has altered the "look" of the United States in ways that were unimaginable in the 1970." This change in "look" accounts for much of the popular unease about our current levels of immigration, leading a writer like Peter Brimelow (Alien Nation, 1995) to fear that "the American nation might die."
The new immigrants, Borjas finds, have also increased inequality in this country by depressing the economic opportunities of native-born unskilled workers. They have placed substantial fiscal burdens on the welfare systems of the states in which they congregate, and they have benefited employers of unskilled workers. In sum, today's immigration "can be viewed as an income-redistribution program, a large wealth transfer" favoring high- over low-income Americans.
Many of these findings are now uncontested. The National Academy of Sciences Research Council (NRC) estimates that immigration was responsible for 44 percent of the decline in real wages experienced by high-school dropouts between 1980 and 1994. Writing in the Public Interest (Fall 1998), Steven Camarota, a scholar at the Center for Immigration Studies, maintained that the wage effects are even "larger than those reported in the NRC study." Both the NRC and Camarota also support Borjas's finding that immigration has negative fiscal consequences, especially for the six states (California, New York, Texas, Florida, New Jersey, and Illinois) that account for three-fourths of the immigrant population.
TO MAKEmatters worse, recent immigrants themselves have not fared so well in this country. In contrast to their turn-of-the-century predecessors, who gradually caught up to native-born Americans, those entering in 1960 are today much farther behind native-born Americans economically than they were at the time of their arrival. More significantly, the newer immigrants show lower rates of assimilation than did earlier arrivals, and are less likely to learn English, which for Borjas is one key to narrowing the income gap. All in all, he writes, the wages of recent immigrants are unlikely to grow rapidly enough to permit them "ever [to] overcome their economic disadvantage".
As Borjas is quick to acknowledge, the new immigrants' slower rate of assimilation cannot be laid entirely at their own feet. In good part it is traceable to a loss of faith in traditional American values by our dominant liberal class. He tellingly quotes Martha Farnsworth Riche, director of the Bureau of the Census in the Clinton administration:
Without fully realizing it, we have left the time when the nonwhite, non-Western part of our population could be expected to assimilate to the dominant majority. In the future, the white Western majority will have to do some assimilation of its own.
Such multiculturalist banalities, it should be noted, happen to coincide neatly with the interests of the principal beneficiaries of today's immigration–the people who hire the pool cleaners and gardeners in Beverly Hills and East Hampton and who insist on having freshly hand-picked vegetables and salads on their dinner table.
AFTER LAYINGout and considering the facts, Borjas comes to prescription. Our present policy, established in 1965, admits any visa applicant with a family member already residing in the United States, subject only to so-called "pierceable caps" (bureaucratese for caps that are not really caps). In addition, a limited number of slots are available based on skills; in the early 1990's, however, these accounted for only 7 percent of all visas issued. Finally, some 10,000 visas are available to foreigners who create at least ten jobs by investing at least $1 million or, in an area of high unemployment, $500,000.
Instead of all this, Borjas would give "points" to visa applicants based on various socioeconomic characteristics, skills among them. The total number of immigrants would be determined by where the passing score is set, while the number of points each applicant earns would determine who gets in.
Canada is Borjas's model. There, points toward a visa are given for age–neither too young nor too old; advanced degrees–doctorates preferred; work experience; English-language fluency; number of relatives already in the country; and occupation (economists, alas, get a stingy one out of a possible ten points). Anyone with more than 70 points is in; all others, stay home.
Borjas recognizes that this plan has two major defects. First, the characteristics that matter and the weights assigned to them are left in the hands of bureaucrats. Second, the categories used to determine who shall be welcomed and who turned away–education, age, and occupation–are not certain predictors of economic performance; in the U.S., indeed, they "explain only about a third of the variation in earnings across workers."
Against these defects, however, Borjas sets what is to him the overwhelming virtue of the Canadian point system: it works, by which he means that it "generates a more skilled immigrant flow" than other systems.
PERHAPS THEmost interesting aspect of Borjas's discussion here is his exploration and ultimate dismissal of the use of market principles in allocating visas. In a market system, visas would go to those who most value and, in open bidding, could afford them. This, Borjas freely concedes, "would maximize the total gains accruing to those who immigrate to the United States and to the U.S. Treasury." Yet, he goes on, "despite [its] logical appeal and apparent benefits, . . . this type of proposal does not seem to go far in the political debate."
The problem as he sees it is not only that "most of the ancestors of the current American population would have been unable to buy such visas." It is also that reliance on markets for certain things–Borjas includes in this category not just visas but human organs–raises "moral questions":
Although the sale of kidneys, livers, and visas may be the economist's favorite solution to the very difficult problem of how to allocate these scarce resources in a democratic society, the proposals tend to share a moral blind spot. Many persons–myself included–feel that there are some things that should not be for sale.
I happen to disagree with this line of reasoning, but the point to be stressed is that, in rejecting a market-based approach, Borjas is left with yet another rationing scheme, admittedly different from our present one but leaving open some of the very questions he wants to foreclose: namely, whom should the policy benefit, and why, and how do we decide? Although he attempts to cut through this thicket by taking as his standard the economic well-being of Americans, leaving it to others to propose variations and to policy-makers to weigh the cost of those variations against the "higher cause" the policy is meant to serve, he cannot escape the arbitrariness that, he rightly contends, is one of the besetting sins of the present system.
A SIMILARproblem bedevils Borjas's discussion of numbers, i.e., not the "who" of immigration policy but the "how many."
On this point, he is somewhat stumped. After musing about the effect of admitting various numbers, he offers us "a good place to start": 500,000 annually, about half the current level, and in line with the recommendation of the Commission for Immigration Reform.
But why reduce the current flow at all? Because, Borjas writes, the "passion in the immigration debate" indicates that the current numbers are "too large." Here once again he abandons his expertise as an economist to play politics. Just as markets cannot be used to determine which sorts of immigrants we will take in, because "this type of proposal does not seem to go far in the political debate," so they cannot be used to determine the numbers we will take in, because the immigration debate has turned passionate.
But why not? The present system already includes some market components: visas for some skilled workers and those capable of investing $1 million. Nor does Borjas tell us how he knows that a concerted effort to push for a market-based visa policy is doomed to fail: after all, no one thought that proposals by economists to deregulate the airlines, and trucking, and the electric and gas industries would "go far in the political debate," yet today those industries rely on market mechanisms to allocate their products among the various claimants.
Having rejected the market and any sort of bidding system for visas, Borjas is left standing on shaky ground. He must play pick-a-number to determine how many immigrants we will take in, and he must empower government bureaucrats–presumably those in the notoriously corrupt and incompetent Immigration and Naturalization Service (INS)–to determine who they will be. And nowhere in all this is it explained how the system he proposes is better suited than a market system to admit immigrants who will add to the welfare of native Americans.
Consider the case of two applicants, one a computer engineer whose skills are in short supply in Silicon Valley, the other a social worker. Any market-based test, depending as it does on the ability to pay, will give preference to the former as someone who has already established his value in the international labor market or can demonstrate his prospective value to an employer willing to fund his entrance fee. (This is not just true for computer specialists; hotel owners in Florida who are already scrambling to pay substantial moving costs for domestic workers would certainly be willing to bear the entrance fees of prospective workers from abroad.) But the social worker will undoubtedly be the choice of an INS bureaucrat, who himself has probably fled the market for the safety of life tenure in government. I leave it to the reader to guess which of the two applicants is likelier to increase the economic well-being of Americans.
AS THOMAS SOWELLhas written, "The peopling of America is one of the great dramas in all of human history." This country, the anti-immigration sentiment of our own and earlier ages notwithstanding, has always been nourished by being the one place in the world that has truly been "Heaven's Door." Somehow–and no one is certain just how–we have always managed to convert the unskilled and the impoverished into skilled and economically productive members of the American family.
Borjas proves beyond a doubt that such a feat will be far more difficult with the current wave of immigrants than it was with those who came here in earlier times, and from other places. But difficult is not the same thing as impossible. So we must ask ourselves this question: are we now prepared to turn away a new generation of those who would come here to work and advance, when we can instead rely on the market to weed out those among them who seek merely a handout, when we can reestablish assimilation as a legitimate goal of policy, and when we can use the tax system to ameliorate the distributional consequences that quite properly trouble Borjas and others?
Would that Borjas had turned his fine academic mind and writing hand to the development of policies that would render hard restrictions on immigration unnecessary. But that may be asking too much of an author who has already given us the facts and many of the tools we need to engage in rational discourse about the future both of immigration and, inevitably, of our society.
IRWIN M. STELZERis director of the Hudson Institute's regulatory-studies program and U.S. economic and political columnist for the Sunday Times of London.
Copyright 1999 Commentary Magazine; http://www.commentarymagazine.com/9909/books.html#UM