By Robert J. Samuelson
Wednesday, May 17, 2006
President Bush's immigration speech mostly missed the true nature of the problem. We face two interconnected population issues. One is aging; the other is immigration. We aren't dealing sensibly with either, and as a result we face a future of unnecessarily heightened political and economic conflict. On the one side will be older baby boomers demanding all their federal retirement benefits. On the other will be an expanding population of younger and poorer Hispanics -- immigrants, their children and grandchildren -- increasingly resentful of their rising taxes that subsidize often-wealthier and unrelated baby boomers.
Does this look like a harmonious future?
But you couldn't glean the danger from Bush's speech Monday night. Nor will you hear of it from most Democrats and (to be fair) the mainstream media. There is much muddle to our immigration debate. The central problem is not illegal immigration. It is undesirably high levels of poor and low-skilled immigrants, whether legal or illegal, most of whom are Hispanic. Immigrants are not all the same. An engineer making $75,000 annually contributes more to the American economy and society than a $20,000 laborer. On average, the engineer will assimilate more easily.
Testifying recently before Congress, University of Illinois economist Barry Chiswick -- a respected immigration scholar -- said this of low-skilled immigrants:
"Their presence in the labor market increases competition for low-skilled jobs, reducing the earnings of low-skilled native-born workers. . . . Because of their low earnings, low-skilled immigrants also tend to pay less in taxes than they receive in public benefits, such as income transfers (e.g., the earned income tax credit, food stamps), public schooling for their children, and publicly provided medical services. Thus while the presence of low-skilled immigrant workers may raise the profits of their employers, they tend to have a negative effect on the well-being of the low-skilled native-born population, and on the native economy as a whole."
Hardly anyone is discussing these issues candidly. It is politically inexpedient to do so. We can be a lawful society and a welcoming society simultaneously, to use the president's phrase, but we cannot be a welcoming society for limitless numbers of Latin America's poor without seriously compromising our own future -- and, indeed, the future of many of the Latinos already here. Yet, that is precisely what the president and many senators (Democratic and Republican) support by endorsing large "guest worker" programs and an expansion of today's system of legal visas. In practice these proposals would result in substantial increases of low-skilled immigrants.
How fast can they assimilate? We cannot know, but we can consult history. It is sobering. In 1972 Hispanics were 5 percent of the U.S. population and their median household income was 74 percent of that of non-Hispanic white households. In 2004 Hispanics were 14 percent of the population, and their median household income was 70 percent of the level of non-Hispanic whites. These numbers suggest that rapid immigration of low-skilled workers and rapid assimilation are at odds. Some immigrant families make huge advances, but many don't and newcomers represent a constant drag.
The difficulties are obvious. Competition among them depresses wages. Social services are stretched thin. In 2000 children of immigrants already represented a quarter of all low-income students in U.S. schools, an Urban Institute study reports. The figure is probably higher today. The study also reports that immigrant children are rapidly spreading beyond the six states where they had traditionally concentrated (California, Texas, Florida, Illinois, New York and New Jersey). This may explain why immigration has suddenly become such an explosive issue. A reader e-mails: "There are children in my son's school who aren't able to speak a single word of English, and it is causing such frustration amongst the staff and other children . . . I am afraid for my son's future."
There are striking parallels between how we've treated immigration and aging. In both cases, the facts are hiding in plain view. But we've chosen to ignore them because candor seems insensitive and politically awkward. Who wants to offend the elderly or Latinos? The result is to make our choices worse by postponing them. A sensible society would long ago have begun adapting to longer life expectancies, better health and greater wealth by making careful cuts in Social Security and Medicare. We've done little.
Unfortunately, the two problems intersect. Just coincidentally, the Census Bureau projects both the 65-and-over population and the Hispanic population to be about a fifth of the total by 2030 (the elderly population is now about 12 percent). The tax increases that will be required to pay for existing federal commitments to the elderly are on the order of 30 to 40 percent. People who don't think there will be conflicts between older beneficiaries and younger taxpayers -- Hispanic or not -- are deluding themselves. People who imagine there won't be more conflicts between growing numbers of poor Latinos and poor African Americans for jobs and political power are also deluding themselves.
As the president says, we need a "comprehensive" immigration policy. He's right on some elements: controlling the border; providing reliable identification cards for legal immigrants; penalizing employers that hire illegal immigrants; providing some legal status for today's illegal immigrants. But he's wrong in wanting to expand the number of low-skilled immigrants based on the fiction of U.S. labor "shortages." In his testimony, economist Chiswick rightly argued that we should do the opposite -- give preferences to skilled immigrants. We should be smart about the future; right now, we're not.