October 2024 - Working Immigrants

An immigration research center which sold its soul

The Center for Immigration Studies addresses immigration from a perspective which favors restrictions on immigration. I have found it useful: it states an restrictionist viewpoint which needs to be listened to, and it posts reports some of which are quite valuable, such as reports on Hispanic migration. That said, the editorial opinions can sometimes come across as extreme.

On October 23, the Center published a blog post on voting by non-citizens. The blog did not address — did not challenge or comment on — the overwhelming evidence that non-citizens do not vote, and no evidence that the vanishingly small number who do make a diference. I have posted on this issue from time to time, citing for example a recent state study the conclusions of which were that one out of 13,000 votes might be by non-citizens.

The blog post went into a frenzy of arithmetic about how many non-citizen votes were needed to swing the Presidential election. The blog completely ignored the overwhelming evidence. The post magically transformed non-citizens into voters, as if local election boards would allow this.

I’ve lost any interest in drawing on this source in the future, as most or all of its reports may by infected with craziness.

One way to look at the economic impact of immigration: impact on the federal budget

A Manhattan Institute report estimates the fiscal impact on the federal budget if a “selectionist” program of immigration were imposed. The study attempts to estimate how the lifetime of an immigrant affects the federal budget, summing some two dozen types of tax revenues and disbursements.

For a 24 year-old immigrant without a high school degree, the lifetime net fiscal effect on the federal budget is a loss of $314,000. For an immigrant under 35 years old with a graduate degrees, the fiscal effect is positive over one million dollars. (But the average American is a $250,000 loss.)

The study ends with what might be called a Dr. Strangelove Scenario whereby we deport half of unauthorized persons who are a net drain, keep the rest as they are not a net drain, at least as much; push up the relative number of young and educated, and thereby move the total net fiscal impact to the positive. I’m not here going to analysis the steps the author takes, but rather hits the high points.

The study was prepared by a Venezuelan immigrant, Daniel Di Martino, a PhD candidate in economics at Columbia University and a graduate fellow at the Manhattan Institute. The study includes many useful facts about the formal education attainment within key classes of immigrants, by age category.

He concludes: “If all the recommendations made in this report are implemented, the U.S. could reduce the debt and grow the economy by potentially $2.4 trillion over the long run, rising by over $200 billion every year that these selectionist immigration policies remain in place. Selectionist immigration requires taking a strategic approach to immigration that prioritizes young and highly educated immigrants over older and less educated immigrants.”

The author writes that the average native-born citizen is expected to cost over $250,000 to the federal government. (All lifetime figures are net present value.) Thus we start with a situation of net fiscal drain without yet considering immigration.

Immigrants without a college education and all those who immigrate to the U.S. after age 55 are universally a net fiscal burden by up to $400,000. (Grandma coming in at age 65 has imposed a lifetime fiscal drain of $406,000). The large positive fiscal impact of young and college-educated immigrants pulls up the overall average. Each immigrant under the age of 35 with a graduate degree reduces the budget deficit by over $1 million during his lifetime. As for those coming to the U.S. to study, the fiscal impact of the average graduate degree holder who entered the U.S., aged 18–24 is outstandingly positive, which is why the author strongly favors keeping STEM students here to live.

For 18 – 24 year old immigrants without a high school degree, the lifetime net fiscal impact is negative $314,000. The author looks at the impact of a U.S. born person with the same profile and estimates negative $256,000. This is an interesting comparison as it shows that persons with poor formal education of a fiscal net loss, regardless of birth place.

The author’s desired scenario it to reduce annual immigrant from about one million to 850,000, and to tilt every class of legal immigrant towards a young and educated profile. This includes deporting 5 million unauthorized persons who do not meet certain criteria and legalizing another 5 million. The fiscal impact of seven other changes is relatively modest, yet still substantial. The scenario envisions doubling the share of new immigrants using economic criteria and lowering total immigration.

The rise of household wealth and of global mobility

Voluntary migration, which is undertaken primarily for economic improvement, is abetted by households having enough private wealth to afford the migrate. One form of migration that is almost entirely dependent on household wealth is international education at the college and even high school level. Vacation travel abroad is almost entirely dependent on household wealth.

The chart below shows the growth of global houseold liquid assets (such as bank accounts) and home ownership since 1990. Home ownership is in part an investment with potential to fund other spending by home loans. Note the huge growth of household assets, driven by the entrance of Asians into the middle class and the global rise of home ownership and home prices. Note that this trend greatly exceeds the trend in global gross domestic product.

The growth of household assets and GDP was interrupted by the COVID pandemic. Today, with the reduction in inflation and expected reduction in interest rates, we should expect a high rate of growth in discretionary temporary migration and demand for permanent migration (the latter severely constrained by immigration caps).

Most Repulicans say that immigrants “poison the blood” of Americans

PRRI did a poll covering a number of issues but featured immigration. It wrote in summary, “American attitudes about immigration policies have grown more conservative; nationally, those trends are driven primarily by Republicans and independents adopting more conservative views in recent years.”

the poll results showed that 34% of Americans say that immigrants entering the country illegally today are “poisoning the blood of our country,” including 61% of Republicans, 30% of independents, and 13% of Democrats. White evangelical Protestants (60%) are the only religious group among whom a majority agree that immigrants entering the country illegally are poisoning the blood of the country.

Donald Trump said that immigrants are “poisoning the blood of our country” on October 4, 2023, during a rally in New Hampshire.

Other instances of using the phrase “poisoning the blood” of a selected and protected native population are:

Nazi Germany: Joseph Goebbels, Hitler’s Minister of Propaganda, frequently spoke of “Jewish blood” as a “poison” to German society, aiming to stoke antisemitic fervor.

United States: During the early 20^th Century decades, Madison Grant, an influential American eugenicist, advocated for racial purity, saying that immigration from Eastern and Southern Europe would “contaminate” or “poison” the American stock. His 1916 book, The Passing of the Great Race, became a significant influence on immigration restrictions in the U.S., especially the Immigration Act of 1924.

South Africa: Politicians like Dr. Hendrik Verwoerd, a leading architect of apartheid, said such racial mixing was dangerous to the “racial health” of South Africans.

Hungary: Viktor Orbán, Hungary’s Prime Minister, has used rhetoric about preserving “Hungarian blood” and protecting the country from the “infiltration” of migrants, framing immigration as a threat to Hungary’s ethnic and cultural fabric.

Japan struggles with finding workers

In the U.S, 7% of workers are 65. Or over; in the UK, 4%. But in Japan, 14% are 65 or older. (The same in Korea: 13%). Why this huge difference?

Aging: The population of people aged 65 and over accounts for 29.3% of the country’s total population. This is expected to reach 35% by 2040. In the U.S.. they account for 18% of the population. By 2054, they 23% of the population.

Absence of a large foreign-born population: in 2000, about 1.2% of the population was foreign-born. Today, after a decade of targeted but discreetly revealed governmental policies, 3.3% of the population is foreign-born. Immigration tends to concentrate is early-mid working age (20 – 45 years). In the U.S. foreign-born persons are 14%; in Germany, 19%. OECD countries average 10% of their population as foreign-born.

In the U.S. some 30% of the entire workforce will in the next five years be either first or second generation foreign-born. It is hard to see how this percentage in Japan will be over 5%. (I’ve posted in tbis here.)

The largest sending countries of foreign-born persons in descending order are China, Korea, Philippines and Vietnam. (There are a good number of Brazilians as well, stemming from immigration in the pre-WW 2 period; there are currently 2 million Brazilians of Japanese descent.)

According to an OECD study, eligibility conditions for permanent residency in Japan are strict. Migrants usually need to live ten years in the country to be eligible. Attracting talent is also hindered by low job mobility in the Japanese labor market.

International students are a key resource targeted by Japan’s strategy to attract and retain global talent and have been traditionally the main way for foreign-born persons to settle in the country. But the numbers are tiny. The number of international students grew from about 140,000 in 2010 to over 300,000 today and the government aims that number to grow. Compare 300,000 with the size of Japan’s entire workforce of 69 million. In Canada, there are one million international students and a total workforce of 22 million!

Latinx: a word most Hispanics don’t want used

Pew Research comes up with a poll of Hispanics about the word Latinx (I posted on this before in 2021 here).

The most influential finding of the new survey is that, among those who have heard the word, more Hispanics – 75% –today prefer the word not be used than they did in the past – 65% in 2019. Only 4% of Hispanics use it.

Among all Hispanics, 52% prefer to use the word Hispanic vs 29% Latino. Som 15% express no preference, The slither remaining prefer Latinx or Latine.

EU as a bloc will reduce immigration

The EU will now formally reduce immigration. This is in line with Canada and Australia. And by immigration reduction, it means cutting back on asylum seekers. The politics of immigration into the EU is very influenced by waves of asylum seekers, as it is in the U.S.

Actual annual awards of asylum applications to EU countries has been as high as one million and is now about 300,000.

This needs to be put into a broader context. In 2022 there were. about 4.2 million non-asylum immigrants and about one million non-asylum emigrants, for a net incease of 3.2 million, or about 1/2 of one percent of total population. The total population of the EU, when all countries are taken into account, is about 750 million and has been flat for some years. the prevailing annual rate of net migration to the U.S. is closer to 1/4 of one percent; for Canada, about one percent.

These EU figures do not reflect the reality that most asylum seekers want to live in western and northern Europe, which has a population of about 300 million.

From Politico EU: BRUSSELS — Ursula von der Leyen will propose tougher laws and more plans to deport rejected asylum seekers, doubling down on the European Union’s new embrace of harsher migration policies as anti-immigrant parties gain popularity across the Continent.

More than half of EU member countries, including France and Germany, asked the EU to toughen up its deportations policy ahead of 27 EU leaders meeting Thursday — and now the head of the EU’s powerful chief executive is putting her rubber stamp on deportations.

Von der Leyen, president of the European Commission, said in a press conference that leaders had discussed setting up deportation centers outside the EU’s borders, referring to them as “return hubs.”

……

During the 2000s, the number of asylum applications to the EU wavered between 250,000 and 500,000. They surged in the early 2010s, in large part due to the Syrian domestic conflict, with applications peaking in 2015 at 1.3 million. In 2023, they were still elevated at 1.1 million but have recently declined.

The number of actual arrivals can be much less, though they did exceed one million in 2015. Arrivals have been trending about 300,000 a year.

Spain is the only EU country whose leader advocates for sustain immigration, saying that it meets demand for workers.

Which country’s immigration is most biased toward highly educated immigrants?

A study by the Federal Reserve Bank of St. Louis says that among OECD countries, the share of work-force age foreign born with college degrees varies greatly — and Canada is tops (probably– the study zeroed in one five countries, a competitor would be Australia).

Dairy workers with no legal immigration pathway

America’s dairy workers do not fit into existing categories for legal immigration. They are year-round, rather than seasonal farm workers, and thus cannot be accommodated by H-2A seasonal work permits. These permits hav surged in use, associated the a relative decline among produce farmers to depend on unauthorized workers. Diary workers have no formal modern day skills thus will not be given employment-based green cards. Yet they fill a gap in the farming workforce created by the decline in population in rural areas and the relatively unattractive compensation and working conditions.

In 2015, hourly wages averaged $11.54, which aligned with wages generally in farming. These wages have surged due in part to labor scarcity, and today both diary and farming in general are $18-$20 an hour. As foreign-born dairy farmers are often provided housing, the comparison with non-farming compensation is not straightforward. It is worth noting that 31 states do not provide special authorizations for persons without formal legal status to drive a vehicle, thus housing for many may be an absolute requirement. (Go here about special drivers licenses.)

Rural exodus of the U.S. born population, poor attributes of a 24/7 work demand, and low wages compared to cleaner and safer work have created a chronic shortage of workers.

Hence the high use of unauthorized workers to fill diary jobs. 79% of of foreign-born workers in diary farms are estimated to be unauthorized. A national survey of dairy farms was conducted during Fall 2014 produced these insights:

foreign-born labor accounts for 51% of all dairy labor. Dairies that employ immigrant labor produce 79% of the U.S. milk supply. Eliminating immigrant labor would reduce the U.S. dairy herd by 2.1 million cows, milk production by 48.4 billion pounds and the number of farms by 7,011. Retail milk prices would increase by an estimated 90%.

(From Texas A & M, The Economic Impacts of Immigrant Labor on U.S. Dairy Farms, by Flynn Adcock, David Anderson, and Parr Rosson. August 2015)

Also go here.

How the Manhattan Institute looks at profit and loss from immigration

Also, the Congressional Budget Office has released a forecast of the impact on the federal budget for 2024-2034 which dramatically shows the opposite of the the Manhattan Institute study. The CBO, by taking into account the total impact on the economy including increased productivity overall by recent Biden-era surge of immigration, projects that the net effect on the federal budget during these years will be a positive $0.9 trillion. The Manhattan Institute study ignores second effects or externalities. (For instance, in an economy with labor shortages in certain industries, by filling open jobs immigrant workers can boost total employment.)