Immigration an overlooked factor in the shrinking middle class

The Pew Research Center reports that “From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas…” Pew previously reported that “Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.”

(Income is defined as money income received exclusive of certain money receipts, such as capital gains, before payments for such things as personal income taxes, Social Security, union dues and Medicare deductions.)

The shrinkage is most easily seen in an article by Tom Edsall,  in which there is a graph showing that between 1970 and high + low middle classes shrank from 65% to 41%, upper income rose from 17% to 30% and lower income rose from 19% to 30%.

I cannot find in Pew’s analysis any mention of the rise in the immigrant population in the U.S. Between 1980 and 2010, the foreign born population in the country rose from 6.2% to 12.9%. The foreign-born share of the workforce from 6.7% to 16%. An explanation of the decline of the middle class can’t be sufficient without taking this demographic into account.

What Pew’s and everyone else’s analysis overlook, is that the foreign born workforce is distinctly more bi-modal than the native-born workforce. That is, this workforce has relatively more people in the lower and higher income segments and relatively less in the middle income brackets.  This workforce has grown faster — much faster — than the native born workforce, especially the white workforce.

This more bi-modal profile subsides in the second generation; that is, children of workers in 1980, who today are in there 20s to 40s, but on the whole college graduation remains much lower. It stands to reason that the increase in the immigrant workforce, both first and second generation, contribute, perhaps significantly, to shrinking the size of the middle-income brackets.

I turn to a Bureau of Labor Statistics report on labor force in 2014. As if often the case, the use of median or average figures obscures the distribution. But the BLS report has some figures that are worth looking at.

In 2014, 48.3% of the foreign-born labor force was Hispanic, and 24.1% was Asian.

This first table is typically how foreign and native born workers are compared. A much higher percentage of native born workers are in higher status jobs:

………………………………………management      service
Foreign born                            30.7%                   24.1%
Native born                              39.8%                   16.4%

The chart on  gives you a clue as to the bimodal profile of immigrants.

Now look at the following table showing the distribution of employed persons by educational attainment. Hispanics and Asians account for 72.4% of employed persons. Combined, they present a strikingly bi-modal profile compared to white non-Hispanic native-born workers.

…………………………………………………< HS     HS    < BA      BA plus
Hispanic foreign-born                            42%   29%    15%     14%
Asian foreign-born                                  7%    18%    15%     61%
Hispanic + Asian foreign-born              30%    25%    15%     30%
White non-Hispanic native-born              3%   26%    29%      42%

The bipolar profile reflects the estimates that foreign workers comprise 75% of hired farm labor and 32% of computer programmers.

Now, multiple generations of immigrants have been carefully studied. Among Hispanics, about 36% are first generation and 34% are second generation, and 30% older than second generation (see Chart 1, here). (I cannot find data on multi-generational Asians.) This means that total “Hispanic native born” is about 55% second generation and 45% third or older generation. The table below shows that educational attainment of native-born Hispanics is much improved. So is it the case with native-born Asians. The bi-modal profile of the groups combined disappears, but educational status combined remains well below that of native-born whites.

…………………………………………………< HS    HS   < BA   BA plus
Hispanic native-born                               10%   31%  33%    25%
Asian native-born                                      3%  13%  21%    62%
Hispanic and Asian native-born                 9%  28%  31%    31%

The foreign worker demographic has both grown tremendously and shifted internally in the past 30 to 40 years. A close look might show that the bipolar profile has increased, especially with the rapid growth of Asian immigrants. An explanation of the decline of the middle class can’t be sufficient without taking this demographic into account.

Milestones in foreign-born farm workers in America, 1900 – 2016

“Agriculture is unlike most other key sectors of the North American economy in that its comparative advantage as rested on having access to abundant low skilled labor instead of the accumulation of human capital (education and skills)” From a Migration Policy Institute 2013 report on agriculture.

Today there are about 2.1 million farm workers, of which about 1.25 million are hired hands, and of these about 75%, or about 950,000 are foreign-born workers. This workforce size is comparable to the roughly 700,000 foreign-born cooks and 800,000 foreign born maids and housekeepers.

Milestones:

Late 19th Century: large numbers of farm workers were Chinese. Japanese and Filipino, but Chinese Exclusion Act of 1882 induces farm owners to import Mexican workers.

1920s – 1930s: American agra-business hires many of the roughly 150,000 new Mexicans crossing the border, most illegally. But economic troubles in U.S. lead to deportation of Mexican farm workers. Border control is re-organized and made tougher in 1924. Many Mexicans repatriated illegally. (California enacted in 2005 a formal apology.)

New Deal labor protection laws exclude farmworkers (such as Fair Labor Standards Act of 1938, and state workers’ compensation laws exclude farms.

1942 – 1964: Bracero guest worker program launched (term refers to Spanish word for manual labor), extended in 1951, terminated in 1964. Brought in 5 million legally authorized workers. averaging 200,000 per year. Law suits are still active to obtain illegally withheld compensation.

1954: Operation Wetback: in response to concern about illegal migration by Mexicans, this program repatriated over 3 million Mexicans.

1960s – 1970s: United Farm Workers was organized, led to 40% improvement in wages, then suffered from internal strife.

1980s – 1990s: Hispanic workers dominated hired farm labor; over 50% of California workers were undocumented. Hispanic workers expanded beyond fruits and produce to meat processing plants throughout U.S. Temporary visa programs (H2-A and H2-B) provided through today very small shares of Hispanic agriculture workforce.

1990s – present: continuing trade-offs between cheap Hispanic labor and mechanization See this 2007 posting which analyzes the state of the issue in 2007.

 

Amazing visualization of U.S. immigration since 1820

Here it is. Here is the data in a pdf document.

By Max Galka. “Max Galka is an NYC-based entrepreneur (my newest project: FOIA Mapper), formerly a trader/modeler of financial and insurance risk. I’m fascinated by data visualization and the ways that data is transforming our understanding of the world. I spend a lot of time with my face buried in Excel, and when I find something interesting I write about it here and as a contributor for the Huffington Post.”

Virginia and the Presidential Vote: more influenced by Hispanics and Asians

Virginia is increasingly a contested state in presidential elections, in part due to the rise of non-white eligible voters. This November, the percentage of eligible voters who are minority (Hispanic, Black and Asian), will be around 30% compared to 26% in 2008.

Between 2008 and 2014, eligible Hispanic voters as a share of all eligible voters rose from 3% to 4.6%. Eligible Asians rose from 3% to 5%. Eligible Blacks remained at 20%. Combined, eligible non-whites rose from 26% to 29%.

According to the NY Times, during the 2012 presidential election, when 71% of Virginia’s voters went to the polls, Obama carried 93% of the black vote, 64% of the Hispanic vote, and 66% of the Asian vote, according to exit polls.

Hispanics in Virginia are on average more formally educated than Hispanics in the country, notably in a much smaller share without a high school diploma (13% vs. 22%) and higher share of those with a college degree (27% vs. 16%). As for household income, 42% of Hispanic households in Virginia had incomes of $100,000 or more, vs. 23% nationwide.

Also, the potential Hispanic voting power has sharply increased. In 2014, Hispanics accounted for 4.6% of the eligible voters. 38% of the Hispanic population was eligible to vote, compared with 42% of the entire Hispanic population in the country. This is a marked improvement in Hispanic voting power in the state from 2008, when 2.7% of eligible voters were Hispanic, and 32% of Hispanics were eligible to vote. 32% of eligible Hispanic voters are naturalized citizens, rather than citizens at birth. (This is higher than Hispanics nationwide, at 25%).

In 2010, 6.4% of Virginians spoke Spanish as the primary language at home. Among Asians (Korean, Vietnamese, Chinese and Philippine), 2.5% spoken their native language at home.

 

Some facts on immigrants in high skilled jobs

The Migration Policy Institute reports that foreign-born workers account for at least one quarter of employment in three major high skilled job groupings:

computer/mathematical, 32%

physicians/dentists/surgeons 26%

other sciences/engineering 24%

Of the state’s entire skilled workforce in 2008, 30% in California were foreign born, and 24% in New York.

But for many highly skilled foreign-born workers, the job market isn’t rosey. MPI also reported on the brain waste of highly educated immigrants working at jobs beneath their skill level. The main reasons: non-recognition of foreign academic and professional credentials and limited English proficiency.

MPI’s data (as I understand it) suggest that on the order of half of immigrants with a college degree earned outside the U.S. take jobs below their skill level. Among those foreign born who got their education in the U.S., a much higher share are employed in high skilled jobs.

Poll: Trump vs Clinton supporters on immigration

The Pew Research Center for U.S. Politics and Policy released in late March results of polling voters about immigrant among other issues. Summary results are here, more in depth analysis here. For the complete poll report, go here.

Since the early 1990, Pew’s polls show that positive views were initially a minority but in about 2006 positive views exceeded negative views. What appears to have happened is that Republican views did not change much but Democratic sentiment swung very positive stating in about 2006. (See graphs here).

Are immigrants a burden? Trump supporters say yes, Clinton’s, no.

Overall, Pew reports, 57% of all registered voters say that immigrants in the United States today strengthen the country because of their hard work and talents, while 35% say they are a burden because they take jobs, housing and health care. Among those who support Trump, 69% say immigrants are a burden. Among Clinton supporters, 17% say that immigrants are a burden.

Legal path for undocumented immigrants: Trump supporters no, Clinton’s, yes.

Even when most Republican registered voters say immigrants are a burden on the country, 57% also say there should be a way for undocumented immigrants currently in the country to stay legally, if certain requirements are met. Among Trump supporters, 52% say undocumented immigrants should not have a path to legal status. Among Clinton supporters, 87% say there should be a path

On deportation: Trump supporters five times more likely to call for systematic deportation.

Among Trump supporters, 42% say there should be a national law enforcement effort to deport all immigrants who are now living in the U.S. illegally. Among Clinton voters, 8% agree.

Growing diversity in the country today: not helpful for Trump supporters, helpful for Clintonites.

Among all voters, 59% say an increasing number of people from many different races, ethnic groups and nationalities in the U.S. makes the country a better place to live; 31% say increasing diversity does not make much difference either way, 8% say increasing diversity makes the U.S. a worse place to live.

For Donald Trump supporters, 39% say that diversity makes the U.S. a better place to live, 42% say it does not make a difference, and 17% say it makes it worse. Among Clinton supporters, 72% say that diversity helps, 25% – plus say it does not matter, and hardly any say it makes it worse.

Mexican workers and American farms, 1945 – 2015

Agricultural business and technology have driven the importation of foreign, that is, Mexican farm labor, for generations. This gave rise to the large undocumented population in the U.S. Here is a 70 year snaphot.

Agricultural productivity in the U.S. after World War Two has risen at a faster pace than manufacturing productivity (1.9% vs. 1.3% annually, from 1948 through 1999). Inside this productivity gain was growing use of unskilled Mexican labor.

Between 1942 and 1964, the Bracero guest worker program brought in 4.6 million farm workers. As Eduardo Porter of the New York Times observes, investment in technology generally happens when the immigrant spigot is shut, and relaxes when immigration increases. After the bracero program ended and some farm wages began to rise, machines were developed top pick tomatoes. Within a few years, by 1970, tomato harvest jobs were by by two-thirds.

But farmers still wanted more cheap hired labor. The shift from family to corporate farming after World War Two sharply increased the demand for the hired worker. In 1950, only 25% of farm labor was hired labor; by 2008, that grew to 60%. This hired labor force was filled by Mexicans.

Before the 1986, perhaps a quarter of farm workers in California were undocumented. The Act legalized over 1.1 million farm workers, known as Special Agricultural Workers. The undocumented percentage of farm workers dropped to 10%. But many of these now-legal workers moved off the farm and into better paying urban jobs. (See a 2013 analysis by Philip Martin here).

The farms were saved by a flood of new undocumented workers in 1990s. As a prior post showed, it was easy to get into the U.S. illegally. The share of California crop workers who were undocumented shot up from 10% in the late 1980s to over 50% in the late 1990s. This depressed wages. Farmers’ investments in labor-saving technology all but froze. Farmers’ capital investments fell 46.7% from their peak in 1980 through 1999.

In 2010, the average earnings of crop workers were about $9 an hour, and median weekly earnings were 60% of those of workers in comparable private-sector nonfarm jobs. The undocumented status of these workers surely accounts for much of this wage disparity. They are captive to low skilled, low paying jobs.

According to the Brookings Institute, about 60% of immigrants in farming, are “miscellaneous agricultural workers, including animal breeders,” but only 20% of native born farm workers. These workers require little more than on-the-job training, largely planting and harvesting crops, operating farm equipment, and raising animals. The higher level ”farmers and ranchers” jobs are 97% native born, only 3% foreign-born.

English proficiency rising among young Hispanics

English proficiency has risen markedly among young Hispanics, an indication of greater integration of the Hispanic population and, perhaps, access to better jobs.

According to Jens Manuel Krogstad of the Pew Research Center, this is due to more young Hispanics being born in the U.S. rather than in their country of origin.

Why this matters:

The Hispanic population has always been younger than other ethnic/racial groups in the U.S. Like all groups, the Hispanic population in the U.S. has gotten older, but with the top line growth of this population a very large share of young people are Hispanic.

Thus, English language proficiency among young Hispanics is an important barometer of immigration integration (1st, 2nd and 3rd generation).

“Of the 74 million children in the United States today, 17.5 million are Hispanic. They are the largest racial/ethnic minority group of children, and also the fastest-growing. Today, one U.S. child in four is Hispanic; by 2050, it will be more than one in three.” (This from a Pew report on Hispanic  children.)

Krogdstad reports,

When asked about their language use and English proficiency in 2014, some 88% of Latinos ages 5 to 17 said they either speak only English at home or speak English “very well,” up from 73% who said the same in 2000.

And among Latinos ages 18 to 33, the share who speak only English at home or say they speak English “very well” increased from 59% to 76% during this time…A greater share of young Hispanics ages 5 to 17 are growing up in households where only English is spoken – 37% in 2014 compared with 30% in 2000.

By comparison, English proficiency among older Latinos has changed little since 2000. For instance, among Latinos ages 34 to 49, 55% spoke English very well or only spoke English at home in 2014 – nearly unchanged from 2000, when the share was 53%. Among Latinos ages 69 and older, just 43% said they spoke English proficiently in 2014, compared with 42% in 2000.

When will half of Hispanic households speak only English?

“Why [Mexican] Border Enforcement Backfired”

A big study of immigration published recently by the National Academy of Sciences noted that immigration policy has contributed to the rise on undocumented people in the U.S.  Now about 11 million, their numbers tripled since the mid 1980. How did that happen?

Douglas Massey and colleagues published an article in March, 2016, “Why Border Enforcement Backfired.”

According to Massey, undocumented migration from Mexico to the United States was largely a circular phenomenon, but the rise of aggressive border enforcement in the 1980s disrupted this pattern, imposing no effective controls on people coming into the U.S but deterring people from leaving.

The Immigration and Control Act of 1986 awarded green cards to 2.7 million undocumented immigrants, including one million farm workers. The Act also introduced tougher enforcement. Employers were required to check on legal status – but did not. Border enforcement budgets began to rise sharply.

“Our estimates reveal that the rapid escalation of border enforcement beginning in 1986 had no effect on the likelihood of initiating undocumented migration to the United States but did have powerful unintended consequences, pushing migrants away from relatively benign crossing locations in El Paso and San Diego.”(pg. 1590). Crossing deaths multiplied (figure 6). Coyote charges rose from $500 in 1990 to $2,000 in 2000 (figure 4). But the chance of successfully crossing the border albeit with multiple attempts was close to 100% until after about 2005 (figure 5). What greater enforcement did was to discourage undocumented residents from circulating back outside. “The probability of returning from a first trip fell sharply after the 1980s, going from a high of 48% in 1980 to zero in 2010.” “The shift from sojourning to settling as a prevailing migration strategy” took place.

Massey estimates that if border enforcement had remained at its 1986 level (as measured by the spending budget) there would have been 9.7 million undocumented persons in the U.S. in 2010 instead of the actual number of 14 million (pg. 1593).

A more open border policy would have produced less permanent immigration. “Now is the time to shift from a policy of immigration suppression to immigration management” (pg. 1595). The authors say that the times of large scale immigration is over, what with demographic changes and economic improvements in Mexico and tepid job growth in the U.S.