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The Impacts of Immigration

Perhaps the most controversial topic that has gotten a lot of attention in recent years is the question of what are the actual economic and social impacts of immigration. Many have accused immigrants, particularly those from Asia, of either taking jobs away from U.S.-born racial/ethnic minorities, particularly from Blacks, or of lowering their wages, or both. Simply put, the question is, do immigrants contribute to American society more than they receive?

Common Complaints Against Immigrants

Although academics try very hard, this question of what immigrants contribute to the U.S. is inherently very difficult to answer because there are so many ways to measure costs versus benefits. We can always refer to history to find out which old-fashioned American cultural "artifacts" have immigrant roots. As one example, in his book A Different Mirror: A History of Multicultural America, Ronald Takaki writes:

The signs of America's ethnic diversity can be discerned across the continent . . . Chinatown, Harlem, South Boston, the Lower East Side, places with Spanish names like Los Angeles and San Antonio or Indian names like Massachusetts and Iowa. Much of what is familiar in America's cultural landscape actually has ethnic origins. The Bing cherry was developed by an early Chinese immigrant named Ah Bing. . . . The "Forty-Niners" of the Gold Rush learned mining techniques from the Mexicans; American cowboys acquired their herding skills from Mexican vaqueros and adopted their range terms -- such as lariat from la reata, lasso from lazo, and stampede from estampida. Songs like "God Bless America," "Easter Parade," and "White Christmas" were written by a Russian-Jewish immigrant named Israel Baline, more popularly known as Irving Berlin.
While immigrants have certainly left their cultural mark on American society, for most people, the issue comes down to dollars and cents. Let's take a look at specific complaints that have been made against immigrants. Again, research and statistics can always support both sides of the story, depending on how you use them.

"Immigrants take away jobs from native workers." Many academics, including perhaps the most famous sociologist alive today, William Julius Wilson, generally find that one of the main reasons why many immigrants work in low-paying jobs in the service sector is because U.S.-born workers don't want them. In other words, there is a demand for their labor because many low-income American workers frequently will not take those kinds of jobs.

In fact, immigrants can actually generate more jobs. Many case studies show that immigrants have revitalized old dying industries such as shoe manufacturing, the garment manufacturing, and agriculture. These industries were failing because they were inefficient and could not complete globally. Immigrants who work for low wages have helped to turn many of these industries around. These revitalized industries then create new positions for managers, professionals, and other workers. Immigrants also work in service sector jobs that allow middle class Americans to maintain their standard of living (i.e., in restaurants, hotels, personal services, construction, cleaning, maintenance, etc.).

More immigrants = more workers © Paul A. Souders/Corbis

"Immigrants abuse the welfare system." Of those immigrants who arrived in the U.S. after 1980 and were not refugees, only 2.8% receive public assistance. That compares to 4.2% for the U.S.-born population. Refugees who arrived after 1980 have a rate of 15%, which is understandable because they did not come here voluntarily and had little preparation and skills.

To the contrary, many supporters of immigration argue that because such a large portion of recent immigrants are young, it is likely that they will actually produce significant benefits for our social security system. Specifically, since the elderly population of the U.S. is growing considerably each year, the social security system will need more workers to help support these retirees. Immigrant will provide that help for many years to come because they tend to be much younger than U.S.-born workers.

Economists use the dependency ratio to illustrate this point. The ratio is calculated by adding the total number of people who are under age 18 (A) with the number of persons 65 or older (B), divided by the number of people between ages 19 and 64 (C). The first two groups (A plus B) represent populations who generally do not work. The last group (C) is the group who has to support the other two.

A high dependency ratio is bad while a low number is good. With more immigrants working, the lower the ratio, the more social security revenue will be generated, and the less U.S.-born workers will have to pay into social security. In fact, some argue that if immigration is significantly reduced, the more likely the social security system will go bankrupt because there won't be enough workers to support the growing elderly population in the US.

Is There a Definitive Answer?

How do we answer the question of whether or not immigrants receive more benefits than they contribute? Again, it is a very controversial issue because it all depends on how we measure costs versus benefits. Some benefits that immigrants contribute, such as income and sales taxes are relatively easy to measure. But what about more subjective measures, such as increased productivity and profits for businesses that employ immigrants?

Or what about the argument that in the process of helping businesses become successful, immigrants create new jobs for U.S.-born workers? On the other hand, what should we consider as the costs of immigration? Even a "direct" measure such as the additional money spent for education and other social services for immigrants can become a little tricky to measure accurately. There are also "indirect" costs, such as if immigrants take away a U.S.-born worker's job, then that worker contributes less to the U.S.'s overall tax base. On the other hand, if immigrants create new jobs, then U.S.-born workers contribute more to tax base.

Once again, it all depends on how researchers measure benefits versus costs, which population(s) and which sub-groups within each population to study on each side of the equation, the size of the geographic area within which to examine immigrant effects, and which effects to measure. Different permutations will yield different results. Nonetheless, the most comprehensive analysis performed to this point is from the National Academy of Sciences, which concludes that overall, immigrants contribute many more benefits to the U.S. economy than they consume.

Chinese miners in the 1800s © Time Magazine

The study estimated the overall contributions of immigrants to be around $10 billion per year. However, considering that the whole U.S. economy is valued in trillions of dollars, $10 billion really isn't that much, but it's still a good chunk of change. At the same time, the study also noted that benefits differed at local, state, and federal levels. As most of the taxes paid by immigrants are collected at the federal level, local and state levels reap less benefits from immigrants and can even experience negative fiscal impacts, especially since they are immediate points of providing most of the social and medical services to immigrants.

Also, because most immigrants cluster in a handful of states (i.e., CA, NY, TX, etc.), these states must bear a disproportionate share of the cost. Finally, researchers generally find that as more immigrants enter a particular geographic area, they generally don't take jobs away from Blacks because immigrants tend to work in different types of jobs -- either jobs that Blacks don't want at the low end or are not qualified for at the high end. There are exceptions of course, and immigrants do sometimes compete directly with native-born American workers -- Vietnamese refugees competing with Whites in the shrimp industry was a recent example, a situation that also led to violent anti-Asian incidents.

Some research also finds that immigrants may cause employers to lower the prevailing wages. That is, there's enough competition for jobs among immigrants and Blacks so that when companies have more applicants than positions available, due to the principles of supply-and-demand, they can pay people less because there are enough applicants who are willing to work for lower wages.

In short, while the research is mixed, the majority of it (more than half) generally conclude that immigrants offer more benefits than they receive. Evidence shows that immigrants (especially Asian immigrants) can actually improve the wages & employment rates for skilled native workers by revitalizing dying industries. However, studies tend to show that immigrants may slightly lower the wages of unskilled U.S.-born Black and Latino workers. In summary, Asian immigrants don't take jobs away from Blacks but they do tend to lower their wages.

The Controversy Never Ends

Economic questions are tough to answer. Cultural ones are even harder. What about the complaint that "immigrant cultures and communities will divide the US." The major component of that issue is the question of whether bilingualism is good for the U.S. This issue is inherently more of a subjective debate, so here's my opinion.

Do immigrants want to learn English? The resounding answer from the vast majority of Asian immigrants is "Yes" -- if they aren't already fluent in it. Obviously, the first generation of immigrants is more likely to be older and less fluent in English. However, research consistently shows that across virtually all immigrant groups, about 95% of the second generation are completely fluent in English.

This process of language assimilation is very strong in the U.S. In fact, international research points out that in no other country have foreign languages been extinguished so quickly than in the U.S. Studies also consistently show that the longer an immigrant lives in the U.S., the better his/her English ability. The point is, English is alive and well in immigrant communities.

Nonetheless, there have been and continue to be efforts to make English the official language in a city, county, state, and even nationally. These Official English campaigns argue that English should be official language of the U.S. because it will encourage a common culture. Most Official English provisions prohibit bilingualism classes and prevent governments from printing official documents and materials in any foreign language.

I would argue, as many others do, that Official English is a bad policy because it will actually hinder social integration and common cultural understandings. Point 1 -- English is already the de facto official language of the U.S. with about 92% of the entire population already fluent in it. Laws are unnecessary to reinforce that.

South Asian immigrants at home © David H. Wells/Corbis

Point 2 -- those immigrants who want to learn English and want to integrate into society need help in doing so. They know they need English to succeed in American society. That's why bilingualism classes help them. Also, they want to participate in our political and social institutions, such as voting, but they need help. If we take away bilingual government documents and materials, immigrants will be discouraged from voting because they won't understand the process and the issues.

Therefore, Official English will have effects that are contradictory to its intentions -- it will discourage social integration because it prohibits immigrants from using the necessary tools to help them learn about U.S. society and integrate into it. To me, Official English is a government-sponsored slap in the face to immigrants. It is the government telling immigrants that they don't care about our "primitive" and "inferior" culture or language. It is forced conformity, prejudicial, discriminatory, and wrong.

Also, there is the issue of denying benefits to legal immigrants, which was a part of the Welfare Reform Act of 1996. Among other things, this act denies benefits, such as public assistance, educational loans, and medical services to legal immigrants for the first five years they live in the U.S. Fortunately, much of these provisions were later repealed because politicians and the U.S. judicial system understood that legal immigrants are entitled to use these resources because they contribute to them through their taxes.

The issue of immigration is almost certain to be a controversial issue for years and decades to come. Again, this is such a political issue that people will believe whatever they want to believe and use all kinds of statistics to support their particular point of view. I personally find it sad that so many people are so intent on denying immigrants their rights and fair opportunities -- rights and opportunities that their immigrant ancestors enjoyed when they first came to the U.S. so long ago.

Author Citation

Copyright © 2001- by C.N. Le. Some rights reserved. Creative Commons License

Suggested reference: Le, C.N. . "The Impacts of Immigration" Asian-Nation: The Landscape of Asian America. <> ().

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