News that misfits

National Review, June 16, 1997

"ACADEMY'S REPORT SAYS IMMIGRATION BENEFITS THE U.S. -- no huge costs are cited," read the headline on the New York Times's May 18 story about the National Academy of Sciences' report, The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Translated into English, this means: "ACADEMY'S REPORT SAYS IMMIGRATION DOES NOT BENEFIT THE U.S. -- huge costs are cited." The NAS report is a stunning vindication of the new economic research pioneered by Harvard's George Borjas and reported in NR, which has identified profound problems resulting from the post-1965 influx, and it is a rout for the Cato Institute, the Wall Street Journal editorial page, and others who have been denying or ignoring these problems. That so many media accounts missed this is a triumph of the spin doctor's art, possibly tracing back to the NAS's permanent staff, who put out a curiously misleading press release.

For consider the key points of the NAS report:

-- The current immigration has produced little or no net economic gain for native-born Americans. The NAS's estimates of such a gain range from $1 to $10 billion -- utterly trivial in the context of a $7.5-trillion economy, perhaps one-tenth of 1 per cent. America is being transformed for -- nothing.

-- Current immigration is now inflicting significant net fiscal costs on native-born Americans. Path-breaking analyses specially prepared for the NAS show that for New Jersey, one of the six states most affected by immigration, costs of immigration result in an additional net state and local tax burden per native household of $229 per year. For California, the load is a staggering $1,174 per year. (Suggesting a new referendum question; "Are you happy with current immigration into the state or would you rather have $1,174 a year?") Averaged across the entire country, immigration costs in taxes a startling $166 to $226 per native household, or $15 to $20 billion a year. (Note that this tax cost far exceeds all estimates of aggregate macroeconomic gain from immigration.)

-- Current immigrants show deteriorating skill levels, on average, relative to natives, a result of the flawed selection process begun in the 1965 Act.

-- Current immigration varies enormously in its effects according to national origin (European and Canadian immigrants are actually a fiscal plus in New Jersey) and education (the report says flatly that "if the only policy goal were the maximization of the positive fiscal impact of immigrants, the way to accomplish it would be to admit only those with the highest education"). The 1965 Act effectively discriminates against these useful groups.

-- Current immigration is responsible for an overall wage loss of perhaps 1.2 per cent for native workers in the 1980s. A small loss, but a loss nonetheless -- and one concentrated on high-school dropouts, being responsible for nearly half of their 10 per cent wage decline relative to high-school graduates.

The NAS report is mostly deadpan and prudently prolix. Immigration enthusiasts get a number of verbal, as opposed to substantive, salutes. Thus the report goes out of its way to say that blacks are not much affected by immigration. Closer reading, however, reveals that this is only because most blacks do not live in states with the highest concentrations of immigrants (and the assertion in any case is contradicted by the report's own findings on the nationwide relative wage decline of high-school dropouts, who are disproportionately black).

In a peculiar exercise in economic science fiction, the NAS report imagines a scenario where immigrants might be useful fiscally. If, in the year 2015, Washington suddenly and sharply raised taxes to avoid cutting Medicare, Social Security, and other entitlements, immigrants might then pay higher taxes, eventually becoming a fiscal positive and lowering the average tax burden by definition. (Assuming, naturally, that the economy did not collapse under such a government grab.) But even in this scenario, high-school dropouts are never a fiscal positive. Yet up to two-fifths of the post-1965 influx are in this category.

Facts and logic have not been at a premium in the modern immigration debate. But now immigration enthusiasts have no excuse at all. In the words of Joe Louis, they can run but they can't hide.