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The Economic Progress of Immigrants

? U.S. R&D spending rose in 2004 |


| Short term pessimist, long term optimist ?

December 02, 2005

The Economic Progress of Immigrants

Michael Mandel

I did a story this week for BW on the continuing economic progress of immigrants. Here's a piece of it:

The good news is that the American melting pot still seems to work. The latest data show big gains since the mid-1990s for immigrants on the key measures of economic performance -- education, poverty, homeownership, and unemployment. In some cases, immigrants have shown bigger improvements than native-born Americans. "America has done extremely well in assimilating immigrants," says David Card, an economist at the University of California at Berkeley.

True, questions remain about the assimilation of illegal immigrants, many of whom are unskilled. Creating a class of "temporary workers" who have to go home after a few years -- as President George W. Bush again advocated in a speech on Nov. 28 -- might exacerbate the problem by lessening the incentive for immigrants to learn English and become "more American."

Nevertheless, immigrants from Mexico and elsewhere in Latin America, who make up most of the illegal population, have enjoyed improving fortunes in recent years. Unemployment for Latin-American immigrants fell from 10% in 1996 to 6.8% in 2004, even as unemployment for natives rose from 5.9% to 6.1%.

Some other immigrant facts:

Since the New Economy boom started in 1996, the poverty rate for immigrants has fallen from 22.2% to 17.2% (that's for 2003, the last figure available). The share of immigrants with a bachelor's degree or better has also climbed from 23.5% to 27.3%, just below the level for native-born Americans.

01:48 PM

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Yes, this is America's greatest competitive advantage over any other country.

But political correctness conceals information that could help us tweak immigration policies.

The gap between the top and bottom immigrants are even more extreme than within US born people.

Indians, Chinese, Koreans, Israelis, etc. do the best, almost always reaching upper-middle class status within a few years of arrival.

Illegal Mexicans, however, not only are poor, but burden the health and law enforcement infrastructure, feel encouraged to break laws in the first place (since they know America will not reprimand them for being illegal), and distort demographics since 90% of illegals are male (further increasing crime, etc.)

If we need millions of low-skill Mexican laborers for economic reasons, so be it. But at least make it possible through legal means, so that the immigrants start out by ABIDING the law, and so that the gender ratio becomes more normal, AND so that these immigrants are distributed throughout the whole US, rather than just border states where non-Mexicans are being outnumbered. To continue as we are now has got to be the dumbest thing in the world.

Posted by: Kartik at December 2, 2005 02:17 PM

On a somewhat similar subject.

We know how household wealth is greatly skewed, where the top 1% control 40% of the assets, and the bottom 40% control barely 1%, etc...

Putting fact-concealing political correctness aside, we can estimate that this also means :

1) Indians, Chinese, and Jews, amounting to just 3% of the US population, probably control 25% of US household wealth.

2) Blacks and Hispanics, amounting to 25% of the US population, probably control just 2% of US household wealth.

3) Christian Whites are in the middle. ~70% of the population, ~70% of US household wealth.

There are varying opinions as to why this is, of course.

Posted by: Kartik at December 2, 2005 02:24 PM

Mike, do you think this data accurately accounts for illegal immigrants? Hard to see how one would gather the data on people who have no interest in being identified..

Posted by: David Foster at December 2, 2005 04:15 PM

Hi David,

Actually, the consensus is that CPS does surprising well at picking up illegal immigrants. Here's what a September 2005 paper from the Dallas Fed said:

This methodology suggests that the CPS does contain illegal aliens, although they are almost certainly underrepresented in the survey. Estimates of the CPS undercount change over time. In the late 1990s, for example, the CPS probably missed between one-quarter and one-third of illegal immigrants (Passel and Fix 2001). Post-2000, the undercount is thought to be much improved, with the CPS covering about the same share of the illegal immigrant population??bout 90 percent??s the 2000 Census (Passel, Van Hook, and Bean 2004).

So today's undercount is relatively small. Another question, then, is whether the improvement in the coverage of illegal immigrants may be creating a spurious improvement in the unemployment and poverty data. That's unlikely, however, unless illegal immigrants have a much lower unemployment and poverty rate than legal immigrants.

Posted by: Mike Mandel at December 2, 2005 07:30 PM

Mike ,Please refer to the last paragraph of your post.1]Since 1996 poverty rate for the immigrants has fallen from 22.2% to 17.2%

2]Share of immigrants with batchelor's degree or better has climbed from 23.5% to 27.3%

My question is,is there any any economic theory which explains the correlation between the decrease in poverty and increase in the level of education in a particular group?

Posted by: jit at December 3, 2005 01:46 AM

It says we are good at creating jobs that natives are not willing to take. More work would imply less poverty. Poverty is such a low standard though whether they are really any better off is questionable. I wonder how much of the falling percentage of income in the lower four quintiles are due to them.

Posted by: Lord at December 3, 2005 03:55 PM

The Melting Pot never truly happened: it's an anachronistic term, used retroactively, to justify and white-wash America's past addictions with cheap labor. The difference between 1860 and 2005 is that we no longer have an unlimited supply of recently evacuated Indian land to hand out to German, Irish and Scandinavian farmers (my gg-grandfather got his 160-acre chunk of former Potawatomie land for a buck!!) in exchange for cheap, plentiful food, and a more secure Western border. Assimilation? Once the German and Irish Protestants figured out that they were economic patsies, they eschewed emerging, urban sweatshops,and formed micro-economies that catered almost exclusively to their own demographic (sound like a bodega??) ... necessitating new blood: Italians, and Irish and German Catholics! Now the new blood is Mexican. Try this out: one of the reasons that the post-war era of Eisenhower (our single German-American President) is so near and dear is that it was the one of the few times in our history when we were NOT deluged with a lot of semi-assimilated immigrants. Frankly, I miss my childhood, when my dad made paint, the guy next door ran a lathe, and the guy next door to him was a butcher - he lived next door to a guy worth a million. We shared common values, spoke the same language, and all enjoyed a reasonable standard of living. Life was good, once upon a time in America.

Posted by: Larry B in OP at December 9, 2005 02:33 AM


Why did you posted Kartik's first diatribe? "Illegal Mexicans are poor... burden health infrastructure... break laws... distort demographics... bla, bla, bla"

Where is the data to support the arguments? In that context, the same can be said of poor Whites, Blacks, Chinese, Koreans, Indians...

Of course, the reason there are many Mexican illegals is the income diferential and close country proximity, but also United States' job availability.

The real problem for the US is the "tunnel vision effect" and scarce historical memory its citizens have (US born and recently legalized Aliens alike), think Arnold Schwarzenneger type of mentality, "you are not welcome, but we need you".

Any economic theory can explain this irrational behaviour?

Posted by: Clemente at December 10, 2005 01:27 PM

Hi Clemente,

Yes, Americans (native born and recently legalized) do have split feelings towards immigrants. Having said that, the U.S. still generally comes down on the side of being welcoming, eventually. By comparison, Europe and Japan have much more consistent hostility towards immigrants.

Posted by: Mike Mandel at December 12, 2005 08:59 AM


You should have known from my name that I am either an immigrant or son of immigrants myself.

The difference is LEGAL immigration vs. ILLEGAL immigration. Most Mexicans are here illegally.

And most Mexican illegals are poor. Indians, Chinese, Koreans, etc. usually have a college education or higher when they arrive - again, through LEGAL means like H1-B, Student Visa, etc.

I would have no problem with it if it were through legal channels. This would reduce crime, gender imbalance, and taxing the health-care/law enforement infrastructure.

But ILLEGAL immigration, from Mexico or anywhere else, is certainly not good for America.

Posted by: Kartik at December 12, 2005 01:32 PM

The phenomenon of Mexican immigration (i.e illegal immigration)into the U.S. is a unique phenomenon in the annals of immigration. That is due to the sheer numbers of illegal immigrants who don't speak English. This is an unprecidented situation. If this trend continues unabated and the projections of 40 to 100 milion Latino immigrants in the next 20 years becomes a reality Spanish will be the "other" language of the U.S. We will become, truely, a bilingual nation.

Posted by: Bill Overton at July 22, 2006 09:58 AM

i think the people from asian countries are a great asset to this counrty as they study get educated and most are at least middle income but i have to say people that arrive here and try to beat the system and hang around in bunchs we don't need. many of the spanish speaking people find out real quik how to get welfare ,but seem to not care about learning english and joining the work force. i was taxes for all the years i worked to help support this group and it is time it was addressed,

Posted by: lawrence at January 27, 2007 12:15 PM

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