Economics

American Prosperity Depends on a Nonwhite Future

Without immigration, mostly of Hispanics and Asians, economic growth will falter.

This time it counts.

Photographer: Saul Loeb/AFP/Getty Images

If the U.S. economy is going to prosper, it needs to keep taking in immigrants. Fertility is below replacement levels, and no country has discovered a way to raise native birthrates. That means that immigration is necessary for the survival of the Social Security system and the solvency of pension funds. Immigrants will allow small cities to grow and expand their tax bases, instead of shriveling into ghost towns. Immigrants support the housing market and the stock market. They take care of elderly Americans and provide invaluable skills for U.S. corporations. Without continued robust immigration, the U.S. population will shrink and gray, and the country will start having the same problems as aging societies like Japan, South Korea, and East Europe.

But in order to keep immigration going, the country needs to accept that most new immigrants won’t be white. And that means that the U.S. is now being forced to face up to the issue of increasing diversity for the first time since the immigrant wave of the early 20th century. Today, the old racial dichotomy of white and black is gone, as Asians and Hispanics join the mix. Some on the right fear this change, and worry that it will lead to ethnic balkanization, or a breakdown in the social fabric. But a steady drumbeat of new data should reassure people that this isn’t happening -- instead, the U.S. is handling diversity better than many seem to think.

Immigration Reform

Demographer William H. Frey has written about this in his 2014 book “Diversity Explosion: How New Racial Demographics are Remaking America.” The book is a must-read for anyone who wants to understand the changing geography and demographics of the U.S. population.

Frey shows that large, traditional “gateway” cities, such as New York, Los Angeles and Chicago, are losing both white and black residents as Asians and Hispanics move in. These cities are becoming hyper-diverse melting pots, even as high rents force out existing residents. A more hopeful story comes from the suburbs, and from the areas Frey calls the New Sun Belt -- the interior West, Pacific Northwest and Southeast. In these areas, white and black Americans drawn by economic opportunity and cheaper housing are mingling with Asian and Hispanic immigrants spreading out from the big cities and ethnic enclaves. Only in parts of what Frey calls the Heartland -- the Midwest, New England, the Deep South and the Plains states -- do the old demographic patterns still hold. But white Americans are leaving these areas; there is no overall pattern of urban white flight from diversity, as there was in the middle of the 20th century.

Encouragingly, Frey shows that the new patterns of diversity don’t just hold for new immigrant groups, but for black Americans as well. As the black middle class has expanded, its members have moved to the suburbs and to growing areas in the South. As a result, Frey estimates that white-black segregation levels fell by about a third between 1970 and 2010.

Today, most U.S. minorities now live in very diverse neighborhoods. Here are numbers for the racial neighborhood makeup of the average American of each of the four racial groups Frey studies:

Mixed Neighborhoods

Source: William H. Frey, "Diversity Explosion"

White Americans, the largest and most rural group, are still the most segregated. But slowly, they too are starting to live in more diverse neighborhoods than before.

For those worried that diversity would split the U.S. into embattled ethnic bastions, this is good news. But even more encouraging are the numbers on interracial marriage. Marriage is proof that diversity isn’t just creating tensions between new and unfamiliar neighbors, but positive and lasting social bonds. A new report by the Pew Research Center provides some amazing numbers. Half a century after laws against interracial marriage were struck down by the courts, the share of new marriages that are interracial has risen from 3 percent to 17 percent. For black Americans, the rise in intermarriage has been particularly strong. But for all racial groups, marrying people of other ethnicities is a lot more common than in the past:

Finding the Right Person

Newlyweds married to someone of a different race or ethnicity*

Source: Pew Research Center

*As of 2015

The rise in intermarriage is matched by a steep decline in the percentage of Americans expressing disapproval of the concept. In 1990, 63 percent of Americans said they would oppose a relative marrying a black person. In 2016 that number was 14 percent. Meanwhile, Americans continue to be much more pro-diversity than residents of European countries, and support for immigration is very high.

Many people have worried, in the wake of the recent U.S. election, that growing diversity would lead to a sustained backlash. Donald Trump, and many of those who supported him in 2016, seemed to confirm fears of a society fracturing along racial lines. But the data tell a different story. The U.S. is becoming more integrated at the regional, neighborhood and household level. Americans say they like diversity, and they are voting with both their feet and their ring fingers. The future of the U.S. as a successful multiracial nation isn’t assured, but it’s looking more and more likely. And that should be good news for the U.S. economy, since it means growth won’t create noxious social divisions.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Noah Smith at nsmith150@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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