Wednesday, May 17, 2006

Robert Samuelson on the intersection between immigration and the increasing number of elderly

Robert Samuelson, here, in Newsweek (via RCP) on the intersection of issues driving both the aging population and immigration. He argues against law wage, low skills immigration in favor of high skills immigration.

May 17, 2006

Dodging Immigration's Truths

By Robert Samuelson

WASHINGTON -- President Bush's immigration speech mostly missed the true nature of the problem. We face two interconnected population issues. One is aging; the other is immigration. We aren't dealing sensibly with either, and as a result, we face a future of unnecessarily heightened political and economic conflict. On the one side will be older baby boomers demanding all their federal retirement benefits. On the other will be an expanding population of younger and poorer Hispanics -- immigrants, their children and grandchildren -- increasingly resentful of their rising taxes that subsidize often-wealthier and unrelated baby boomers.
Does this look like a harmonious future?

But you couldn't glean the danger from Bush's Monday night speech. Nor will you hear of it from most Democrats and (to be fair) the mainstream media. There is much muddle to our immigration debate. The central problem is not illegal immigration. It is undesirably high levels of poor and low-skilled immigrants, whether legal or illegal, most of whom are Hispanic. Immigrants are not all the same. An engineer making $75,000 annually contributes more to the American economy and society than a $20,000 laborer. On average, the engineer will assimilate more easily.

Testifying recently before Congress, University of Illinois economist Barry Chiswick -- a respected immigration scholar -- said this of low-skilled immigrants:

``Their presence in the labor market increases competition for low-skilled jobs, reducing the earnings of low-skilled native-born workers. ... Because of their low earnings, low-skilled immigrants also tend to pay less in taxes than they receive in public benefits, such as income transfers (e.g., the earned income tax credit, food stamps), public schooling for their children, and publicly provided medical services. Thus while the presence of low-skilled immigrant workers may raise the profits of their employers, they tend to have a negative effect ... on the native economy as a whole.''

Hardly anyone is discussing these issues candidly. It is politically inexpedient to do so. We can be a lawful society and a welcoming society simultaneously, to use the president's phrase, but we cannot be a welcoming society for limitless numbers of Latin America's poor without seriously compromising our own future -- and indeed, the future of many of the Latinos already here. Yet, that is precisely what the president and many senators (Democratic and Republican) support by endorsing large ``guest worker'' programs and expansion of today's system of legal visas. In practice, these proposals would result in substantial increases of low-skilled immigrants.
How fast can they assimilate? We cannot know, but we can consult history. It is sobering. In 1972, Hispanics were 5 percent of the U.S. population, and their median household income was 74 percent of that of non-Hispanic white households. In 2004, Hispanics were 14 percent of the population, and their median household income was 70 percent of the level of non-Hispanic whites. These numbers suggest that rapid immigration of low-skilled workers and rapid assimilation are at odds.

The difficulties are obvious. Competition among them depresses wages. Social services are stretched thin. In 2000, children of immigrants already represented a quarter of all low-income students in U.S. schools, reports an Urban Institute study. The figure is probably higher today. The study also reports that immigrant children are rapidly spreading beyond the six states where they had traditionally concentrated (California, Texas, Florida, Illinois, New York and New Jersey). This may explain why immigration has suddenly become such an explosive issue. '
There are striking parallels between how we've treated immigration and aging. In both cases, the facts are hiding in plain view. But we've chosen to ignore them, because candor seems insensitive and politically awkward. Who wants to offend the elderly or Latinos? The result is to make our choices worse by postponing them. A sensible society would long ago have begun adapting to longer life expectancies, better health and greater wealth by making careful cuts in Social Security and Medicare. We've done little.

Unfortunately, the two problems intersect. The tax increases required to pay for existing federal commitments to the elderly are on the order of 30 percent to 40 percent. People who don't think there will be conflicts between older beneficiaries and younger taxpayers -- Hispanic or not -- are deluding themselves. People who imagine there won't be more conflicts between growing numbers of poor Latinos and poor African-Americans for jobs are also deluding themselves.

As the president says, we need a ``comprehensive'' immigration policy. He's right on some elements: controlling the border; providing reliable identification cards for legal immigrants; penalizing employers that hire illegal immigrants; providing some legal status for today's illegals. But he's wrong in wanting to expand low-skilled immigrants. In his testimony, economist Chiswick rightly argued that we should do the opposite -- give preferences to skilled immigrants. We should be smart about the future; right now, we're not.


Publius said...

Bush and the Senate’s plan recreates what was assumed to be a long-ago extinct practice of indentured servitude when this country was still a colony. Immigrants from Europe would agree to work for a set number of years in exchange of passage into the country/colony. After the number of years had expired they were allowed to become full members of the society. But, indentured servitude did not work so the colony turned to slavery instead.
Not that the two paths will lead to the same end, but the parallels are quite familiar.

Anonymous said...

What you are describing is what occurs when “some individuals move from one country to another.” A phenomenon that may be “controlled politically, restricted, encouraged, planned, or accepted. What the US is experiencing, on the other hand, is not immigration but Migration. Migration is a “natural phenomenon: it happens, and no one can control it.” Migration is an extreme catastrophe, where instead of assimilating into the culture into which a people moves, (as what happens with immigration) an entire population moves into an area and changes the political, cultural, and economic make up of a country or area. This phenomenon has happened many times throughout history and, and it is at work all over he Western hemisphere today.

Independently of what we may call it; a country in which 25 to 30% of the population identifies with another country, votes and participate in another countries election and remits most of their savings to another economy cannot be called the United States of America.

The immediate economic result of such massive migration is an erosion of the quality of life, an escalation in crime, a diminished life expectancy, literacy rate and infant mortality of our population just to mention quantifiable changes.

Notwithstanding that some poor as a whole may benefit from being poor in an environment where poverty is richness as compared as the areas where they originate. In the long run openness to migration results in a disincentive to the needed ethical and political changes in the countries were the migrants originate.

The reason why our politicians are showing no leadership and constantly babble incoherent slogans is due to the fact that very soon; sometime within the next nine years the cost of Medicare-Medicaid and Social Security combined will exceed the revenue from employment taxes that have been used until now to cover for excessive government spending of the last quarter of century. When that event arrives the cost of these services would have to be paid in part with funds from other sources, meaning that Social Security and Medicaid-Medicare will be in competition for money with all other government programs including the military

The meaning of this is that future governments would have no choice but to raise taxes or cut services to an elderly population. Unless they can convince a population of minority third world workers to pay increased taxes while receiving less services. The problem with that equation is that low skilled workers pay a smaller percentage of the tax burden while consuming more services. One $80,000 engineer produces more government revenue and uses less government services than four $20,000 agricultural workers.