14 January 2024
Edward Lotterman
Immigration, both legal and illegal, has been a contentious issue in the U.S. for more than a hundred years and now is taking a particularly central role in the 2024 election.
This is a complex economic issue that affects nearly everyone in the U.S., whether they know it or not.
Effects are diverse. Many people’s lives may be made better by one effect of immigration and worse by another — often at the same time.
Immigration is important at a macro level, affecting our nation’s economy as a whole. Yet for many people, the sharpest effects are microeconomic — affecting individual people, companies or communities.
Taking a step back and considering basic facts and economic principles involved is helpful.
Data from the federal government’s American Community Survey show that at the end of 2022 there were 46 million people in the U.S. who were born in other countries. This comes to 14% of the total population. This was an increase from 36 million, or 12% of the population, in 2005. The annual average over those 17 years would be around 600,000, but the rate is not stable. Some 1.2 million people entered in 2022 and the total for 2023 will be even higher.
We have had periods of very high immigration before, particularly between the end of the Civil War in 1865 and the outbreak of World War I in 1914. The influx seen in eastern cities like New York and Philadelphia aside, more locally, that was also an era of European settlement in Minnesota, with high influxes from Scandinavia, the Low Countries, Germany and parts of the Austrian empire. Nearly all came legally — and that was not hard because of our near complete openness in whom we admitted. As with today’s influx of East African and East Asian peoples in Minnesota, small numbers of immigrant settlers quickly became large and influential communities.
In absolute terms, we are at a record number of total foreign-born people in the U.S. population. As a percentage of the total, we remain a bit below the 15% of the 1890s. Since we hit 31 million foreign-born residents in 2000, numbers have increased again by half. Note that because some foreign-born people die each year, the number of new immigrants over any period has to exceed the net change.
Our history of immigration as a political issue has almost always focused on ethnicities, and today it’s entirely on our southern border and on physically blocking movement across it. However, that is only one source of migrants. Perhaps surprising to many, people coming in legally by air and then simply “overstaying” their visas have outnumbered southern border crossers over many years.
Our history of it as an economic issue has centered mostly about jobs, housing and welfare. More about that in a bit.
Also, we episodically admit large numbers of refugees. As noted above, the wave of people fleeing Vietnam and Laos in the decade after 1975 changed the population, culture and cuisine of St. Paul tremendously.
Over 90,000 Afghan refugees have arrived since the U.S. withdrawal there in 2021. This is tiny compared to the numbers who fled to adjoining countries like Pakistan. Since early 2022, we also have taken in over 30,000 Ukrainians. Most got in because they had some family or other ties here, but several thousand gained individual refugee status. We also have set up special categories for those fleeing female genital mutilation or violence because of their LGBTQ identities. But it is hard to determine on a case-by-case basis the degree to which their situation is true.
So political policy is bedeviled by establishing a distinction between people migrating to flee political, religious or sexual persecution, discrimination, or gang violence versus those migrating to earn more money and have more prosperous lives. Here’s where the economics and politics collide, but the problem is that one cannot neatly divide people into these binary categories.
On paper, we have a legal commitment to give applicants for asylum a full and fair hearing on their circumstances. But full due process of the veracity and severity of claimed persecution often requires more time and resources than overloaded U.S. immigration courts have to do the job. It might require foreign travel for the investigator or an army of contract investigators in myriad other countries, often ones in which poking into the facts of persecution would put the investigator into grave danger. So we have a backlog of over 1.6 million asylum applications pending resolution.
Most Americans don’t understand the issue of asylum seekers and, if questioned, may advocate simply revoking any special treatment for refugees. The catch is that we have signed international treaties in which we promise to follow certain rules. These were negotiated decades ago by past administration, primarily those of Truman and Eisenhower, and ratified by the Senate.
We could simply renege on such past promises. After all, that is what Donald Trump did with past trade treaties. His de facto repudiation of past promises made by us have largely been continued by his successor, Joe Biden. Yes, there is cynical opportunism in every country’s foreign policy at some point. But repudiating promises we made in the past does undermine our credibility, and that will come home to roost sooner or later.
As for economic issues, considerations of supply and demand enter in. What factors, other than expected earnings, affect potential migrants’ willingness to make their often difficult treks? Consider the ease of travel and communications. The wide-body jet has replaced the steerage ships of the last century, so, for example, one can get from many countries in Africa or Asia to Central America in one or two relatively cheap flights and then make one’s way on to the U.S. southern border. Adjusted for inflation, international air travel costs only a fraction of what it did 50 years ago.
Moreover, the internet and smartphones also facilitate many steps. It now is easier for smugglers and migrating customers to find each other, particularly if one already has some relative or other contact already in the United States.
Now consider the demand side — who wants these immigrants here? This issue also goes back centuries, including Irish men to work building canals and railroads before the Civil War, women from southern and eastern Europe for the burgeoning garment industry sweatshops of old New York, and Slavs from the same regions for mines, steel mills and heavy manufacturing.
Today, thousands of non-documented Hispanics work on large dairies in the upper Midwest. Many more work in meat-cutting plants, on farm fields picking fruit, or in hotels cleaning toilets. When a business owner needs another worker, they don’t go to the parking lot of a building products store to pick up someone waiting for a job. Instead, they talk to their Mexico-born foreman about relatives or neighbors back home with skills and a good work attitude.
This demand side for workers is ignored in angry calls to “control our borders,” even as those same people inadvertently benefit from immigrant labor every day. While many Americans see migration as an invasion, many migrants see it as a job fair. Hundreds of thousands of U.S. employers don’t blink an eye at hiring someone with dodgy papers, and yet some of these same people may support a candidate because of their promises to curtail illegal immigration.
The hypocrisy cuts across all sectors — from large employers to households happy to find a low-price, docile roofing or driveway contractor while tut-tutting about illegals. And to high-income, high-education white collar liberal “elites,” who sneer at xenophobic outcries against immigrants, knowing these immigrants won’t compete for their upper-class jobs or housing or go to the same schools as their kids.
Much more could be said. Nobel laureate Milton Friedman would scoff at our efforts to “control the border” without penalizing employers of non-legal workers. Other economists look at a rapidly aging population and plunging birthrates and warn of labor shortages not far into the future. More on all this in a week or two.
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St. Paul economist and writer Edward Lotterman can be reached at [email protected].