Immigration Exaggeration

by Steven Camarota
Immigrants are not a “secret weapon” to slow down population aging or revive the economy.

In their recent article for NRO, Lee Habeeb and Mike Leven make almost every mistake common to immigration enthusiasts. First, they grossly overstate the degree to which immigration will slow down the aging of America. Second, they make the argument that the country needs more workers (skilled and unskilled), ignoring all the evidence that the country has a huge surplus of unused labor. Next, they mistakenly think that because most immigrants come to work, they make little use of the welfare system. Finally, they imply that immigrants are super entrepreneurs, which is not the case.

Habeeb and Leven’s central argument is that immigration is America’s “secret weapon” when it comes to aging. “It’s our immigrant population that has kept America from falling over the demographic cliff of late,” they write. This is simply wrong.

While immigrants often arrive young and have somewhat larger families than natives do, the differences are not large enough to fundamentally alter the nation’s age structure. For example, the average age of an immigrant in 2012 was 43 years, while the average age of a native was 37. Also, in 2011 the Total Fertility Rate (TFR) in the United States without immigrants would have been 1.9 children per woman. With immigrants, it was 2.0 — an increase of one-tenth of a point. Thus, our fertility would be higher than almost all developed countries (and many developing ones) even without any immigrants at all.

In a highly technical but seminal article in Demography in 1992, the leading academic journal in the field, economist Carl Schmertmann explored the impact of immigrants on population aging: “Constant inflows of immigrants, even at relatively young ages, do not necessarily rejuvenate low-fertility populations. In fact, immigration may even contribute to population aging.” As the Census Bureau concluded in 2000, in the long run, immigration is a “highly inefficient” means for increasing the percentage of the population that is of working age.

The newest Census Bureau population projections, released in May of last year, show the same thing. The “high-immigration” projections show that if net immigration totals 67 million by 2060, 57 percent of the U.S. population will be of working age (18 to 64). The “low-immigration” projection (33 million fewer) show 56 percent will be of working age in 2060. Roughly doubling immigration changes the working-age share by about 1 percentage point.

Equally important, Habeeb and Leven do not seem to understand that the big problem over the past decade and more has not been a shortage of working-age people, but rather that so many people who are of working age do not work. This decline in work began before the recent recession; the share of native-born, working-age Americans holding a job was lower at the economic peak in 2007 than it was at the prior peak in 2000. It deteriorated even more dramatically after 2007, of course, and has barely improved since. As a result, today there are 17 million more working-age natives who are not working than there were in 2000.

Getting several million of these people back into jobs would have a much larger impact on improving the worker-to-nonworker ratio than any likely increase in legal immigration. Immigrants arrive at all ages, and, as with any human population, some work and some do not. By definition, moving working-age natives into jobs shifts the ratio of workers to non-workers more dramatically.

Habeeb and Leven also fail to acknowledge the significant problems created by immigration. For example, almost one-third of all children born to immigrants in recent years were born to a mother who has not graduated high school, adding enormously to child poverty, with all the social challenges this brings about for the country.

One place we can see this most clearly is welfare use. Data from 2011 show that an astonishing 57 percent of immigrant households with children accessed at least one major welfare program — particularly the non-cash programs such as foods stamps and Medicaid. The rate was also high for native households with children, at 41 percent. But these natives are already here, in contrast to the future immigrants Habeeb and Leven want to admit.

Most of the immigrant (and native) households using welfare had at least one worker during the year. As I have argued before on NRO, work and non-cash welfare often go together. Habeeb and Leven are right in saying that most immigrants come to work. But unskilled immigrant workers, who have the relatively high fertility rates that Habeeb and Leven celebrate, also create large costs to taxpayers because they often cannot support their own children.

In addition to wanting more unskilled immigration, Habeeb and Leven also want more skilled immigration. Yet a number of studies have found that Science, Technology, Engineering, and Math (STEM) workers are not in short supply. In “The Myth of the Science and Engineering Shortages,” demographer Michael Teitelbaum, writing in The Atlantic, summarizes the argument from his new book, Falling Behind? Boom, Bust, and the Global Race for Scientific Talent: “No one has been able to find any evidence indicating current widespread labor market shortages or hiring difficulties in science and engineering occupations,” he observes. Teitelbaum and others have pointed out that wage growth for STEM workers has been flat for more than decade, a clear indication that such workers are not in short supply.

Finally, Habeeb and Leven bolster their case that immigrants are especially entrepreneurial by citing an empty statistic from a lobbying group’s report stating that “immigrants or their children founded 40% of today’s Fortune 500 companies.” That report counts a company as founded by an immigrant (or by a person with even one immigrant parent) even when there were multiple co-founders who were not immigrants or the children of immigrants. What’s more, the report includes companies such as DuPont, founded in 1802, and Pfizer, founded in 1849. In fact, all but a handful were founded more than half a century ago. Thus, the statistic has virtually no meaning for today’s immigration debate.

Habeeb and Leven also note that 25 percent of technology firms established since 1995 have “at least one foreign-born founder.” Again, this statistic includes companies with multiple founders, some of whom are not immigrants. It seems almost certain that the actual share of founders who are immigrants is about the same as the immigrant share of the working-age population (17 percent).

We know this because the percentage of immigrants and natives who are self-employed is the same: about 12 percent. Immigrants and natives are also very similar when we look at business income or number of employees. The bottom line is that entrepreneurship is not a distinguishing trait of immigrants as a group. 

There are benefits from immigration, of course, as well as costs. And everyone can sympathize with those who want to come to our country legally in search of a better life. But if we are to arrive at a policy that best serves the interests of our country, we cannot rely on exaggeration, wishful thinking, and cliché. Instead, we must confront the facts and formulate policy accordingly.

— Steven Camarota is director of research at the Center for Immigration Studies.

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