EconSouth (First Quarter 2000)
The debate over immigration has been strong and quite heated recently. During the past 20 years, the number of immigrants has risen steadily in the nation and the Southeast. Whether or not immigrants make a positive contribution to the economy is still questioned. Analysis of statistics on immigrants, though, seems to show that in the Southeast immigrants are generally well-educated, self-supporting contributors to the region’s economy, very similar to the native population.
n a nation of immigrants that has long prided itself on being a melting pot, the topic of immigration has again recently sparked a heated national debate. In the 2000 presidential race, a Reform Party candidate has made immigration reform a focus of his campaign, arguing for reducing the number of legal immigrants allowed to enter the United States each year and pledging to halt illegal immigration. The debate is even reaching areas of the country that have small immigrant populations. Population-Environment Balance, a Washington-based political action committee, ran ads before the Iowa presidential caucuses calling for drastic reductions in current immigration totals. Economists who study immigration contradict one another, and news coverage feeds the fire.
These debates about the value of immigration to the U.S. economy come at a time when the number of foreign-born persons has reached the highest levels in the post–World War II period. According to the U.S. Census Bureau, as of July 1998, foreign-born residents accounted for approximately 9 percent of the U.S. population, compared with around 8 percent in 1990. The number of foreign-born residents grew from approximately 20 million in 1990 to about 25 million in 1998. Census data show that the foreign-born population grew 27 percent between 1990 and 1998 while the native population grew only 7 percent.
Research fuels debate
The national debate on immigration and the economy is being fueled by conflicting conclusions by economic researchers. Some have concluded that a switch from a national origin system to a relative-based system changed the characteristics of immigrants. One of the opponents of current immigration law is George Borjas, the Pforzheimer Professor of Public Policy at the John F. Kennedy School of Government at Harvard University and an immigrant from Cuba. His studies focus on immigrants’ contributions to the U.S. economy. In numerous articles and books, Borjas concludes that since the change in immigration law in 1965 from a national-origins quota system to a system based on family ties, immigrants entering the United States are not as able to contribute to the country’s economic welfare and, in fact, may be a drain on the economy.
Barry R. Chiswick, research professor and head of the economics department of the University of Illinois at Chicago, draws similar conclusions. He argues that visas issued largely on the basis of kinship with a U.S. citizen or resident alien — as opposed to a visa system that stresses the immigrant’s likely contribution to the U.S. economy — result in immigration of less productive workers, who then compete for the same jobs as low-skilled or socially disadvantaged natives.
Other researchers argue that immigrants have had a positive impact on the U.S. economy. Frank D. Bean, former director of immigration research for the Urban Institute in Washington, D.C., concluded in a recent study that immigration even under current rules has a positive effect on the economy. And, in a 1995 study for the Cato Institute, the late Julian Simon, former professor of business administration at the University of Maryland, found that “immigrants do not cause native unemployment, even among low-paid or minority groups.” In fact, Simon found that immigrants help create jobs by spending their wages.
Others, such as Federal Reserve Chairman Alan Greenspan, believe that immigration has helped meet the labor demands of the U.S. economy during the current record expansion as the pool of available workers has grown relatively smaller. In a recent speech, Greenspan noted that “extra demand can only be met with increased imports or with new domestic output produced by employing additional workers either from drawing down the pool of those seeking work, or from increasing net immigration.”
The work of these and other prominent scholars and authorities is often quoted in articles that seek to sway public opinion on the subject of immigration reform. Yet the conclusions of these experts may not be as pertinent to the Southeast, which has some important differences from the national picture of immigration.
Immigration, Southern style
In comparison to the nation as a whole, the Southeast has a slightly smaller share of foreign-born individuals. Data from the Census Bureau’s March 1998 Current Population Survey indicate that the foreign-born share of the nation’s population is about 10 percent, while the foreign-born population represents only 7 percent of the Southeast’s population. There is, of course, a population of illegal immigrants in the nation and the Southeast, but the size of these groups and their characteristics are not known. Arguments could be made that illegal immigration is a drain or a benefit to the economy. Absent any data, however, it is difficult to determine the impact of illegal immigration, and this article does not address that topic.
Within the Southeast, Florida has the largest foreign-born population share, at about 16 percent, followed by Georgia and Louisiana, 3 percent; Alabama and Tennessee, 2 percent; and Mississippi, 1 percent (see Table 1).
Not only is the foreign-born population smaller in the Southeast than in the West and Northeast, but the population also immigrated from a different mix of countries. In the Southeast, approximately 23 percent of the foreign-born population is from Cuba, whereas nationally only 3 percent of the foreign-born population is from that island nation. South Florida has the largest concentration of Cuban immigrants in the Southeast. Nationally, however, the largest percentage (27 percent) of the foreign-born population is from Mexico. In the Southeast, only 6 percent of the foreign-born population is from Mexico. In fact, the Southeast has a higher percentage of immigrants from Haiti, 8 percent, than from Mexico (see Table 2).
Critics have also claimed that the foreign-born population is heavily dependent on public assistance. The numbers in the Southeast counter this view. Overall, in the Southeast the fraction of households headed by an immigrant that receive public assistance is slightly lower than the number of households headed by a native that receive public assistance — 18 percent compared with 19 percent, respectively. Nationwide the numbers are quite different, with 24 percent of the households headed by immigrants receiving some type of benefits and only 16 percent of the households headed by natives receiving public assistance (see the chart).
Percentage of Immigrant and Native Households in the
bIncludes rent subsidies and public housing.
Foreign-born workers in the Southeast
Many perceive that the majority of foreign-born workers are employed in low-wage, low-skilled jobs. Again, the data for the Southeast do not support this perception. According to Census Bureau data, the highest proportions of foreign-born workers in the Southeast are executives, administrators and managers, at 9 percent; clerical and other administrative support workers, 7.4 percent; and sales workers, retail and personal services, 6.6 percent (see Table 3). These job categories are the same as the top three for native workers in the Southeast although the region’s foreign-born workers have a slightly smaller percentage of workers in two of these categories.
Though the top occupations for the Southeast’s foreign-born workers are professional, the region has many foreign-born workers employed in occupations that do not require an advanced degree or specialized knowledge.
Like the rest of the country, the hotel industry in the Southeast is experiencing a shortage of workers. Some hotels have taken an innovative approach to filling employment vacancies. In recent years, the Opryland Hotel in Nashville and other lodging enterprises in the region have brought in workers under specialized temporary worker visas.
According to Wynn Merryman, manager of staffing services for Opryland Hotel and Attractions, during the 1980s Opryland began working with specialized agencies and other governments to place immigrants in temporary jobs in the United States. Some of these immigrants have come from Vietnam, Jamaica and Kosovo. These workers, who fill housekeeping, dishwashing, culinary and banquet set-up positions, often take steps to extend their visas while working with Opryland. Merryman said that the hotel also has a training program for hospitality students and has had international students from Switzerland, Ireland and other countries obtain temporary worker visas for this program.
In some industries, foreign-born workers are filling factory jobs. Carpet mills in Dalton, Ga., and poultry processing plants in Gainesville, Ga., have hired many foreign-born workers. And, throughout the region, immigrant workers harvest labor-intensive crops.
Construction has also seen an influx of immigrant workers in the Southeast. John Wieland, chief executive officer and chairman of John Wieland Homes and Neighborhoods, one of the Southeast’s largest builders, says that without immigrant workers “you would not have a construction industry in the Southeast.” He noted that his company has a number of Hispanic and Asian workers that are directly on the payroll. In fact, John Wieland Homes and Neighborhoods has translators for the company orientation, prints how-to manuals in Spanish, and provides a Spanish course in construction-specific terms to its field managers. Wieland points out that, in addition to immigrants working for domestic contractors, there are also many immigrants in business for themselves as subcontractors.
Areas that have higher concentrations of foreign-born workers often find immigrants opening businesses that cater to the immigrant and native populations. In many sections of Atlanta, Miami and other metropolitan areas in the region, for instance, specialty restaurants, food markets, and clothing stores that appeal to the tastes of the foreign-born population have proliferated.
One of the arguments given by supporters of immigration is that immigrants have a high rate of self-employment. Recent research by the Center for Immigration Studies found that immigrants from different parts of the world have very different rates of self-employment. For example, 6 percent of the foreign-born population from Mexico are self-employed compared to 15 percent of the immigrants from Cuba and 33 percent of the immigrants from Korea. The study also found that for the first time since 1960, the fraction of workers who are self-employed is slightly higher in the native population than in the foreign-born population. In the Southeast, however, data from the Census Bureau show that a slightly higher percentage of immigrant workers aged 25–64 are self-employed — 12 percent of foreign-born nonagricultural workers compared with 11 percent of native nonagricultural workers.
In his book The Other Americans: How Immigrants Renew Our Country, Our Economy, and Our Values, Joel Millman provides examples of how different ethnic groups tend to choose different types of businesses. Many hotels are now owned by immigrants from India, and many small farms in the Southwest and Northeast are owned by Asian and Hispanic immigrants. In the Southeast, aside from the hotel industry, many of the self-employed immigrants are centered near immigrant populations.
Immigration helpful to Southeast
While immigration on a national level is a topic of heated debate and controversy, legal immigration in the Southeast appears to have a positive impact on the economy.
Although the region does have some immigrants who receive public assistance, the percentage of immigrant households receiving public assistance is less than the percentage of native households receiving public assistance. Immigrants in the region are also, on average, at or above comparable education levels with the native population and fill a number of highly skilled jobs. Lower-skilled immigrants are helping fill employment vacancies in some industries that are crucial to the region’s economy, particularly during the current economic expansion. Through business ownership, immigrants are also helping provide an important link in the region’s economy and fulfilling their version of the American dream.
All told, many negative generalizations about immigration appear unfounded. Legal immigrants provide additional skills and workers and, as consumers, greater purchasing power to the U.S. economy, particularly in the Southeast.
Editor’s note: Throughout this issue Southeast refers to the six states that, in whole or in part, make up the Sixth Federal Reserve District: Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. The uncited statistics used in this article are from the March 1998 Current Population Survey.