Transcript Immigration and Economic Growth: Putting Policy on Hold

Immigration Reform in 2010
César Chávez Institute, San Francisco State Univ.
Immigration in Times of Recession
Implications for Policy
Pia Orrenius, Ph.D.
Federal Reserve Bank of Dallas
Disclaimer: The views expressed herein are those of the presenter;
they do not necessarily reflect the views of the Federal Reserve
Bank of Dallas or the Federal Reserve System.
Road Map
Effects of recession on


Foreign-born workers
Foreign-born population
Regional differences

Foreign-born vs. U.S.-born workers
Boom and bust

Lessons for the recovery
Immigration policy: ready for recovery?
Job losses:
Taking a toll
Current job losses worst since 1945
Dec/Dec % Change
5
4
3
2
1
0
-1
-2
U.S.
-3
-4
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: Bureau of Labor Statistics
Employment declines broad based
% Change
10
5
0
-5
-10
-15
-20
-25
Nat.
Resources Const.
and Mining
Mfg.
Trade,
Financial Prof & Educ. & Leisure & Other
Info.
Transp &
Activities Business Health
Hosp.
Util.
Services Services
Note: Employment change from December 2007 to December 2009
Source: Bureau of Labor Statistics
Govt.
Total
Immigrant unemployment rate
rises above native rate
10%
9%
8%
Immigrant
7%
6%
Native
5%
4%
3%
2%
1995
1998
2001
Source: Orrenius and Zavodny 2009; BLS
2004
2007
Foreign-born unemployment rates
rise most for less-educated
Percent
Q3 2007
Q2 2009
15
10
5
0
Less Than High
School
High School
Source: Orrenius and Zavodny 2009; BLS
Some College
College
Immigration: Slowing
The foreign-born population
stagnates in 2008
2008
Millions
45
Percent
16
40
14
35
12
30
10
25
8
20
Number
6
15
10
4
5
2
0
0
1850
1870
1890
1910
Source: Census Bureau through 2008
1930
1950
1970
1990
2007
Millions
13
Unauthorized immigrant
population falling?
DHS*
Pew
12
11
10
9
8
7
2000
2001
2002
2003
2004
2005
Note: *DHS estimates not available for 2001-2004.
Source: Department of Homeland Security; Pew Hispanic Center
2006
2007
2008
New border fence 20 ft high
Source: Wayne Cornelius (2009) “Evaluating US Immigration Control Policy”
Source: Wayne Cornelius (2009) “Evaluating US Immigration Control Policy”
More border enforcement, more
port-of-entry attempts
Emigration from Mexico in
steep decline
Thousands
400
350
300
250
200
150
100
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
200620062006200620072007200720072008200820082008200920092009
Source: INEGI 2009 (Mexican National Statistical and Geographical Institute)
Apprehensions a function of labor demand
(De-trended employment; lagged apprehensions)
Thousands, SA
180
Employment
Thousands, SA
2000
160
1500
140
1000
120
500
100
0
80
-500
60
-1000
40
20
Apprehensions
0
-1500
-2000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: BLS; DHS; Authors’ own calculations
Geographic differences:
Immigrant/native
outcomes differ by state
Employment Growth by State
OK
MS
60
LA
40
WY
Foreign-Born
20
0
TX
CA
AZ
-20
ID
-40
VT
-60
-60
-50
Source: CIS, BLS
-40
-30
-20
-10
0
10
Native-Born
20
30
40
50
60
Foreign-Born Populations Decline in Florida,
California
(2008/2007 percent change)
Percent
2
1.5
1
0.5
0
-0.5
-1
-1.5
-2
U.S.
California
Source: Bureau of the Census
Florida
New York
Illinois
Texas
Boom and bust:
Lessons for the
recovery
Some lessons from the
recession so far
Immigration is pro-cyclical
Immigrants are hurt more by recessions

Helped more by expansions
Immigrants are in different
industries/occupations/states than natives

Limits labor market competition
Immigrants key to the recovery
Labor force growth

Immigrants account for one-half labor force
growth
U.S. labor force participation
rate has peaked
Percent
68
66
64
62
60
58
56
1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007
Source: BLS
Labor force participation rate:
Male, female rates falling since 2000
Percent
100
90
80
Men
70
60
Women
50
40
30
1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007
Source: BLS
Immigrants key to the recovery
Labor force growth

Immigrants account for one-half labor force growth
Efficiency gains



Complement native workers at high, low ends of skill
distribution
Fill jobs natives shun
Move to where jobs are
Productivity growth

High-skilled immigration instrumental in high-tech
innovation, R&D
Drawbacks


Winners and losers
Adverse fiscal impact of low-skilled immigration
Immigration Policy:
Ready for recovery?
Green cards go to family, not workbased immigrants
Diversity
4%
Refugees and
asylees
15%
Others
2%
Immediate
family
44%
Employment
16%
Other family
19%
Note: Data represent FY 2005-2008 averages
Source: DHS, 2008 Yearbook of Immigrant Statistics
So workers come on temporary,
not
permanent
visas
Thousands
900
800
700
600
500
400
300
200
100
0
Temporary Visas
Illegals
Family Based
Employment
Green Cards
Based Green
Cards
Note: Data represent 2004 to 2008 averages for new arrivals
Source: State Department Visa Office; Passel and Cohn 2008, Pew
Hispanic Center; DHS Yearbook of Immigration Statistics
Most skilled workers use temporary
visas
Thousands
450
Employment Based (Skilled)
H-1B and H-1B1
TN
L1
400
350
300
250
200
150
100
50
0
1992
1996
2000
2004
Note: Data from 1992 to 2008
Source: Statistical Yearbook of the INS; DHS Yearbook of Immigration Statistics;
Visa office of the State Department
2008
Almost all legal low-skilled workers
use temporary visas
Thousands
Unskilled Permanent
H-2A
H-2B
180
160
140
120
100
80
60
40
20
0
1992
1996
2000
2004
Note: Data from 1992 to 2008
Source: Statistical Yearbook of the INS; DHS Yearbook of Immigration Statistics;
visa office of the State Department
2008
Most low-skilled workers come
illegally
Unauthorized
Legal
1600
1400
1200
1000
800
600
400
200
0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Source: Jeffrey Passel and Roberto Suro, Pew Hispanic Center (2005); Passel and Cohn, Pew Hispanic Center (2008).
Absorbing temporary workers
under current system is like
swallowing this fish…
Green card queues spell a decadelong wait in many cases
Thousands
3,000
Years
14
Time
12
2,500
Visas
10
2,000
8
1,500
6
1,000
4
500
2
0
0
Employment Based
Family Sponsored
Source: State Department Visa Bulletin, March 2009; Wadhwa et al. 2007,
Ewing Marion Kaufmann Foundation ; Authors’ own estimates
Family-based green card queue for
Mexicans 60 years?
Years
Thousands
1,200
70
60
1,000
Time
50
800
40
600
Visas
30
400
20
200
0
Source: State Department Visa Bulletin, March 2009; Authors’ own estimates
10
0
Conclusion
Immigration is slowing
due to the economy
U.S. long-run growth
will still depend on
immigrants
Policy environment is
completely inadequate
to deal w/ legal, illegal
immigration
Amnesty alone is not
enough; we need to
address future flows
Worksite enforcement jumps
6000
Criminal Arrests
5000
Administrative
Arrests
4000
3000
2000
1000
0
2002
Source: DHS
2003
2004
2005
2006
2007
2008
Current policy
environment in flux
Some Bush policies on hold
 No-match program, Real ID Act, worksite raids,
higher employer fines
 E-verify: immigration status verification
Obama policies: focus on labor regulations?
 Legalization?
Local, state ordinances reg. illegal immigrants;
enforcement of federal law
Interminable queues for green cards; running out of
temporary visas