We have two immigration policies. One uses quotas to decide who is allowed to enter the country legally. It benefits the economy and taxpayers. It brings in some of the most talented people in the world. It helps families reunite, enables people to escape from political oppression and allows U.S. citizens to marry the person of their choice. Although we should tinker with and perfect its rules, this immigration policy is under control.
The policy dealing with illegal immigration is not under control. A lot of money and manpower are devoted to guarding our southern border, and these resources have an effect. Just think what would happen if there were no border police. But migrants keep coming because they think, mostly correctly, that their lives will be much better here than back home. And judging from a drive across Los Angeles on any given day, we take advantage of and accept this view.
Undocumented and legal immigrants could not be more different. Legal migrants are often more skilled than the typical American and divide roughly equally among Asians, Latinos and Europeans. Undocumented migrants are mostly low-skilled, earn low wages and are heavily Latino.
But for both groups, coming to the United States is akin to winning the lottery. Legal migrants, on average, earn $16,000 more a year in the U.S. than in their home countries — a $300,000 bonus in lifetime earnings. Those with employment visas do even better. But if you come to the U.S. for love, it had better work out: The wage gains for migrants who marry Americans are small. The undocumented also earn much more here than they would back home, which is why they risk so much to get and stay here.
All this benefits the U.S. economy — to the tune of about $10 billion a year. In part, this is because immigrants, legal and illegal, keep wages lower than they otherwise would be. Economics forces you to be honest. If immigration doesn't depress wages, prices can't fall, and there is no economic benefit to that.
Immigrants also benefit federal taxpayers over the long term. They are young, they pay taxes, and the most expensive federal programs are for the elderly. Immigrants will not come close to solving our impending budget shortfalls caused by an aging population, but they help on the margin.
Only in California are the taxpayer effects of immigration a net liability, and this is mostly because of the public cost of educating immigrant children. According to a 1997 National Academy of Science study, state taxpayers paid $1,178 more in taxes than they received in benefits linked to immigration. These California numbers are surely higher today.
When Latin American countries raise their living standards closer to ours, illegal immigration will decline. But that's decades off. Meanwhile, reform starts with amnesty. Many of the undocumented in the U.S. are long-settled and are our friends and neighbors. They should be allowed to come out from the shadows. We are not the kind of country that would insist they leave — a nightmare scenario.
Reform should also better reflect economic and past immigration realities by allowing more migrants from countries south of us to enter legally. But, more important, it must include a commitment to enforce immigration laws not just on the borders but also in the cities and towns where illegal immigrants work and live. Opponents of immigration correctly argue that past reforms, such as the Immigration Reform and Control Act of 1986, did little to stem the tide of illegal immigrants. If new reforms lack the bite of stronger law enforcement in the country's interior, we'll repeat that experience. The new bargain must be: After the next amnesty, anyone caught here illegally should be immediately sent home.
Some have contended that because of language, a common border or unwillingness to assimilate, U.S.-born children and grandchildren of Latino immigrants will not enjoy the spectacular generational successes achieved earlier by European migrants. That's simply not true. The education advances of Latino immigrants across generations are larger than they were for Europeans.
Getting history right doesn't justify complacency. The successes of previous immigrant generations happened in large part because schools worked for both immigrant children and their native-born classmates. If schools don't similarly work for today's immigrants — and there are ample reasons for concern — the success of future generations will be imperiled.
The strong emotions swirling around immigration are more cultural than economic. In the New York City neighborhoods of my youth, it was a major family crisis when an Irish Catholic boy invited his Italian Catholic girlfriend home for dinner. Mothers on both sides feverishly fingered their rosary beads. When I tell this story to my always-L.A. daughters, they stare at me in disbelief. But the story is true and says a lot about our future.
Despite similar concerns their parents might have today, many Latino and Asian children and grandchildren of immigrants will leave home, fall in love and marry across ethnic and racial lines. In so doing, they will create another new American blend in which the sharp ethnic boundaries cherished by their parents will disappear. We can embrace or fear this future, but past immigration alone ensures that it is our demographic future.
James P. Smith holds the chair in labor markets and demographic studies at Rand Corp. He led a panel for the National Academy of Sciences on the economic and tax effects of immigration.
This commentary originally appeared in Los Angeles Times on May 1, 2005. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.