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Immigration in a Time of Recession
Steven A. Camarota
Among the report’s findings:
• Since 2000, 2.3 million new immigrant workers (legal and illegal) have arrived in the United States — almost exactly the same as the 2.2 million who arrived during the three years prior to 2000, despite dramatic change in economic conditions.
• At the state level, there seems to be no clear relationship between economic conditions and trends in immigration. Immigration levels have matched or exceeded the pace of the late 1990s in Texas, New Jersey, Virginia, Maryland, Illinois, Arizona, Washington, North Carolina, Georgia, and New York —even as all these states experienced a significant increase in unemployment.
• Nationally, about half (1.2 million) of those who arrived in each three-year time period (1997-2000 and 2000-2003) are estimated to be illegal aliens. These figures are only for those in the workforce who were captured in Census Bureau data.
• Looking only at the net increase in employment, the number of foreign-born adults (legal and illegal) holding a job has grown 1.7 million since 2000, while among natives the number working fell by 800,000.
• Although the number of foreign-born adults holding a job has increased since 2000, the number unemployed also increased, by 600,000, and unemployment rose among the foreign born from 4.9 to 7.4 percent.
• It is the very rapid growth in the foreign-born population that makes it possible for the number of immigrants holding jobs and the number unemployed to increase at the same time.
The information in this Backgrounder comes from the March Current Population Survey (CPS) collected by the Census Bureau.1 The March data, which are also called the Annual Social and Economic Supplement, include an extra-large sample of minorities and is considered one of the best sources for information on the foreign-born.2 The foreign-born are defined as persons living in the United States who were not U.S. citizens at birth.3 For the purposes of this report, "foreign born" and "immigrant" are used synonymously. Because all children born in the United States to the foreign-born are by definition natives, the sole reason for the dramatic increase in the foreign-born population is new immigration. The foreign-born population in the CPS includes perhaps eight million illegal aliens and one million persons on long-term temporary visas, mainly students and temporary workers. The CPS does not include persons in "group quarters," such as prisoners and those in nursing homes.
Economic Deterioration Not
Table 1 shows that while unemployment has risen significantly on both the national and state level, this has not had a discernable impact on the arrival of new immigrant workers from abroad. Between 1997 and 2000, 2.2 million new foreign-born adult workers arrived in the United States. Since 2000, an additional 2.3 million adult workers have entered the country.4 This lack of change is important because the economic situation has been very different in the last three years than in the pervious three years. Unemployment among adults fell in the period 1997 to 2000, but rose significantly after 2000.
But the change in the economy does not seem to be reflected in immigration numbers. This is true for most states as well, with the exceptions of Florida, Colorado, and California. In California, high unemployment does seem to have reduced the number of new arrivals from abroad, although immigration levels to that state remain very substantial even during the current recession, with 367,000 new arrivals from abroad between 2000 and 2003. In every other high-immigration state, however, new legal and illegal immigrants kept coming in numbers that matched or in some cases exceeded the rates during the three years prior to 2000.
Overall, Table 1 shows that immigration is not very sensitive to changes in demand for labor. For example, Texas saw a large increase in new immigration, but the rise in the unemployment rate among adults in that state is not that different from California’s. Of the larger states, some of the biggest increases in unemployment were in North Carolina, New Jersey, and Illinois. But in each of these states new immigration matched the level of the late 1990s. On the other hand, Florida’s recession is not particularly deep, yet immigration to that state does seem to have fallen off in the last three years.
Immigration is of course a very complex process driven by a host of factors, including a desire to be with relatives or a wish to enjoy greater political or personal freedom. Most important, the standard of living remains much higher in this country than in most sending countries, even if jobs are scarce. Thus, the idea that record immigration in the 1990s reflected economic conditions in the United States is a gross oversimplification and perhaps not even very helpful in understanding immigration. To be sure, the higher wages and greater material prosperity in the United States play a huge role in encouraging people to come, but our standard of living is much higher regardless of the business cycle. Thus, demand for workers in this country is only one of many factors that drive immigration. Evidence from the current recession suggests it may not even be one of the most important factors.
Table 2 examines in detail foreign-born and native workers in the United States using the March 2000 and 2003 CPS. While Table 1 reported the number of new adult workers from abroad, Table 2 reports the net change in the number of adults in each category. Table 2 shows that unemployment has risen significantly for both immigrants and natives in the last three years. The number of employed natives fell by almost 800,000 and their unemployment rate rose from 4 to 6 percent between March 2000 and March 2003. In contrast, there has been a net increase of 1.7 million foreign workers over this same time period. This suggests that some of the employment losses suffered by natives may be at least partly explained by immigration.
It must be remembered that the figures in Tables 1 and 2 are for those working and unemployed and do not include those who may want to work but have given up looking for a job. Table 2 shows that there were a total of 39.4 million adults ages 18 to 64 in 2003 who were not working nor looking for work, compared to about 36 million in 2001. Among native-born adults, the number not in the workforce increased 2.7 million, or 9 percent. Among the foreign born, the number not in the workforce increased by 800,000 or 14 percent over the same period. Of course, many adults are not in the workforce by choice. For example, many are caring for young children or are full-time students. But this was true in both 2000 and 2003, thus some of the increase in non-work in those years is almost certainly related to economic conditions and perhaps a continued high level of immigration. Like the increase in unemployment among the foreign-born, the rise in non-work is a strong indication that employment prospects have deteriorated for immigrants. onomy.5 This is no longer the case; perhaps because the difference between the standard of living in the United States and that of most sending countries is much larger today than in the past. In fact, administrative data from the immigration service on the arrival of new legal immigrants show that although there have been a number of recessions since the end of World War II, these economic downturns had no discernable impact on the flow of new legal immigrants. In the post-war period, immigration is no longer the self-regulating process it once was. Given the enormous benefits, economic and non-economic, that accrue to those who come to this country, it should not be too surprising that the availability of jobs seems to matter so little. This means that reducing immigration requires a change in policy.
Table 2 shows that about a third (561,000) of the 1.7 million net increase in the number of foreign-born workers was due to an increase in the number of foreign-born workers without a high school degree. The number of native high school dropouts holding a job declined by 827,000. Some of this decline is explained by an increase in unemployment among native dropouts of 238,000, raising the unemployment rate for native dropouts from 9.9 to 12.8 percent. The decline in the number of native dropouts working not only reflects an increase in unemployment, however. It also seems to be related to the retirement of older natives with few years of schooling.
The number of dropouts not working between the ages of 18 and 64 went down slightly between 2000 and 2003, indicating that there was not an increase in non-work among that group. On the other hand, the ratio of dropouts not in the workforce to those who are is still about twice that of those with a college education. The rise in unemployment among native-born dropouts and their persistently high rate of non-work may be a matter of some concern because they already had the highest rates of unemployment and non-work as well as the lowest wages in 2000. By significantly increasing the supply of unskilled workers during the recession, immigration may be making it more difficult for these workers to improve their situation. Had there been much less immigration, the labor market for unskilled workers would have been much tighter due to the retirement of older dropouts. Immigration prevented this process from occurring.
The number of more educated foreign-born workers also increased. Between 2000 and 2003, the number of immigrant workers with only a high school degree rose by about 250,000 between 2000 and 2003. At the same time, the number of unemployed natives with only a high school education increased by more than 900,000 to 2.8 million. The number not working also increased by nearly 650,000. Turning to those with more than a high school education, Table 2 shows that the number of foreign-born workers holding a job increased 863,000, but the number unemployed also increased by almost 300,000. Among natives with more than a high school education, the number working increased, but unemployment also increased. The increase in the numbers of these more-educated workers both holding jobs and unemployed reflects the long-standing trend of more-skilled workers representing a growing share of the workforce. What Table 2 does make clear is that even during the current economic downturn immigration continues to add to the net supply of workers throughout the labor force, with the biggest impact on the supply of unskilled workers.
Total Foreign Born
Figure 1 reports the overall size of the foreign-born population in the United States between 2000 and 2003. The figures are for all foreign-born persons, not just those in the workforce. The figure shows that the population has grown by one million since 2002 and by 3.5 million since 2000.6 The 33.5 million foreign-born persons in March of 2003 is the largest number ever recorded in American history. The growth in the foreign-born population in the last three years occurred at the same rate as it did in the 1990s, when on average the foreign born population grew by 1.1 million a year.
A Slowdown in 2001.
There is some evidence that the attacks of September 11th may have briefly slowed immigration. Figure 1 shows that the foreign-born population grew by 700,000 between 2001 and 2002, whereas it grew by 1.8 million between 2000 and 2001 and by one million between 2002 and 2003. The slower rate of growth between 2001 and 2002 may represent some reduction in the overall level of immigration between March of 2001 and March of 2002. However, simply looking at the total foreign-born population in Figure 1 does not reveal whether the slower growth rate for 2001 to 2002 was due to a reduction in new arrivals or an increase in return migration. If there was a slowing in new immigration between 2001 and 2002, the 2003 data indicate that legal and illegal immigration have resumed the pace of the 1990s, and that the foreign- born population continues to grow by one million a year. Of course, it must be remembered that any surveys of this kind are subject to sampling variability, and that year-to-year changes can be volatile. What is clear from the data is that in the first three years of this decade the foreign-born population has grown at a rate very similar to that of the 1990s.
In addition to asking whether a person is foreign-born, the CPS asks individuals the date when they came to the United States. In 2002, there were 4.53 million persons who said they entered the United States between 2000 and 2003 for an annual rate of between 1.4 to 1.5 million, even with the 2001-2002 slowdown. The arrival of more than 1.4 million new legal and illegal immigrants each year is offset by deaths and return migration causing annual net growth of one million in the total foreign born. It should be pointed out that arrival information for a single year is not available in the public use data files used for this study because the Census Bureau groups several years together in the public files in order to protect the anonymity of survey participants. Thus, it is not possible to say for certain that more than 1.4 million new people arrived from abroad between March 2002 and March 2003. However, deaths and out-migration are thought to total about 500,000 each year. Thus, for the foreign born to still grow by one million, more than 1.4 million new individuals must have arrived between March 2002 and 2003.7 The number of new arrivals in the last year is about the same number as in the late 1990s. The March 2000 CPS showed that about 1.45 million new individuals were arriving each year by the end of the 1990s.
As a share of the total population, the 33.5 million foreign-born individuals accounted for 11.7 percent of the nation’s total population in 2003, compared to 10.8 percent found in March 2000 CPS. The foreign-born now account for almost one in eight residents, the highest percentage in over 80 years. If current trends continue, within a decade the foreign-born share of the population will match the all-time high of 14.8 percent reached in 1890.
In terms of the impact on the United States, both the percentage of the population that is foreign-born and the number itself are clearly important. The ability to assimilate and incorporate immigrants is partly dependent on the relative sizes of the native and foreign-born populations. On the other hand, absolute numbers also clearly matter; a large number of immigrants could create the critical mass necessary to foster linguistic and cultural isolation.
While the CPS does not ask
about legal status, some insight can be gained on unauthorized flows by looking
at year of entry and place of birth in the survey. Based on estimates prepared
by the INS, we estimate that 46 percent of those who responded to the 2000 and
2003 CPS and indicated that they arrived in the United States in the three years
prior to the survey are illegal aliens.8
This means that 1.98 million of the 4.3 million people who arrived 1997 to 2000
are illegals and 2.09 million of the 4.54 million who arrived 2000 to 2003 are
Turning to only adults (18 and over) in the workforce, we assume a somewhat higher share are illegals than is the case for illegals overall because relatively few illegals come as children or as retirees. For the 1997-2000 cohort, an estimated 53 percent of new arrivals in the workforce are illegals and 50 percent of those in the 2000-2003 cohort are illegals. We assume a slightly smaller share are illegals in the 2000 to 2003 period because some of the provisions of NAFTA allowing in more people from Mexico on a legal temporary basis have begun to take effect. This means that about 1.2 million new adult illegal workers arrived in both the first three years of the 1990s and the first three years of this decade. Again it must be stressed that these figures do not include all illegals in the country, but instead only those in the CPS who indicated they were in the workforce.
Table 3 shows the year of arrival and region of birth for the foreign-born, with Canada and Mexico treated separately. The table shows that the majority of recent arrivals come from the western hemisphere, which accounted for 58 percent of all those who have arrived since 2000. Mexico by itself comprised a third of these most recent arrivals in 2003. The 1.5 million people who came from Mexico in the last three years strongly suggests that illegal immigration continues at very high levels from that country.
In its report published in January of this year, the Immigration and Naturalization Service estimated that almost 70 percent of the total illegal-alien population was Mexican and that about two-thirds of all illegals who arrived in the late 1990s are from Mexico. It is a well-established fact that vast majority of recent arrivals from Mexico in Census Bureau data, such as the CPS, are illegal aliens.9 In contrast, legal Mexican immigrants are generally persons who have lived in the United States for some time as illegal aliens before getting their green card. Thus, for the most part, legal Mexicans report a year of arrival that is further back in time, reflecting their time in the United States as illegal aliens before they got legal status. It is very likely that at least 90 percent of the 1.5 million people from Mexico who arrived since 2000 are illegal aliens. This would mean that illegals from that country continue to account for nearly two-thirds of all new illegals.
It is possible that illegal
immigration from Mexico has slowed since 2000, but the grouping of all post-2000
arrivals in public use data obscures this fact. However, data from the 2002 CPS
suggest that 500,000 of the 1.5 million post-2000 arrivals from Mexico came in
just the last year.10
It must be remembered that only about 200,000 people a year are granted legal
permanent residence from Mexico. Thus, even if all these new legal immigrants
were captured by the Census Bureau and all of these individuals reported a more
recent date of arrival, which is very unlikely, the 1.5 million post-2000
Mexicans in the CPS would still mean that illegal immigration from that country
continues at very high levels. Since there has been no increase in efforts to
control illegal immigration, it should come as no surprise that illegal
immigration continues much as before. It is interesting to note that even the
recession did not slow the pace of illegal immigration.
Table 4 shows the 20 states
with the largest foreign-born populations in 2003 and their year of arrival.
(Note: Unlike Table 1, the numbers in Table 4 are for all of the foreign-born,
not just those in the workforce.) The table ranks the states based on the number
of post-2000 arrivals. The table shows that California received the most new
arrivals, followed by Texas, Florida, New York, Illinois, New Jersey, Virginia,
Maryland, Arizona, North Carolina, and Georgia. It also shows that a very large
share of the foreign-born are recent arrivals in many states. For North Carolina
and Kansas, one in four among the foreign-born came to the United States in the
last three years. In Texas, Virginia, Georgia, Colorado, Minnesota, and
Tennessee, one in five is a very recent arrival. Nationally, about one in eight
foreign-born individuals arrived in the last three years. The table also
provides evidence that the foreign-born continue to settle outside traditional
states of heavy immigrant settlement. This is especially true for California.
Although California accounts for 27 percent of the total foreign-born
population, 18 percent of those who arrived in the last three years went to that
state. Of course, seven states with the largest foreign-born population
accounted for nearly two-thirds of all new arrivals. It should also be pointed
out that eight out of 10 foreign-born individuals still live in just 13 states.
Dr. Steven A. Camarota is the Director of Research at the
Center for Immigration Studies.
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