As part of its campaign to convince a skeptical American public about the benefits of amnesty and mass immigration, two Administration economic advisors published a blog on the White House website entitled, “Ten Ways Immigrants Help Build and Strengthen Our Economy.” The blog by Jason Furman and Danielle Gray is a case-book example of how to carefully select facts (and ignore those that are inconvenient) and cite questionable sources to support a predetermined conclusion.
Below are the “facts” and arguments offered by Furman and Gray, followed by some of the information they chose to leave out.
1. Immigrants start businesses. According to the Small Business Administration, immigrants are 30 percent more likely to start a business in the United States than non-immigrants, and 18 percent of all small business owners in the United States are immigrants.
First of all, Americans also start businesses. Second, many of these businesses are just mom and pop operations that do not increase employment in the community. Many immigrant-owned businesses cater to the immigrant community around them and would be unnecessary and unviable if not for large-scale immigration. In addition, these businesses tend to spring up in areas where immigration has changed the make-up of the community resulting in existing businesses relocating or closing.
2. Immigrant-owned businesses create jobs for American workers. According to the Fiscal Policy Institute, small businesses owned by immigrants employed an estimated 4.7 million people in 2007, and according to the latest estimates, these small businesses generated more than $776 billion annually.
Besides the fact that a large portion of the 4.7 million people who are employed by immigrant-owned businesses are family members or fellow immigrants, the number of people such businesses employ does not even offset the number of jobs lost by Americans to illegal immigrants (about 8 million). The $776 billion generated by immigrant-owned businesses amounts to just 5 percent of current GDP. Moreover, much of that $776 billion would have been generated by native-owned businesses if the products, and particularly the services, provided were demanded by consumers.
3. Immigrants are also more likely to create their own jobs. According the U.S. Department of Labor, 7.5 percent of the foreign born are self-employed compared to 6.6 percent among the native-born.
Define “jobs” and define “self-employed.” This can often mean working sporadically, or in the underground economy. Such workers also tend to lack basic benefits like health insurance making them far more likely to depend on public health care.
4. Immigrants develop cutting-edge technologies and companies. According to the National Venture Capital Association, immigrants have started 25 percent of public U.S. companies that were backed by venture capital investors. This list includes Google, eBay, Yahoo!, Sun Microsystems, and Intel.
The fact that a small number of immigrants have been enormously beneficial to the U.S. economy does not mean that our immigration system as a whole benefits the country. We do not have an immigration process that selects people based on their likelihood to start the next Google or the next eBay. In fact, about one-third of all immigrants lack a high school education. Also, the 25 percent statistic includes ventures in which an immigrant may have been among a group of people who founded a company.
5. Immigrants are our engineers, scientists, and innovators. According to the Census Bureau, despite making up only 16 percent of the resident population holding a bachelor’s degree or higher, immigrants represent 33 percent of engineers, 27 percent of mathematicians, statisticians, and computer scientist, and 24 percent of physical scientists. Additionally, according to the Partnership for a New American Economy, in 2011, foreign-born inventors were credited with contributing to more than 75 percent of patents issued to the top 10 patent-producing universities.
Immigrants are increasingly becoming our engineers and scientists because natives are being driven out of those fields. In recent months several studies (conducted by reputable researchers who have no defined position in the immigration debate) have concluded that there is a surplus of trained American STEM workers, but that many of them are openly discriminated against or have become discouraged and mover to other fields.
6. Immigration boosts earnings for American workers. Increased immigration to the United States has increased the earnings of Americans with more than a high school degree. Between 1990 and 2004, increased immigration was correlated with increasing earnings of Americans by 0.7 percent and is expected to contribute to an increase of 1.8 percent over the long-term, according to a study by the University of California at Davis.
Most of the meager increase in earnings associated with immigration for “Americans with more than a high school degree” has been accrued by a very small percentage of the population – primarily the direct employers of the immigrant workers, who are often prepared to work more cheaply than American workers. Among American workers with less than a high school diploma – more than 20 million adults – the effects have been devastating, driving this cohort even deeper into poverty. Also not accounted for are the costs to American taxpayers to provide services and public assistance to immigrant-headed households, which are 50 percent more likely to rely on such services than native-headed households.
7. Immigrants boost demand for local consumer goods. The Immigration Policy Center estimates that the purchasing power of Latinos and Asians, many of whom are immigrants, alone will reach $1.5 trillion and $775 billion, respectively, by 2015.
Leaving aside the fact that the Immigration Policy Center is an advocacy organization dedicated to promoting large-scale immigration, the numbers are not that impressive. Latinos now make up about 16 percent of the U.S. population, but their $1.5 trillion purchasing power represents only about 10 percent of the total purchasing power of people in the U.S. In addition, some $50 billion a year in remittances sent by immigrant workers to relatives in their home countries flows out of the U.S. economy each year. If the same wages had been earned by native workers, most of that money would likely have remained in the U.S. economy spurring job growth, tax revenues and other benefits.
8. Immigration reform legislation like the DREAM Act reduces the deficit. According to the nonpartisan Congressional Budget Office, under the 2010 House-passed version of the DREAM Act, the federal deficit would be reduced by $2.2 billion over ten years because of increased tax revenues.
When a number is really small, the best thing to do is to multiply it by ten and project it over the course of a decade. $2.2 billion over ten years works out to a $220 million reduction in the federal deficit. The federal deficit for the current fiscal year is projected to be $1.17 trillion. Thus the DREAM Act “bonanza” would close the gap by about 1/88th of 1 percent. Of course the CBO estimate does not look at how the budget deficit might be affected if laws against illegal immigration were enforced and many jobs now held by illegal aliens were filled by legal U.S. workers.
9. Comprehensive immigration reform would create jobs. Comprehensive immigration reform could support and create up to 900,000 new jobs within three years of reform from the increase in consumer spending, according to the Center for American Progress.
The Center for American Progress is a highly partisan and avowed advocacy group promoting amnesty for illegal aliens. For one thing, the number of illegal aliens in the U.S. is conservatively estimated to be about 11 million, about 12 times the number of jobs that CAP claims would be created by legalizing them. Moreover, even if CAP’s projections are to be believed, the raw figure says nothing about the quality of the jobs that they claim would be created. Given the poor education and job skills of most illegal aliens, these would likely be low-paying jobs that would require American taxpayers to heavily subsidize the workers and their dependents
10. Comprehensive immigration reform would increase America’s GDP. The nonpartisan Congressional Budget Office found that even under low investment assumptions, comprehensive immigration reform would increase GDP by between 0.8 percent and 1.3 percent from 2012 to 2016.
Aside from the fact that the percentage boost to GDP, over a four-year period would be insignificant, GDP by itself is a very poor indicator of the health of an economy. The raw GDP numbers tell us nothing about how wealth and income are distributed across the population.