The Truth About Illegal Immigrants

No issue jerks the knees of Californians -- indeed, all Americans -- as much as illegal immigration and its effect on the state and the nation. One reason that it tends to elicit pre-programmed responses across the political spectrum is that the information available on the subject has traditionally been of two kinds: bad and nonexistent.

The slack is normally taken up by cant and supposition: Illegal immigrants take jobs from native workers, drive down or hold down wages, impose a uniquely heavy cost on society and so on. For the most part, these are perceptions masquerading as conclusions, which is not to say that they should be lightly dismissed. They drive the politics of immigration, after all, and thus influence the prospects of immigration reform.

So it’s encouraging that a panel of state economic officials and other leaders is about to receive a dose of actual facts about illegal immigration and its effect on the state. The instrument is a report prepared by the Center for the Continuing Study of the California Economy, an independent think tank in Palo Alto, which will be presented today in Sacramento to the state’s Economic Strategy Panel. This 15-member group is appointed by the governor and legislative leaders and chaired by Victoria L. Bradshaw, secretary of the state labor and workforce development agency.

What’s important about the report is that by deflating numerous myths about illegal immigration it underscores the genuine issues and points us toward the best policies to address them. Chief among its findings is this: Immigration, legal or illegal, while imposing net fiscal costs on this state, produces a net economic benefit for the country.

The imbalance between national economic gains and local fiscal costs reminds us that the federal government’s evasion of its responsibility to help states and municipalities with the staggering costs of hosting illegal immigrants -- especially in the education, healthcare and criminal justice systems -- is inexcusable. There has always been an abstract recognition of this responsibility in Washington, but until federal lawmakers understand that the nation genuinely benefits from immigrant labor, it will always remain abstract. (In other words, underfunded.)

The center’s report is not a brief for illegal immigration. “As an economist, I have nothing to say about the argument that ‘illegal is illegal,’ ” Steven Levy, the center’s director, told me this week. On the other hand, he says, the report “repudiates that there are wide pockets of poverty and imbalance in the California economy due to immigrants. They’re fitting in.”

The study focuses largely on the California economy since 1990. The date is significant because it marks the beginning of the illegal immigration flood tide; just over half the state’s legal immigrants arrived before 1990, but about 86% of the 2.4 million illegal immigrants living in the state today have arrived since then. (They’re currently arriving at a net rate of 75,000 to 100,000 a year, mostly from Mexico and other Latin American countries.)

The researchers looked at several economic trends in that period. They found that California unemployment, which was as much as 3% higher than the national rate during and after the recession of the early 1990s, largely closed the gap after 1994. By this year, it was nearly identical to its rate in 1990.

Average wage levels in the state, in contrast with those in the nation, have soared. In 1990, the report says, the average wage was 10.9% above the national average. By 2004 it had moved to 13.4% above the average. Meanwhile, job growth has remained strong -- exceeding the national rate from 1994 to 2000 and pacing it since then.

Clearly, California has remained an impressive economic engine throughout the period of heavy illegal immigration. It’s worth noting that the period includes two major economic setbacks -- the aerospace-driven recession of the early 1990s in Southern California and the 2000 tech bust in the Bay Area -- without which California might well have had the rest of the country eating its economic dust. Of course, neither bust can be remotely traceable to immigration.

What about whether illegal immigrants are displacing native-born Americans in the job force? The arriving workers are concentrated in a few low-wage sectors -- although they comprise 4.3% of the U.S. workforce, in 2004 they held 19% of jobs in farming, 17% in cleaning and 11% to 12% in food preparation and construction.

But there’s no evidence that they’ve increased native unemployment or significantly suppressed wages in those trades. A 1997 study by the National Academy of Sciences cited by the new report found only a “weak relationship” between the number of immigrants and native wages. A report this year by the president’s Council of Economic Advisors placed the effect at less than 1% in wages for every 10% increase in the number of immigrant workers. In any event, California’s minimum wage ($6.75 an hour) sets a floor on how much an unskilled worker can be paid.

The virtue of the center’s analysis is that, unlike most other surveys, it’s not a snapshot of immigration’s near-term effect. It shows that, on average, immigrants rise on the socioeconomic scale the longer they’re in the country, as do subsequent generations. The more successful they are, of course, the better it is for the general economy.

Implicitly, this calls for a realistic immigration policy -- not necessarily a full amnesty for those who came here illegally, but some recognition that their presence sets the groundwork for a fuller contribution to the economy, such as a guest worker program with the promise of a green card under certain circumstances -- very like the Bush administration’s proposed temporary worker program, but perhaps more generous.

In the long run, won’t that be more profitable than trying to corral them all and ship them home, only to wonder once they’re gone how to fill the jobs they were doing while they were here?

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Golden State appears every Monday and Thursday. You can reach Michael Hiltzik at golden.state@latimes.com and view his weblog at latimes.com/goldenstateblog.