Immigration fuels economy

The 2000 U.S. Census found 6 million more people in the United States than the Census Bureau had previously thought lived here. The most likely causes of this error are an under count of the 1990 population, which was partially corrected by the 2000 count, plus the presence of millions more immigrants than originally known by the Census Bureau.

Immigration was a major contributor to overall U.S. population growth in the 1990s, and will be even more important in the future. The total population of the U.S. rose about 32.7 million from 1990 to 2000. About 16.7 million of that gain was due to an increase of births over deaths, often referred to as a net natural increase. Hence, almost half of the total population gain was caused by net immigration.

The population growth in the United States is in direct contrast with several European nations and Japan, which are now experiencing no population growth at all. Italy is even experiencing a net loss of population. These countries also are not accepting nearly as many immigrants as the U.S. Consequently, as the life spans of their populations increase, they will have much more difficulty supporting their elderly than the U.S. will, since we have so many newcomers of working age.

In fact, many European nations are going to have to encourage entrants from abroad to maintain their labor forces at economically acceptable levels. This shift will require leaders to rethink the fundamental meaning of their own nationalities, since their future newcomers will not come from the same cultural, and even linguistic, backgrounds as most of their present populations.

A regional breakdown

A major impact of immigration on U.S. real estate markets has been an increase in housing demand within many large cities that had formerly been losing population. Chicago and New York both gained substantial population levels in the 1990s, primarily due to immigration. If it were not for immigration in the 1990s, many other large cities in the Northeast and Midwest would have experienced significantly greater population losses than they did.

In fact, I estimate that both the Northeast and the Midwest would have had net losses in population during the 1990s, if it were not for immigration. The Northeast had an estimated natural increase of 3.3 million, plus an estimated net immigration from abroad of 4.2 million. That should have produced a net increase of 7.5 million, but instead the region gained only 2.8 million residents. Those data imply that the Northeast exported a net of 4.7 million people to other parts of the U.S.!

Similar calculations imply that the Midwest exported a net of 884,000 residents to other U.S. states. In contrast, the South imported a net gain of 5 million residents from other U.S. regions, while the West imported a net of 745,000.

Because the large majority of immigrants who come from Latin America are poor, their arrival has several effects wherever they are concentrated. First, they expand the supply of low-wage labor, and our economy still needs a lot of unskilled, low-wage workers. Second, they add to the overall birth rate. Third, they consume a lot of public services, some of which they cannot pay for out of the taxes they contribute to states and localities. Fourth, they increase the total demand for housing, especially affordable housing at the low-cost end of the market.

An emotional and political issue

Many long-time Americans resent the constant inflow of immigrants, and wish the government would slow or stop it. However, the only way we could prevent a lot of illegal immigrants from entering the U.S. across our southern borders is by erecting a fortified barrier similar to the Iron Curtain the Russians used to keep people hemmed in.

The temptation to earn much higher wages in the U.S. than in Latin America is too great for many poor people to resist. We would actually have to adopt a policy of killing anyone who tried to cross the border to fully stop the flow. But Americans are not willing to support such a bloody policy, and we need immigrants to provide labor in many communities.

Furthermore, we should all remember that the vast majority of U.S. citizens are descendants of immigrants. Our nation has been built on massive immigration, and we are still using it as a major input for our present and future labor and consumption markets, and the enrichment of our culture.

Anthony Downs is senior fellow at the Brookings Institution in Washington, D.C. The views are those of the author and not necessarily those of officers, trustees or other staff members of the Brookings Institution. You can contact the columnist directly through e-mail at [email protected]

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