IS IMMIGRATION HURTING THE U.S.? No. Low-skilled Americans have the most to lose. But on balance, the newcomers create far more wealth than they consume. We could even use a few more go-getters.
By Jaclyn Fierman REPORTER ASSOCIATES Andrew Erdman and Jacqueline M. Graves

(FORTUNE Magazine) – A RECORD nine million people immigrated to the U.S. in the 1980s, roughly equal to the number of tempest-tossed citizens now out of work and yearning to rejoin the labor market. This coincidence has not been lost on low-skilled Americans, who are competing for fewer jobs at lower wages. But even many among the well-educated and highly paid have begun to wonder whether Lady Liberty should dim her beacon. As Cornell University labor economist Vernon Briggs puts it, ''Why allow even one unskilled worker into this country when we have so many of our own?'' Fully 61% of respondents polled in June by the New York Times and CBS News said the nation's open-armed immigration policy should be curtailed. Congress is now considering several bills to stem a separate tide -- the growing number of people seeking political asylum. Last year over 100,000 of these poured in; many disappeared permanently into the crowd after receiving temporary working papers and a date for a formal hearing. Immigration has also captured the attention of President Clinton, who says he plans to make the issue ''a priority.'' Such concern is global. In Europe, rising immigration at a time of record unemployment is expanding the ranks of right-wing parties and sparking ugly urban riots. Germany, which long boasted the Old World's most open borders, stopped hearing most new pleas for political asylum as of July 1. While things aren't nearly so bad in the U.S., recent events are fanning public anxiety. Islamic fundamentalists, some residing in the U.S. illegally, were among the suspects arrested in connection with the World Trade Center bombing and a later plot to blow up New York tunnels and buildings. The wreck along New York City's coastline of a boat loaded with nearly 300 illegal Chinese immigrants turned a spotlight on the booming Asian black market that smuggles foreigners (for hefty fees) into the U.S. What should be done? Obviously Washington can and must improve its efforts to keep out the truly dangerous. And while it's impossible to eliminate illegal immigration, the government also ought to ensure that the number of incoming illegals -- perhaps as many as 300,000 annually in recent years -- at least doesn't move higher and even begins to abate. Beyond that, however, U.S. immigration policy is basically sound and humane. There's no economic case for trimming back the current target of roughly 700,000 authorized immigrants a year, some 500,000 of whom are members of families being reunited. If anything, the U.S. should welcome more newcomers from especially desirable groups -- namely, the gifted, the ambitious, and the rich.

How many more? In 1935 economist Bernhard Ostrolenk, a Polish immigrant, rejected the idea that new arrivals competed with Americans for a finite number of jobs: ''The number is not fixed by some occult power, but increases with industrial activity.'' Prescribing slightly higher legal immigration will inflame hotheads convinced that such a policy would damage the U.S. economy. But it's based on cold facts. The Urban Institute estimates that about 74% of adult male immigrants hold jobs, vs. 72% of the general male population. Even illegals with limited education have acquitted themselves well. In 1986 the U.S. granted amnesty to three million illegal aliens, about two-thirds of whom were Mexican. Today, says economist Demetrios Papademetriou, chief immigration + expert in the Bush Administration, virtually all the adults are earning more than the minimum wage. This relative paucity of freeloaders and deadbeats means that rookie Americans, as a group, more than pay their way. George Borjas, an economics professor at the University of California at San Diego, calculates that the nation's 20 million immigrants currently receive about $1.1 billion more in cash welfare payments each year than they pay into the welfare system through taxes. But by working and spending on things like food, rent, and clothing, they also contribute $5 billion annually to the economy. Net gain for the U.S.: almost $4 billion a year. WHAT ABOUT high unemployment among America's troubled urban underclass? Can't much of that be pinned on record levels of immigration? No, says Wade Henderson, director of the Washington, D.C., office of the National Association for the Advancement of Colored People: ''You can't blame immigrants for the problems of the black poor.'' Their plight, he says, mainly arises from failures in domestic social policy rather than from immigration policy. That's not to say that wrenching displacement never occurs. Janitors in Los Angeles and hotel workers in Washington, D.C., to select two instances, were once predominantly black Americans and are now mainly immigrants. But experts agree that in most cases new arrivals replace and compete for low-skilled jobs with other immigrants, not with Americans. The garment industry is a prime example: Men and women from Latin America, the Caribbean, and the Far East sit at machines once operated by Italians and Jews. ''The garment district has always been a stepping stone for immigrants, especially those who speak no English,'' says Thomas Glubiak of New York State's Department of Labor. Compelling evidence even shows that immigrants boost overall employment on balance. In a study of the 400 largest U.S. counties, Maria Enchautegui, an economist at the Urban Institute, found that for every 100-person increase in the population of adult immigrants, the number of new jobs rose by 46. By contrast, for every 100 new native-born Americans, the number of jobs rose by just 25. Toy Town in Los Angeles demonstrates how immigrants can raise employment, revitalize neighborhoods, even expand global trade. Smack in the middle of L.A.'s version of the Bowery, some 300 wholesalers sell over $1 billion a year of low-tech toys made in the Far East -- blocks, guns, jump ropes, soldiers, ^ dolls. The merchants were largely born in Taiwan, Hong Kong, and Vietnam, and arrived in the U.S. almost penniless. But the business required little English, and warehouse space in the area was cheap. Today Toy Town employs 2,000 people. Its entrepreneurs sell not only to toy outlets in the U.S., but also to those in Mexico, Canada, and Eastern Europe. Among the most successful is Charles Woo, 41, born in Hong Kong and partially paralyzed by a childhood bout with polio. In 1969 he came to the U.S. to study physics at UCLA. Ten years later, on the verge of receiving his doctorate, he quit school to start ABC Toys with his brother, Shu. ''We know what American kids want,'' he says. Five years ago he started a second wholesale company, Mega Toys, whose 15 employees sell $15 million of goods a year. Though immigration's long-term benefits are compelling, the short-term adjustment costs can be high, particularly since the task of absorbing one million people a year is not evenly distributed across the country. It falls hardest on six cities: Los Angeles, New York, Chicago, Houston, Washington, and Miami. While illegals don't qualify for, say, food stamps or welfare payments, every youngster living in the U.S. is entitled by law to an education, regardless of the family's immigration status. Likewise, public hospitals, despite acute overcrowding and underfunding, must be blind when responding to medical emergencies. Record inflows of refugees, immigrants, and illegals have forced the overburdened to go begging. California Governor Pete Wilson has asked Washington for $1.45 billion to cover immigrant expenses. New York has asked the federal government to take custody of the 3,000 illegal aliens crowding state jails at a cost of $65 million a year.

Others who have a right to feel shortchanged are the country's unskilled laborers. During the Eighties the gap between what they pocketed, on average, and what college graduates earned grew from 26% to 55%. This widening wage differential is mainly caused by rising competition from low-paid foreign workers who stay at home -- and who are taking away market share in industries the U.S. once dominated. Still, Harvard economist Richard Freeman attributes about one-third of the gap to the fact that the ranks of willing but poorly educated workers were swelled by immigrants. However, the only sure-fire way to help displaced blue-collar Americans, he says, is through better education and training, not through immigration policy. Even so, don't make the mistake of assuming that every last newcomer entering the country is short on book learning. Fully 25% of the arrivals in the Eighties had college degrees, according to the Urban Institute. The new American is someone around 26 years old, as likely to be male as female. He or she is an urban creature, apt to settle in an ethnic enclave along a public transportation line, and similar to the people Harper's magazine described in 1914: ''America's attraction is not to the good or the bad, to the saint or to the sinner, but to the young, the aggressive, the restless, the ambitious.'' What has changed is the skin color, culture, and language of immigrants. In the Fifties, 53% of them came from Europe and just 6% from Asia. During the Eighties only 11% were European; most of the rest were evenly split between Asians and Latinos. Asians settled mainly in California; Latinos spread out. Behind the geographic flip-flop was a sweeping immigration reform in the mid-Sixties that redressed a long history of racist policy. Despite a sterling record -- the U.S. currently admits more legal immigrants than all other potential host nations combined -- the country has always been of two minds about coping with hordes of newcomers. Almost every poll ever published on the subject, and there have been dozens since the 1930s, shows that a majority of Americans -- predominantly descendants of immigrants -- favor further limits on immigration. Says Rita Simon, author of The Ambivalent Welcome, a new book on the subject: ''It is something of a miracle that over 50 million immigrants gained entry to the U.S. between 1880 and 1990.''

SWEPT UP in the spirit of the civil rights movement, however, the U.S. in 1965 started to do away with quotas that favored white Europeans and made family reunification the pillar of its new policy. (Before, family ties carried less weight in decisions to grant entry.) In poured children, parents, spouses, and siblings from all parts of the world. In 1990, Congress took another stab at immigration reform, this time with a more focused economic eye. The government nearly tripled to 140,000 the number of visas distributed on the basis of skills. Here's the breakdown. Skilled workers and their families get roughly 120,000 visas; the unskilled, 10,000. Another 10,000 visas are reserved for people willing to invest $1 million in the U.S. Even among the half a million visas handed out to unite families, don't assume the bulk go to unskilled workers. Most families are a mix. Tagging along behind Papa, who has a sixth-grade education, might be his son the rocket scientist. When Washington revisits immigration policy, what talents should it favor? One of the most urgently needed might not strike some as a ''skill.'' In the alphabet soup of categories, unskilled visas -- classified EW, jokingly referred to as the Eternally Waiting group -- include those for child care workers and home health aides. ''The wait is 16 years, time enough for that person to care for the next generation,'' says Theodore Ruthizer, a New York immigration attorney. Ruthizer argues compellingly that foreign-born nannies and other caretakers ought to be able to work lawfully while they wait for their papers -- a limbo that should be limited to three years. Washington might consider reclassifying these much-in-demand people as skilled workers. Any conscientious parent would agree with that designation. The road for artists who uplift our spirits can be as tortuous as the one the unskilled must travel. German cinematographer Michael Ballhaus, 57, is valued in Hollywood for his ability to ''shoot a $10 million movie on a $5 million budget,'' as he puts it. His credits include hits like Martin Scorsese's Goodfellas and Mike Nichols's Working Girl. But despite investing three years and $20,000 for immigration lawyers, Ballhaus was repeatedly denied a green card in the category reserved for gifted artists on grounds that his talents were technical, not artistic. In 1987 he -- and 1.4 million others -- entered the immigration sweepstakes, a quirky component of U.S. immigration law that now selects 40,000 winners a year. Ballhaus won his green card; Hollywood won too. America's ambivalence about welcoming the talented, the tired, and the poor even extends to the rich. The 1990 reform made a modest effort to change that, allocating 10,000 visas a year to foreigners willing to set up shop in the U.S. with at least a $1 million investment (or $500,000 in depressed areas) and hire ten Americans to work at the business. So far only 725 people have sought permanent residence by this route. By the end of May the Immigration and Naturalization Service had approved 296 applications and rejected 140, and was still weighing the rest. ONE WHO KNOCKED on this door is Taiwan's Tomi Huang, 46. Huang started a tour bus company in California in 1991. Huang bought four buses for $300,000 each and employs the requisite ten people, plus one. She rents out the buses -- complete with drivers who speak Spanish, English, or Chinese -- to travel agents who in turn book foreign clients to Disneyland, Las Vegas, and other West Coast attractions. Huang, whose family owns a taxi company in Taiwan and ''half a mountainside'' with fruit trees, says she started the business after taking a bus tour herself. ''It looked like fun, and I figured I could do it,'' she says. ''You don't need a college degree to do an honest day's work.'' Why have so few entrepreneurs applied for the new program? For one thing, the approval process is arduous and risky. Prospective Americans must first make the investment plunge and then wait two years before the federal government will even consider issuing a permanent visa. The approval process itself can take up to a year. ''If the business fails before you get your final papers, you could get deported,'' says Howard Hom, a Los Angeles immigration lawyer. Many entrepreneurs and investors with money to spare have bypassed the U.S. and headed for Canada. Little wonder. The red tape there is minimal, and the investment threshold can be as low as $250,000. Result: Canada has attracted some $3 billion in new investment since 1986, far more than the U.S. is on track to achieve. Other than stealing a page from Canada, what else should Washington do? Approving a few additional impact grants to help cities that host the poorest of arrivals might make sense. But footing local bills entirely is not the answer, since these communities ultimately benefit from immigrants' economic activism. Instead, Washington ought to consider doubling what it spends on English-language programs for children and adults, to about $1 billion. Learning their adopted land's tongue, most immigrants agree, is the hardest challenge they face and the biggest barrier to getting a foot on the job ladder -- and then climbing it. Supporting efforts like the North American Free Trade Agreement should also help bolster Third World economies and stem the tide of impoverished, unskilled workers seeking opportunity in the U.S. Certainly NAFTA seems a far better bet than trying to police 7,582 miles of border with fewer than 4,000 patrolmen. Economist Sherman Robinson of the University of California at Berkeley estimates that each percentage point increase in the value of Mexico's capital stock -- the new buildings, businesses, and factories that a NAFTA-spurred investment boom would give rise to -- would be enough stimulus to keep 25,000 of its citizens at home. Finally, if Bill Clinton is really hankering for an exciting new way to shake up U.S. immigration policy and boost job creation, here's a terrific idea from Nobel Prize-winning economist Gary Becker: Sell visas. Fix the price at perhaps $50,000 or some level sufficient to attract those seriously seeking opportunity, not a free ride. Lack of wealth or skills should not exclude prospective Americans. Let the poor come on a federal loan that they would have to pay back over time or face deportation. ''This would ensure we would get only the ambitious,'' says Becker. What better population screen could the U.S. ask for?