August 30, 2007
Hispanics Saved New Orleans? Look again
“Nor
is there evidence that they are taking jobs from native
New Orleanians. As of April, the last month for which
data are available, unemployment in Orleans Parish was
4.0%, compared with 4.5% nationwide. By comparison, in
July 2005, the Orleans Parish unemployment rate was 7%,
two percentage points above the national figure."
—“The New Latin
Quarter”,
(pay
archive |
free version)
by
Mario Villarreal [email]
and Daniel M. Rothschild, [email],
Wall Street Journal, August 28, 2007.
Thus an op-ed in the
Wall Street Journal (where else?) discussing the
role
Hispanic immigrants (allegedly) play in that city’s
(alleged)
comeback.
The piece, needless to
say, is celebratory. One of the authors is a Mexican
public policy academic (and
scholar at the American Enterprise Institute). The
other is a
director of the George Mason University’s Global
Prosperity Initiative.
Things are great
now, they say, certainly compared to what pundits had
anticipated when the post-Katrina
Hispanic influx first became
apparent.
Really?
Yes, unemployment rates are lower in New Orleans
today than before Katrina. But so is
native employment. Between July 1, 2005 and July 1,
2006 (the latest available Census data) the population
of Orleans Parish fell by a stunning 228,782, or by
50.6%. [Table 1.]
Non-Hispanic Blacks took the biggest hit, their
population dropping by 174,461, or 57% in those 12
months. The non-Hispanic white population declined by
36%.
Even Hispanics bailed out (so to speak)—their numbers
declining by 37.1%.
Of course, it was a
natural disaster, not an immigration tsunami,
that displaced most Parish residents. But the secondary
tsunami—the influx of Hispanic immigrants into areas
vacated by natives—deserves a closer look.
Economists have spent
countless hours studying the
impact of immigration on native workers. The
original starting point for most of these studies was
the fact that immigrants cluster in a small number of
cities and metro areas. If immigration is damaging, then
cities with higher penetrations of immigration workers
should experience higher rates of native unemployment
and/or lower levels of native wages.
But most of the cross-city correlations cluster
around zero—suggesting that immigrants have little or no
impact on the economic fortunes of natives. At first
glance, this seemed to confirm the
“immigrants do the jobs that natives
don't want to do” mantra.
However, economists have more recently realized that
this comforting result ignores two important points.
With labor so mobile, the negative correlation
between immigration and native well-being must be judged
in a national framework. Harvard’s George Borjas has
measured the negative slope. [Increasing
the Supply of Labor Through Immigration Measuring the
Impact on Native-born Workers, Center for
Immigration Studies May 2004] His conclusion:
wages fall by 3 to 4 percent for each 10 percent
increase in the share of immigrants.
The post-Katrina story of Orleans Parish is not
unlike that of other immigrant gateways throughout the
United States. Unemployment is low and native wages do
not seem to have suffered—until you look at the larger
picture.
But don’t expect the Wall Street Journal Edit
Page to do that anytime soon.
Edwin S. Rubenstein (email
him) is President of
ESR Research Economic Consultants in Indianapolis.
