November 27, 2007

National Data, By Edwin S. Rubenstein

Upward Mobility Eludes Blacks – Is Immigration the Reason?

In America, upward mobility is not just a dream: Historically, it’s the norm. But two recent studies have uncovered cracks in the ever-better-life scenario.

Immigration is a likely—albeit unacknowledged—culprit in both.

The first study, a survey by the Pew Research Center released in November, presents household income figures for selected years since 1980. [Blacks See Growing Values Gap Between Poor and Middle Class, November 13, 2007] (Table 1.) Here are inflation-adjusted income growth rates for the major racial groups:

The Bush years have been bad for everyone. But since 2000, black and Hispanic households in particular have lost ground, relinquishing much of the gains they made in earlier decades.

These Bush years were also, notoriously, a period of extraordinary high legal and illegal immigration.

And the 2000-06 trend—minority incomes falling relative to that of non-Hispanic whites—is exactly what you would expect if unskilled immigrants were displacing unskilled native-born Americans.

Unfortunately, the Pew report does not break out native and immigrant households separately.

(Perhaps more unfortunate:  blacks rank illegal immigration the least important of the six community problems tested in the Pew survey.)

The second study—also just released—drills down further into the income data.

Brookings Institution scholar Julia Isaacs brings some good news: two-thirds of us who were children in the late-1960s have grown up to earn more (adjusted for inflation) than our parents did at a similar stage in their life. In 2006 median family income of adults who were children in the late 1960s was $71,900, up 29 percent from their parents’ income in 1968. [ Economic Mobility of Families Across Generations , November 2007(PDF)]

But, as in the Pew study, these income gains are not evenly distributed. Isaacs finds that black family income fell relative to white family income through most of the 1974 to 2004 period. (She ignores trends in Hispanic family incomes, citing "data constraints" in the 2,400-person survey used for the analysis.)

Why do blacks lag? Blame the men.

Consider the enormous female advantage in median income growth (in 2004 dollars) between 1974 and 2004.

The reduction in black male income relative to that of black females and white males is consistent with a group competing—unsuccessfully—with an onslaught of unskilled, predominantly male, immigrants.

(But note that white male incomes are also down slightly over this period. Household income rose mainly because more wives work).

Another clue: if unskilled immigrants were behind the black income malaise, poor blacks should be faring poorer relative to richer blacks. And Isaacs’ data appear to corroborate this: A startling 48 percent of black children whose parents were in the second lowest quintile descended to the bottom quintile of black income in 2004. By contrast, only 11 percent of top quintile Blacks dropped to the next highest quintile.

The economic theory is clear: unskilled immigration is a boon to individuals with high levels of financial and human capital, and a bane to those with low levels of capital.  Native-born blacks are underrepresented among the beneficiaries and overrepresented among those harmed.

George Borjas estimates that native-born blacks gain only $3 billion from financial holdings but lose $15 billion as workers, resulting in a black per capita income loss of $300 annually. [See Heaven's Door, 93-94.]

The two studies seem to offer plenty of supporting evidence. But their sample sizes are too small to yield definitive, statistically significant conclusions. A larger survey is needed to tease out details on native and immigrant income trends, the differential impact of legals v. illegals, Mexicans v. non-Mexicans, dropouts v. Ph.D.s, etc., etc.

Memo to Hillary, Barack, John Edwards, et al.: Surely immigration is impacting your supporters enough to warrant a large-scale study. Fund it!