The poverty rate is down slightly, to 12.3%. Phooey.
For more than two decades following the end of World War II, rising incomes and declining poverty rates characterized the American economy. In 1947 nearly one-third (32 percent) of all families were officially classified as poor. [Have Antipoverty Programs Increased Poverty? James Gwartney and Thomas S. MeCaleb, The Cato Journal, Spring-Summer 1985 (PDF)] By 1959 only one-fifth (22.4 percent) were poor. By 1973, the fraction of Americans living in poverty had dropped to just over a tenth, to 11.1 percent.
Then everything came to a screeching halt. The poverty rate rose to the 15 percent range in the eighties and early nineties. The Clinton boom pushed poverty down 11.3 percent in 2000, but it has since rebounded.
Basically, the poverty rate has been oscillating in the 11-15 percent range for more than thirty years. It has never bettered the low set in 1973—34 years ago.
Incredible as it may seem, progress against poverty came to a grinding halt in the late 1960s exactly as federal transfers were expanding at a record pace. Most of the postwar decline in poverty occurred before Lyndon Johnson's Great Society reached full throttle.
Perhaps we shouldn't be surprised. LBJ's War On Poverty programs proved to be an irresistible draw to millions of impoverished foreign born—who could enter legally after the floodgates were opened by the 1965 Immigration Act.
The quality of immigrants deteriorated dramatically after that legislation was signed into law. In 1960, for example, new immigrants were generally better educated, earned more, and were less likely to be poor than natives. But by the end of the 20th century, new arrivals had two fewer years of education and earned one-third less than natives. [See The Top Ten Symptoms of Immigration, by George J. Borjas, CIS, November 1999]
Data for 2006 show that the poverty rate for recent (non-citizen) arrivals is nearly twice that of natives: [Source: Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2006, August 2007. Table 6. PDF]
Native born: 11.9 percent are poor
Foreign born (all): 15.2 percent
Foreign born (non-citizens): 19.0 percent
Immigrants, legal and illegal, accounted for 12.6 percent America's population, but 15.6 percent of the its poor in 2006. Of course, we should also include their native-born "anchor babies" to gauge their full impact. My estimate: immigrants and their children are 23.0 percent of the U.S. poverty population.
Illegals are a particularly acute problem. They are included among "non-citizens," who amount to 7.7 percent of the U.S. population and 11.8 percent of its poverty population. But this category also includes highly educated guest workers, students, and others who are not likely to be poor. Calculating poverty rates for the illegal alien population is tricky, not the least because (needless to say) the Census does not record the legal status of respondents to its annual poverty survey.
Luckily, researchers at the Pew Hispanic Center have isolated the "extra" immigrants – i.e., those that appear to be over and above the potential legal immigrant population. [See discussion in Robert Rector, "How Poor Are America's Poor?", Heritage Foundation Backgrounder, August 27, 2007 and Unauthorized Migrants: Numbers and Characteristics, Pew Hispanic Center, June 14, 2005, (PDF)] They arrive at a figure of 10 to 11 million illegals, which may well be too low. Nevertheless, poverty rates for illegals are alarmingly high:
All illegals: 30 percent are poor
Illegals and their U.S. born children: 37 percent are poor
About 4.7 million children of illegal immigrant parents live in the U.S., according to the Pew Hispanic Center. They account for 6 percent of all children in the U.S., but 11.8 percent of poor children.
Of course, that's only the static effect of immigration. The dynamic effect of immigration—the displacement of American workers and overall wage depression—must be responsible for some portion of the American-born poverty population.
My estimate: some 20 percent of the native poor would not be poor without competition from immigrants. That's about 6 million fewer native poor. The overall poverty would fall from 12.3% to 10.1%.
We would love to be optimistic about the second- and third- generation of immigrants. Unfortunately, this optimism is hard to justify: The poverty rate for non-immigrant Hispanic families is about 19 percent, or more than half as much again the rate for all non-immigrant families. Only black non-immigrants, with a 26 percent poverty rate, fare worse than Hispanic non-immigrants.
With Hispanic birth rates so much above the national average, a second underclass is clearly developing. Even an immigration moratorium won't keep poverty from drifting higher.
Nevertheless, without an immigration moratorium, things are going to get much worse.
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.
