Immigration in Times of Recession Implications for Policy

1. Immigration Reform in 2010 César Chávez Institute, San Francisco State Univ. Immigration in Times of RecessionImplications for Policy Pia Orrenius, Ph.D. Federal Reserve Bank of Dallas Disclaimer: The views expressed herein are those of the presenter; they do not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.

2. Road Map • Effects of recession on • Foreign-born workers • Foreign-born population • Regional differences • Foreign-born vs. U.S.-born workers • Boom and bust • Lessons for the recovery • Immigration policy: ready for recovery?

3. Job losses: Taking a toll

4. Current job losses worst since 1945 Source: Bureau of Labor Statistics

5. Employment declines broad based % Change Const. Nat. Resources and Mining Trade, Transp & Util. Prof & Business Services Educ. & Health Services Leisure & Hosp. Financial Activities Mfg. Info. Other Govt. Total Note: Employment change from December 2007 to December 2009 Source: Bureau of Labor Statistics

6. Immigrant unemployment rate rises above native rate Immigrant Native Source: Orrenius and Zavodny 2009; BLS

7. Foreign-born unemployment rates rise most for less-educated Percent Source: Orrenius and Zavodny 2009; BLS

8. Immigration: Slowing

9. The foreign-born population stagnates in 2008 2008 Source: Census Bureau through 2008

10. Unauthorized immigrant population falling? Note: *DHS estimates not available for 2001-2004. Source: Department of Homeland Security; Pew Hispanic Center

11. New border fence 20 ft high Source: Wayne Cornelius (2009) “Evaluating US Immigration Control Policy”

12. Source: Wayne Cornelius (2009) “Evaluating US Immigration Control Policy”

13. More border enforcement, more port-of-entry attempts

14. Emigration from Mexico in steep decline Thousands Source: INEGI 2009 (Mexican National Statistical and Geographical Institute)

15. Apprehensions a function of labor demand(De-trended employment; lagged apprehensions) Thousands, SA Thousands, SA Employment Apprehensions Source: BLS; DHS; Authors’ own calculations

16. Geographic differences: Immigrant/native outcomes differ by state

17. Employment Growth by State OK MS LA WY TX CA AZ ID VT Source: CIS, BLS

18. Foreign-Born Populations Decline in Florida, California (2008/2007 percent change) Percent Source: Bureau of the Census

19. Boom and bust: Lessons for the recovery

20. Some lessons from the recession so far • Immigration is pro-cyclical • Immigrants are hurt more by recessions • Helped more by expansions • Immigrants are in different industries/occupations/states than natives • Limits labor market competition

21. Immigrants key to the recovery • Labor force growth • Immigrants account for one-half labor force growth

22. U.S. labor force participation rate has peaked Source: BLS

23. Labor force participation rate:Male, female rates falling since 2000 Men Women Source: BLS

24. Immigrants key to the recovery • Labor force growth • Immigrants account for one-half labor force growth • Efficiency gains • Complement native workers at high, low ends of skill distribution • Fill jobs natives shun • Move to where jobs are • Productivity growth • High-skilled immigration instrumental in high-tech innovation, R&D • Drawbacks • Winners and losers • Adverse fiscal impact of low-skilled immigration

25. Immigration Policy: Ready for recovery?

26. Green cards go to family, not work-based immigrants Note: Data represent FY 2005-2008 averages Source: DHS, 2008 Yearbook of Immigrant Statistics

27. So workers come on temporary, not permanent visas Thousands Note: Data represent 2004 to 2008 averages for new arrivals Source: State Department Visa Office; Passel and Cohn 2008, Pew Hispanic Center; DHS Yearbook of Immigration Statistics

28. Most skilled workers use temporary visas Thousands Note: Data from 1992 to 2008 Source: Statistical Yearbook of the INS; DHS Yearbook of Immigration Statistics; Visa office of the State Department

29. Almost all legal low-skilled workers use temporary visas Note: Data from 1992 to 2008 Source: Statistical Yearbook of the INS; DHS Yearbook of Immigration Statistics; visa office of the State Department

30. Most low-skilled workers come illegally Source: Jeffrey Passel and Roberto Suro, Pew Hispanic Center (2005); Passel and Cohn, Pew Hispanic Center (2008).

31. Absorbing temporary workers under current system is like swallowing this fish…

32. Green card queues spell a decade-long wait in many cases Source: State Department Visa Bulletin, March 2009; Wadhwa et al. 2007, Ewing Marion Kaufmann Foundation ; Authors’ own estimates

33. Family-based green card queue for Mexicans 60 years? Source: State Department Visa Bulletin, March 2009; Authors’ own estimates

34. Conclusion • Immigration is slowing due to the economy • U.S. long-run growth will still depend on immigrants • Policy environment is completely inadequate to deal w/ legal, illegal immigration • Amnesty alone is not enough; we need to address future flows

36. Worksite enforcement jumps Source: DHS

37. Current policy environment in flux • Some Bush policies on hold • No-match program, Real ID Act, worksite raids, higher employer fines • E-verify: immigration status verification • Obama policies: focus on labor regulations? • Legalization? • Local, state ordinances reg. illegal immigrants; enforcement of federal law • Interminable queues for green cards; running out of temporary visas