Immigration and economic growth

["Charles Brown" <CharlesB@xxxxxxxxxxxxxxxxxxxxx>]

Immigration and economic growth

By Wadi'h Halabi (Peoples Weekly World)

Capital has been flooding into the U.S. since the 1991 Gulf War. In the three months after imperialism began bombing Yugoslavia in 1999, capital gushed into the U.S. at the extraordinary annual rate of $1,109 billion, according to Federal Reserve Bank statistics. This capital is fleeing the instability, wars, declining profit rates and outright losses found in more and more of the capitalist world. Its flight contributes to further destabilization of those areas. Its inflow in turn has been a real, if unpublicized * and temporary * factor in the longest economic expansion in U.S. history.

Immigrants have also been coming to the U.S. in growing numbers since the Gulf War. Nearly 12 million people, three-quarters with documents, came to the U.S. in the 1990s, breaking the previous record of 8.8 million set in 1901-1910. Most are attempting to flee the low wages, mass unemployment, insecurity and conflicts characterizing more and more of the capitalist world. Their departure further impoverishes their countries of origin. And receiving even less publicity are the contributions of immigrants to the U.S. economic expansion.

Immigrants accounted for one-quarter to one-third of the growth in the U.S. labor force in the last decade. Without immigrants, the U.S. economy could not have grown as it did in the 1990s. Without immigrants' labor and purchases, the economies of the largest U.S. metropolitan areas, from N.Y. to Silicon Valley, would slump or stop functioning. Immigrants are reported to account for one-quarter to one-third of home purchases in New York City, Los Angeles and several other cities.

Recent articles in Southwest Economy, a regional publication of the Federal Reserve Bank, and a study commissioned by the National Academy of Sciences (James Smith and Barry Edmonston, eds., The New Americans) testify to a few of the contributions from immigrants. According to New Americans, federal and local governments enjoy an average net gain (in present dollars) of $80,000 from each immigrant and children. That is how much taxes paid by immigrants will exceed the cost of government services, with the Pentagon and prisons included in calculations of "services."

New Americans estimates that the net contribution to government from highly educated immigrants and their children will average $200,000. All in all, that comes to about $1 trillion in net gains to government from the 1990s immigrantion alone.

In addition, New Americans does not fully take into account the savings to the U.S. from having other countries raise and educate immigrants, whose median age on arriving is about 25. And, typical of capitalist economic studies, the work does not even mention the profits made from immigrants' labor.

An important fact from Southwest Economy is that California and Texas, two states bordering Mexico, now have the highest manufacturing employment of all the states in the U.S. As recently as 1985, New York, Ohio and Pennsylvania ranked ahead of Texas in manufacturing employment.

In addition, if maquiladoras, the factories in Mexico, primarily producing for U.S. corporations, were counted as a "state," their 1.1 million workers would have placed them between California and Texas in manufacturing employment.

"One of the best-kept secrets in Washington D.C.," crows the Federal Rreserve's Southwest Economy, "is that NAFTA is a success ... Maquiladora manufacturing [should be] thought of as a physical extension of Texas and California production," keeping U.S. corporations "competitive" in the unmentioned "race to the bottom."

Why then is there so much capitalist-inspired propaganda and discrimination against immigrants? For the same reason there is relentless discrimination against African-Americans, Puerto Ricans and other people of color * to keep labor divided and cheap. Recent immigrants' earnings averaged 33 percent below those of U.S.-born workers in 1998; they had been 12 percent lower in 1960.

Immigrant workers face some of the hardest work, lowest wages, poorest benefits and worst housing conditions in the United States. But immigrants have not been mere passive victims of capitalism. Immigrants have been prominent in recent labor-led struggles * economic and political * throughout the U.S., from New York to California. Immigrant workers, together with African Americans and Puerto Ricans, are certain to be prominent in the coming struggles to unite workers of all countries and skin colors.

A button worn by a Southern California trade union leader sums up some of the capitalists' worst fears:"Those darn immigrants," it reads, "are scaring away all the bigots"!