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Shut Out Immigrants And Trade May Suffer


Economics: Commentary

SHUT OUT IMMIGRANTS AND TRADE MAY SUFFER

Americans are hurting. So are the Japanese and Europeans. In the U.S., unemployment is high and job prospects bleak. Japan's economy is mired in its worst downturn in two decades. Unemployment is expected to hit 12% in Europe. And more and more, workers in the major industrialized nations are blaming immigrants for everything from lost jobs to overburdened social services.

No wonder. Over the past several years, immigrants have poured into the rich nations. Nearly 10 million came to America in the past decade, and newcomers now make up about 8.5% of the U.S.'s population. Western Europe is catching up fast. Officially, foreigners comprise 6.4% of France's population and 8.2% of Germany's, but these figures understate actual inflows. Japan, which has long kept out outsiders, saw the number of foreigners overstaying their visas go from 20,500 in 1989 to 280,000 in 1992.

Why the surge in immigration? Some immigrants, such as the refugees from Bosnia and Herzegovina, are fleeing civil war. Natural disasters also drive millions from their homes. And, of course, the lure of higher living standards in the U.S., Europe, and Japan induces many to leave behind grinding poverty.

MARKET FORCES. But the forces behind the current immigration wave run even deeper and will intensify in coming years. For one thing, the rise of the global economy has forged strong trade and information links between developed and developing nations. And these trade routes for goods and services are now becoming bridges for people to cross into the richer countries.

Just as important is the move toward market economies around the world. Capitalism is both speeding the pace of economic growth and creating all sorts of economic dislocations in the developing countries. "Over the short term of one to two decades, the effects of successful and rapid economic development are profoundly destabilizing and tend to increase the impetus toward outmigration rather than moderate it," says Michael S. Teitelbaum, program officer at the Alfred P. Sloan Foundation.

Recent history shows that fast growth and a rising standard of living lead to more emigration--not less. In the 1970s, economic growth for most of the leading emigrant countries ranged from 5% to 9% a year, notes Saskia Sassen, professor of urban planning at Columbia University. South Korea's economy, for example, boomed at a 10% annual rate, about the highest in the world for that decade. Yet South Korea was also the country with the fastest-growing level of migration into the U.S. during the 70s.

TALENT HUNT. Look at China. That country's per capita income has surged by some 50% since 1989, as economic opportunities have soared along with freer markets. Yet the smugglers' ship carrying nearly 300 illegal Chinese immigrants that ran aground off New York City on June 6 was only a minuscule part of a massive inflow of Chinese into the U.S. and other countries. In recent years, the booming economies of Indonesia and Malaysia have been a new source of immigration to the U.S. Illegal immigration into Japan has also been coming mostly from such relatively well-off developing nations as Thailand, Malaysia, and South Korea, countries with strong trade and investment bridges with Japan, says Columbia's Sassen.

The North American Free Trade Agreement, if passed into law, could also hike immigration into the U.S. from Mexico. Most economists expect the Mexican economy to surge as trade and investment between the two neighbors increases with NAFTA. Rising Mexican incomes mean more Mexicans will be able to afford to leave the country, says Jagdish Bhagwati, an economist at Columbia University. In addition, America's agricultural technology will displace much of Mexico's rural labor force. The same holds true for Eastern and Western Europe: As the previously closed economies of the East open up to the world trading system and growth picks up, immigration will remain strong into the West.

Multinational corporations and export-oriented companies, on a global talent hunt, also stoke the immigrant express. They recruit bright young people from the developing world and help them settle in the U.S. and Europe. Other immigrants come to the industrialized nations as students, then stay. More than 1 million students, primarily from the developing nations, are in school in North America, Western Europe, and Japan, says Aaron Segal, a political scientist at the University of Texas at El Paso. And the demand for immigrant labor in service-sector industries is pulling in unskilled migrants from the developing countries.

The global communications revolution also adds to the immigrant stream. Cable News Network and MTV are surely signs of rising living standards overseas. Yet they expose many foreigners to far higher living standards in the U.S. and Europe. Telephones and faxes let immigrants keep in touch with family and friends, and these social networks encourage others to follow. "High tech has just revolutionized migration," says Nestor Rodriguez, a sociologist at the University of Houston.

TRADE CONNECTIONS. Immigrant entrepreneurs further strengthen ties between their new homelands and the old countries. With a global perspective and ready-made contacts overseas, immigrants often start export-oriented companies. These companies boost the trade and finance links between nations. And they open up another means for new immigrants to work their way into the developed nations.

Unconstrained, immigration into the industrial world is certain to grow rapidly in the 1990s. And for countries such as the U.S. and Germany that are already experiencing a huge inflow of immigrants, this poses some difficult choices. On the face of it, calls to close down the borders make some sense. But the costs to the world economy may be too dear. Freer trade is propelling the global economy forward--and trade and immigration reinforce each other. So a move to curtail the movement of people may in the end also reduce the flow of goods between nations.THE IMMIGRANT TIDE

Foreign population as a

percent of total population

1985 1990

AUSTRIA 3.6% 5.3%

BRITAIN 3.1 3.3

GERMANY* 7.2 8.2

SWEDEN 4.6 5.6

U.S. 7.0 8.5

SWITZERLAND 14.5 16.3

*Former West Germany

DATA: ORGANIZATION FOR COOPERATION & DEVELOPMENT, URBAN INSTITUTE

Christopher Farrell


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