New Melting Pot

How immigration helps keep the U.S. competitive and financially strong.

By GENE EPSTEIN

If the nation had even dimly imagined that over the next 35 years the door would swing wide to more than 20 million immigrants -- about a third from Asia, and more than half from Latin America -- the '65 act would probably have died in committee.Today Americans are smarter and more tolerant than that. Their sitting president courts the Hispanic vote and appoints minorities to high places in government. But another demographic sea-change is looming that might be just as unexpected as the first -- and perhaps even more threatening. The Statue of Liberty has been sending its siren call not so much to the "tired ... huddled masses yearning to breath free," but to the tough and tenacious yearning to write code; the smart and persistent willing to master hard disciplines such as engineering and computer science; and those tender

Could all this occur despite the xenophobia that always lurks in the recesses of both right-wing and left-wing politics? Well, if immigrant labor was able to establish such a huge beachhead over the past 30 years, while the native-born variety was still plentiful, think of what could occur when the natives become scarce. The era of scarce labor will begin around 2010, when the baby boomers start to retire in significant numbers. From 2010 to 2030, the labor force is expected to increase by less than 8%, even assuming some increase in the share of foreign-born residents, while the number of folks 65 and older will double. In that lopsided scenario, certain things will have to give. Business will be eager to tap that surging market of idle baby boomers, but will still have difficulty finding help. So it will offer even greater incentives to induce aging employees to stay on the job; it will try to move more work offshore; and it will step up its effort to find labor-saving ways to produce. Business will also lobby government more aggressively than ever to open the door to foreign labor. And government should welcome the extra tax revenue that can be tapped from a larger labor pool to help cover the staggering financial claims of the growing pool of retired people. As noted, the labor mix is also likely to shift in favor of the skilled trades that the foreign-born are already beginning to fill in large numbers: engineering, science, math, medicine and virtually all aspects of computer-systems work. Also, the needs of the aging population will create enormous opportunity for care-giving workers such as licensed practical nurses, nurses' aides, physicians' assistants, physical therapists and home health aides -- jobs that also attract the foreign-born in large numbers. Foreign-born workers have been gaining ground for two timeworn reasons, the second one with a modern twist. First, immigrant workers are cheaper than natives. And second, immigrants are willing to do jobs the natives spurn. What's different now is that so many of these jobs bring high status and good pay. For employer Robert Pollack, the main issue is money. "The country can't afford not to have immigration," he remarks. And neither can Pollack Realtors. By confining his business to relatively small-scale work with a price tag of no more than about $10 million -- among his current projects is a spa in lower Manhattan -- this New York City-based builder manages to stay below the radar of the unions. Most of the people he hires are paid as day-laborers and receive no benefits, especially not workmen's compensation, which is ruinously expensive. The work-crews specialize along ethnic lines. For example, immigrant Irish do the excavating. West Indians do the flooring, the Hispanics paint and Chinese workers install the plumbing fixtures. His electricians are Italian-born, and he would love to use Italians to do the exterior masonry. "They've have always been masterful masons," he remarks. "Just have a look at the churches in Italy." But at $40 an hour, he can't afford them. So he employs Indians, Pakistanis and Bangladeshis to do the exterior work. The workers are paid between $7 and $15 an hour, depending on experience and skill. The $15-an-hour people are effectively working supervisors, and are often the only ones who can speak English.

The San Francisco-based Gary Taorminia, whose specialty is renovating homes his clients want to sell, says that his plumbing contractor, who is Chinese, used to work for someone else before he became independent. "If I need him," says Taorminia, "I can call him in the middle of the night or on Sundays. Who can beat that?"

He also remarks that in his city, house painting is dominated by Latinos. He recently solicited bids for a paint job on a 2,400-square-foot home. One was for $16,000; the other, from an Hispanic contractor, was for $8,000.

According to the Bureau of Labor Statistics, of the 5.9 million people employed in the skilled construction trades in 2001, 16.3% were foreign-born, up from 10.7% in 1996.

The movement of foreign-born workers into academia has virtually nothing to do with underselling the natives; it's all about taking jobs the natives spurn.

Ambitious folks from abroad will have a natural tendency to pursue careers for which proficiency in English is less important than technical skills. But the numbers suggest, and anecdotal evidence confirms, that instead of holding their own, the natives are in retreat.

The BLS counts 42,000 more jobs in academia than there were in 1996, but 36,000 fewer natives holding academic jobs. The agency balances those books by finding 78,000 more immigrants employed in academia.

Says Daniel Hamermesh, professor of economics at the University of Texas: "These are not just graduate assistants and adjuncts, but people with full-time professorships in a whole range of specialties. And it isn't just in the hard sciences."

Considering that immigrants receive a huge share of the doctorates awarded by American universities, the flourishing of foreign-born faculty is not surprising. According to most recent data from the U.S. Department of Education, in 1996 nonresident aliens received 23.8% of the doctorates in the social sciences, 26.9% in the life sciences, 35% in the physical sciences and 48.9% in engineering. Today those shares are probably even higher.

One way to alleviate the serious shortage of nurses over the long run is to pay nurses more. At some higher wage level, supply would eventually meet demand. But what hospitals are doing instead of raising wages is recruiting women from abroad who are willing to do the job at the existing wage-rates.

Under the circumstances, it's hard to imagine enough recruits can be found. The Bureau of Labor Statistics calculates that the U.S. will need to hire close to a million new registered nurses by 2010. Since the BLS parks the little word "net" in front of that forecast, it's even more dire than it sounds. What it really means is that after you include all those who are expected to become RNs by 2010, a million more will be required.

Using the same "netting" method, the BLS adds another 800,000 licensed practical nurses and nursing aides to the 2010 wish list. And it's not until 2010 that the baby boomers will begin to make their own special demands on the nursing profession.

The recruiting effort is gearing up. The National Council of State Boards of Nursing decided just last month to offer the licensing exam at overseas sites by 2004. Now that foreign students view nursing school as their entree to the United States, the number of test-takers is likely to soar.

The Philippines, which educates thousands more nurses each year than the country employs, is already a major exporter of these workers. You can even imagine the U.S. government eventually offering to underwrite nursing schools abroad.

Dr. Donald W. Dworkin, a senior fellow at the Hudson Institute, anticipates a perverse outcome from these efforts. "The influx of foreigners hasn't hurt the status of fields like medicine and engineering," he explains. "But since the status of nursing has already been declining for some time, the profession is vulnerable to a further debasement of its image as more foreigners become nurses."

Dworkin adds, "Resident staff will start to feel they're working in jobs no self-respecting American would consider. So as more foreigners enter the profession, more Americans will leave, which would eventually mean that most hospital nurses might become foreign."

As a matter of law, the federal government's H-1B visa program is supposed to be a pure case of foreigners performing skilled jobs for which native-born workers aren't available. At least, that's what a company has to "prove" when it files an application with the Labor Department to hire a foreign worker on an H-1B visa.

But as one critic has justly remarked, "Companies want cheap labor. The question isn't whether one can find a Visual Basic programmer, but who to find at the price one wants to pay."

Precisely. That's the way employers generally go about hiring workers.

As part of the H-1B charade, the employer must first establish a "prevailing wage" for the job that would be offered to "individuals with similar experience and qualifications," in the words of the Labor Department manual. And they're talking about skilled work! During the IT boom, large tech companies such as Motorola, Intel and Sun Microsystems kept lobbying Congress for higher caps on the number of visas that could be issued each year. In 2001, the cap was raised to 195,000, but through the first three quarters of fiscal year '02, only 60,500 visas have been approved. If Congress does nothing, then the cap will revert to 65,000 by fiscal year '04.