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Open the Gates

Reasons why immigration may be the most effective way to boost the economy.
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Immigration just might be the most effective way we have to give the economy a boost

Let me tell you about my friend Rod Hosilyk. The founder of Computer Products Plus Inc., a computer accessories marketing and service firm, he's the type of guy who never met a regulation he liked. So you can imagine my reaction when he mentioned recently that he was thinking of setting up an affirmative-action program at his new company.

"Well, I have to do something," he said, smiling. "I need to find a technician somewhere whose first language isn't Vietnamese."

In his own way, Hosilyk was acknowledging the enormous debt he and other entrepreneurs owe to the refugees who have flooded into southern California over the past 15 years. According to one estimate, there are more than 60,000 Southeast Asian immigrants in Orange County alone. At virtually every technology company in the area, these newcomers have become the mainstays of the assembly and technical areas. "Without the influx of Asians, particularly Vietnamese," says Robert Kelley Jr., president of SO/CAL/TEN, an association of some 200 southern California high-tech businesses, "we would not have had the entrepreneurial explosion we've seen in places like Orange County."

This is a fact that seems to escape many leading members of the Senate, who have been pushing plans to limit the immigration flow. No matter that more than 46,000 people -- terrified by recent events in China -- have applied for visas to emigrate from Hong Kong to the United States. Influential politicans from both ends of the political spectrum argue that we are better off restricting the number we let in.

Sen. Edward M. Kennedy (D-Massachusetts), for one, favors a system whereby certain categories of applicants for immigration would receive extra points for proficiency in the English language. Proponents of the plan say it would encourage immigration of those more ready to contribute to our society. Yet as Sen. Paul Simon (D-Illinois) points out, 13 of the valedictorians of Boston's 17 public high schools are foreign born, and most of them spoke no English when they got here. Nor is Boston an exception.

Sen. Alan K. Simpson (R-Wyoming) takes a more direct approach than Kennedy, citing polls showing public opposition to immigration. Of course, such attitudes are hardly new. If you had polled the Indians, they would no doubt have favored cutting off the flow of Pilgrims. Polls aside, Simpson sees a risk in opening our doors. If we're not careful, he warns, we may experience a kind of "compassion fatigue." He also argues that the burden of immigration falls heaviest on less fortunate Americans, particularly poor blacks.

But this widely held belief is refuted by a new report from the National Bureau of Economic Research Inc., in Cambridge, Mass. The study's authors surveyed cities around the country to assess the impact of immigration and found no evidence that immigrants take jobs from native-born Americans, including the poor and unskilled. In some industries, employment of native-born Americans actually increases in areas where immigrants settle. "Economically, America benefits from immigration -- I don't think a serious economist in the country disputes that," says the report's editor, Harvard University economics professor Richard B. Freeman. "They produce more than they consume, and that benefits everyone."

Nowhere is this effect more evident than in southern Florida, where refugees from Cuba, El Salvador, and Nicaragua have transformed Miami from a sleepy resort town into a major international business center. By 1980, more than one-third of Miami's population was foreign born, an increase of 46% since 1970. As a group, the Cuban-Americans have become "entrepreneurs par excellence," creating 25,000 businesses in the past two decades, according to Robert Coords, president of Sun Bank/Miami, a leading middle-market lender in the Miami area. Before the great influx of refugees, Coords notes, Miami had one significant industry: resorts. Now, thanks largely to immigrant workers, capital, and entrepreneurship, new industries are flourishing.

Congress should keep this experience in mind as it ponders what to do about immigration from Hong Kong. If ever there were immigrants who could boost our economy, it is the people of that extraordinary city. Consider that Hong Kong, with a population of 5.6 million, has one business establishment for every 20 people -- a rate of entrepreneurship twice that of the United States. Its economy, moreover, is heavily industrialized. Indeed, Hong Kong has almost as many manufacturing jobs as Los Angeles County, America's top industrial center -- and L.A. has nearly 3 million more people. I challenge you to find an American manufacturer who could not use some of Hong Kong's expert machinists, assemblers, technicians, and industrial designers.

To be sure, there are humanitarian reasons for welcoming the citizens of Hong Kong to our shores. After all, they face the grim prospect of becoming citizens of the People's Republic of China in less than 10 years. But let's not talk about compassion here. Let's talk about America's self-interest. Let's talk about our declining industrial base, our trade deficit, our lack of international competitiveness. Many people -- including some of those who favor restrictive immigration policies -- propose that we solve these problems with national industrial policies, subsidies, and protectionist quotas. I submit that our own history offers a simpler, more efficient, and eminently more American solution: open the gates.

Last updated: Oct 1, 1989




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