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What's the value of immigration?

By David Frum, CNN Contributor
  • Senate failed to move ahead on DREAM act
  • David Frum says basic questions should be asked about immigration
  • He says it confers few benefits since U.S. lacks a labor shortage
  • Immigration doesn't contribute strongly to economic growth, he says

Editor's note: David Frum writes a weekly column for A special assistant to President George W. Bush from 2001 to 2002, he is the author of six books, including "Comeback: Conservatism That Can Win Again," and is the editor of FrumForum.

Washington (CNN) -- Senators are a lot like college students. For months on end, they seem to do no work at all. And then everything gets crammed into the last weekend of the term.

This past weekend, the Senate finished off a huge pile of work at once. Among the items voted on: The DREAM act, a form of amnesty for illegal aliens who entered the country as young children and attended college or served two years in the military. DREAM lost when it failed to clear a filibuster.

The defeat of DREAM follows on the defeat of the McCain-Kennedy "pathway to citizenship" legislation of 2007. Two defeats of two major bills within three years -- that begins to look like a message.

Congress will have to return to the drawing board on immigration. And it should start with this question: What is immigration for? What are we trying to accomplish?

A century ago, the answer seemed obvious. Factories and mines clamored for workers as an underpopulated continent beckoned settlers.

America in the 21st century, however, does not suffer from a generalized labor shortage. If labor were scarce, you'd expect wages to rise. Instead, wages were stagnating even before the recession hit in 2008. The typical hourly job in this country paid no higher wage in 2008 (adjusting for inflation) than in 1974. Add the value of fringe benefits, and you get a 37% increase since 1978.

Nor is 21st-century America underpopulated. While vast parts of the United States remain empty, the areas that attract immigration are as densely populated as Europe. In fact, New Jersey has a higher population density than any country in Europe except the Netherlands.

So why import almost a million people a year legally, plus nearly the same illegally? That's a question that usually goes not only unanswered but unasked.

DREAM invited Americans to tidy up some of the messy consequences of this mass migration. But whether you favored DREAM or opposed it, the question we need to ask now at this time of high and prolonged unemployment is: Why mass migration at all?

You often hear it said that the U.S. needs to create 150,000 jobs a month just to keep pace with population growth. What's seldom mentioned is that almost all of America's net population growth is driven by immigration.

Of course immigration also creates jobs, too. There are benefits as well as costs. In 2007, the President's Council of Economic Advisers tried to balance these gains and losses. They totaled all the gains, subtracted the losses and concluded that our present immigration conferred a net benefit of ... hold your excitement ... somewhere between 0.22% of national income and 0.60% of national income..

(And as economist George Borjas notes, the CEA could reach the higher end number, 0.6%, only by ignoring the economic harm done by new immigration to the immediately prior immigrants.)

Given the immense scale of the immigration we receive, it seems incredible that immigration yields so small a net benefit.

Yet the CEA's estimate tallies with previous work by the National Academy of Sciences back in the 1990s. Their work supported the low-end estimate of a net benefit from immigration of about one quarter of 1% of national income.

That seems a poor payoff for the disruption caused by mass migration. Imagine if your kid's classroom went from zero non-English-speakers to 10 in just a couple of years. Then you are told that this turmoil is adding just fractions of a penny to the national income? Surely you'd ask: Why are we doing this?

It does not have to be this way. If we chose our immigrants differently, immigration would upgrade the average skill level of the U.S. population. (As is, 31% of immigrants have not completed high school.) If we chose our immigrants differently, they could contribute more in taxes than they require in benefits. (As is, immigrants are 50% more likely to be poor than the native-born.)

Back in the 1950s and 1960s, immigrants arrived with higher skills and soon gained higher incomes than the native born. That's how immigration still works in Canada and Australia. Their immigration systems are race-neutral and favor prospective immigrants who arrive with language skills, advanced degrees or capital to invest.

Someday, the United States will probably have to double back and do something for the hard cases showcased in the Senate hearings on the DREAM bill. But if we really want to do something useful, we should do more than help the hard cases. We should ask some hard questions.

The opinions expressed in this commentary are solely those of David Frum.