Author: Christopher Caldwell

Immigration and Inequality

A big problem with the mass immigration that began in the United States in the 1970s was that it bred inequality. Its role in creating the highly stratified American social structure of the twenty-first century was as significant as that of other factors more commonly blamed: information technology, world trade, tax cuts. In 1995, the economist George Borjas, writing in the Journal of Economic Perspectives, modeled the actual effects of immigration on Americans. He found that while immigration might have caused an increase in economic activity of $2.1 trillion, virtually all of those gains—98 percent—went to the immigrants themselves. When economists talk about “gains” from immigration to the receiving country, they are talking about the remaining 2 percent—about $50 billion. This $50 billion “surplus” disguises an extraordinary transfer of income and wealth: Native capitalists gain $566 billion. Native workers lose $516 billion. One way of describing mass immigration is as a verdict on the pay structure that had arisen in the West by the 1970s: on trade unions, prevailing-wage laws, defined-benefit pension plans, long vacations, …