1. Poverty among immigrants
2. Effect of migration restrictions on global poverty
3. Effect of migration on native poverty
Immigrant families, and even their descendants, are in general more at risk of being poor. In the U.S., first-generation immigrants and their families, who are one-sixth of the U.S. population, comprise one-fourth of all poor persons in the U.S. Minor children of first-generation immigrants comprise 26 percent of poor children in the U.S.
One obvious cause is the relatively lower education and skill level of many migrants (see here). However, we see, at least in the U.S., that poverty rates of immigrants fall faster than for natives, and that’s a hopeful sign:
Immigrant poverty is a temporary phenomenon. There are about 20 million adult U.S.-born children of immigrants, and poverty rates among second generation immigrants are much lower than among first generation immigrants. In fact, second generation immigrants are just as well off, if not better off, than the average native American.
(source, data for the US)
The fact that immigrants are relatively poor is, of course, no reason to deport them or to restrict immigration. Immigrants are even poorer in their countries of origin, otherwise they wouldn’t choose a life of relative poverty – or relative wealth as they see it – in another country. Deporting them or limiting immigration makes poverty worse. Immigrants, although relatively poor compared to the population in their destination country, have in absolute terms improved their lot by migrating. However, this fact shouldn’t make us complacent about their real and often distressing poverty levels in their destination country.
It’s intuitively obvious: if you allow more people to migrate to wealthy countries, global poverty rates will come down because people will have more and better labor opportunities. Conversely, immigration restrictions keep poverty levels high. Here‘s a paper that actually tries to measure the effect on poverty of migration restrictions:
[R]ich nation migration barriers impose huge losses on the global economy. This paper … estimates, for the first time to my knowledge, the global poverty implications of those barriers and finds that freeing migration into rich nations would reduce global poverty by at least 40% and as much as 66%. This corroborates the conclusions drawn by others that opening rich nations to freer migration may do more to reduce poverty around the world than any other policy.
Another study finds similar results:
[O]pen borders could yield huge welfare gains: more than $10,000 a year for a randomly selected worker from a less-developed country (including nonmigrants). Another is that these gains are associated with a relatively small reduction in the real wage in developed countries.
How about the supposed downward pressure of immigration on the incomes of native workers? There’s some data showing that immigration doesn’t push down low-skilled wages. Take a look at this graph:
This chart tracks the average median hourly wage for high school drop outs - the very subgroup that immigrations most pressures – in a variety of states. If, as some claim, high levels of immigration exert relentless downward pressure on unskilled native wages, you’d expect states with large immigrant populations to exhibit very low wages for unskilled workers. That doesn’t appear to be the case. … [E]ven George Borjas, the economist most often used by restrictionists, estimates that under realistic assumptions, the drag immigrants exert on native, unskilled wages is about 4 percent. Given the universe of things screwing over the working man, immigration just ain’t that large a player. (source)
And here are some other data confirming that the effect of immigration on the wages of low-skilled workers is negligible:
California may seem the best place to study the impact of illegal immigration on the prospects of American workers. Hordes of immigrants rushed into the state in the last 25 years, competing for jobs with the least educated among the native population. The wages of high school dropouts in California fell 17 percent from 1980 to 2004. But before concluding that immigrants are undercutting the wages of the least fortunate Americans, perhaps one should consider Ohio. Unlike California, Ohio remains mostly free of illegal immigrants. And what happened to the wages of Ohio’s high school dropouts from 1980 to 2004? They fell 31 percent. (source)