Immigration Breeds Income Inequality

President Obama and the left rail against income inequality. Yet they invariably champion one of the biggest causes of that phenomenon: mass immigration.

It doesn’t take a rocket scientist to grasp that when rich countries accept massive inflows of poor and uneducated migrants who can’t speak the host country’s language, the gap between the rich and poor widens in those countries. The newcomers’ earnings potential is far below that of the native population, and often remains that way for generations to come.

Not that there’s anything wrong with income inequality as long as the poor and middle class get richer even as the rich get richer. It’s mainly the envious among us who have a hard time with that.

Northern Europeans pride themselves on their relative income equality — and often find fault with America for not accomplishing the same. But the massive influx of immigrants into Europe from the Middle East and Africa is upending that state of affairs.

Sweden is a case in point. Beginning in the 1970s it started taking in immigrants mainly from poor countries, and nowadays accepts more immigrants than other European countries many times its population size. Sweden’s foreign-born population is now about 15 percent of the population; including those born to two-immigrant parents it’s 20 percent.

While Sweden has been and still is among the most income-equal of all European countries, its rise in inequality between 1985 and the early 2010s was the sharpest in the developed world, according to a report by the Organization for Economic Co-operation and Development. Immigration fueled that.

In the 1990s the average income in Sweden of the top 10 percent was about four times greater than that of the bottom 10 percent. By 2007 that gap had risen to 5.75 times greater, and in 2012 the multiple was 6.3. According to The Economist, 40 percent of non-Europeans in Sweden are classified as poor, compared with 10 percent of native Swedes.

A 2014 study by researchers at the University of Gothenburg found that poverty in Sweden among ethnic Turkish children is three times higher than among native Swedish children.

Ethnic Turks are less educated and frequently can’t learn fluent Swedish. What education they do have is often not transferable to the Swedish labor market, which requires increasingly higher skills.

One may posit that the income inequality is a short-term phenomenon – that over the long term second-generation immigrants and their offspring will become more integrated and better educated.

That’s not what has happened in Germany. Turkish immigrants started settling in that country in the early 1960s as part of a guest worker program. Now ethnic Turks comprise 3.7 percent of Germany’s population.

A half-century after their arrival, as a whole they earn less, are less educated, suffer higher unemployment, and have much higher welfare dependency compared with native-born Germans.

Even more significantly, according to a 2010 study, not first but second-generation Turkish immigrants have a higher propensity to be welfare dependent than native Germans.

The Turks’ experience in Germany suggests that Europe’s current large influx of Middle Eastern and North African immigrants will expand the low-income and welfare-dependent population of Germany and other European nations, thus worsening income inequality both in the short and long term.

Of course, not all of the immigrants are or will remain low-income. A portion of them and/or second-generation immigrants eventually will join the ranks of the professional and high-income groups.

In fact, mass immigration often results in more people on the higher end in addition to more people on the lower end of the income spectrum. Certain immigrant groups are sometimes considerably more economically successful than other such groups — and more so than the established population.

In the United States, the highest income group is now Asian-Americans, and Indian-Americans in particular with a median household income of $86,135 as of 2010. Mexican-Americans’ median household income is less than half that.

The difference may not be so much a function of culture, but of proximity to the U.S. – it’s a lot easier for poor Mexicans to make the trek to America than it is for poor Indians.

While mass immigration into a wealthy country often exacerbates inequality within that country, it reduces inequality from a world perspective. Immigrants may be classified as low-income in their new countries, but their incomes typically are a lot higher than what they were in their country of origin.

The United Nations Development Programme estimated that migrants moving from developing to developed countries enjoy a 15-fold increase in income on average.

But leftists are almost always referring to income inequality within a specific country, such as President Obama when he bemoans U.S. inequality.

He can rail against inequality, and he can rail against efforts to curb legal and/or illegal immigration, but he can’t rail against both and still be taken seriously.

Patrick D. Chisholm is a writer and editor whose articles have appeared in many publications including The Washington Post, The Wall Street Journal, USA Today, Baltimore Sun, San Francisco Chronicle, National Review, and Christian Science Monitor. Previously he worked for financial and business publications, and in the State Department's Office of Mexican Affairs. For more of his reports, Go Here Now.