The Bottom 10 Performing Immigrant Groups in the US – Lessons Learned

In my last post, I looked at the top ten immigrant groups by country of origin to the US, ranked by their per capita income in the US. In this post, I want to look at the bottom ten countries. Here’s some information on those countries (data sources mentioned at the bottom of the post):

Post 3, Figure 1 - Bottom 10 Countries by Immigrant Income - Corrected
(click to embiggen)
(note – this is a corrected table. Thanks to reader Mike B for pointing out the error in the last column of the table.)

The first thing to note is that Saudi Arabia is an outlier. Based on median age, education, and income, the composite Saudi immigrant described by this table is either a graduate student, a layabout, or something in between. Many Saudis may be receiving income from sources that are not accounted for in this table; from my limited experience, Saudi expats I have come across seem to receive a stipend, which is born out from other sources, though it seems those stipends are getting cut due to falling oil prices.

Leaving aside the Saudis, these groups of immigrants all have a per capita income in the US that exceeds their home country’s GDP per capita. Think of that as a rough measure of the difference between the benefits generated by the institutions and capital created by Americans and the benefits generated by the institutions and capital created by their former compatriots.

However, a not-insignificant part of that income comes in the form of transfers from the US taxpayer. For instance, each of these immigrants groups (except the Nepalese) receive cash transfers and food stamps at rates far in excess the native born population. For example, fully two thirds of Somali immigrants in the US are on food stamps compared to 12.7% of the native born population. Many members of these groups also speak poor English. This includes people who have lived in the country for a long time.

In comments to an earlier post in this series, Run75441 recommended this essay on US demographics by Joel Garreau. I was struck by this passage:

This is crucial to everyone who plans to retire, because once you do, you’ll want a bunch of young, hardworking, tax-paying people supporting you, whether directly, through family contributions, or indirectly, through Social Security or pension programs. Unless you’re rich enough to live off your investments, there is no alternative. As it happens, retirement is on the minds of many, and not just in the United States.

Based on the table above, it is clear that if the goal of our immigration process is to alleviate the problem Garreau identified, we are simply not doing it right. With few exceptions, people who maintain a dependence on food stamps are not likely to generate a surplus for the Social Security Trust Fund over their lifetime. For immigration to be a fix for our retirement program, we need to increase the likelihood that immigrants to the country will be productive and contribute to the institutions that we have collectively built. This can be done either by being more selective about immigrants and/or by finding ways to ensure that the immigrants that are here become, on average, more productive.

Identifying characteristics of immigrants who succeed in America will be the topic of the next post in this series.

Notes…

Data used in this post comes from two sources. The first is GDP per capita, by country, obtained from the World Bank. The post also uses information obtained from the Census Department’s 2014 American Community Survey. In particular, the post uses the 2014 per capita income of immigrants to the US by nation of origin. It also uses the percentage of the immigrants from a given country that have arrived in the US prior to the year 2000. That data is kind of unwieldy to find, but the starting point is here. To be clear, immigrants in this source are foreign born, which is to say first generation only. Only immigrants alive at the time of the survey are included.

As always, if you want my data, drop me a line at my first name (mike) dot my last name (kimel – that’s with one m, not two) at gmail dot com. Occasionally I get data requests six or seven years after a post. While I always try to comply with these requests, I reserve the right to change computers, have them stolen, or to drop dead if too much time has elapsed between this writing and a request for data occurs.

Recent previous posts on this topic:
Economic Outcomes of Immigrants v. Stay at Home

How Does Diversity Affect Economic Growth? A Look at Data on Immigration, Tax Rates and Real GDP per Capita

The top ten immigrant groups by country of origin to the US, ranked by their per capita income in the US.

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