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USA Today -June 27, 2000

Immigrants fill gap in open job market

CHICAGO - The snipers of Sarajevo in the war-torn former Yugoslavia had only just started targeting citizens when Nenad Princip decided to move to the United States.

Princip and his family left Sarajevo in 1992 before the fighting began in earnest and, after 18 months in Vienna, arrived in the United States at a time when America needed them as much as they needed America. The booming U.S. economy was in desperate need of new workers.

"There's no question that without immigrants, the U.S. economy would have overheated long ago," says Mark Zandi, chief economist at RFA Dismal Sciences in West Chester, Pa. "Without immigration, the Fed would have started raising rates back in 1997, and the expansion would have been over years ago."

Federal Reserve Chairman Alan Greenspan recently cited the nation's labor shortage as "the greatest threat" to the record-breaking economic expansion and called on Congress to find new ways to throw open the doors to immigration.

The current immigration wave is the largest in U.S. history. From 1991 to 2000, more than 9 million legal immigrants arrived, exceeding the previous record of 8.8 million set 90 years ago during the first great migration, according to INS figures.

The U.S. Immigration and Naturalization Service says that 700,000 individuals were admitted for legal permanent residence in fiscal year 1998, more than twice the number accepted annually in the 1970s. It's unclear how many illegal immigrants slipped into the workforce uncounted.

Today, most arrivals are coming from Latin America, Asia and southern and central Europe. Immigrants are believed to account for a quarter of the growth of the nation's labor force, according to INS figures.

Even so, with a national jobless rate of 4.1% in May, the latest wave of immigrants hasn't been enough. For more than a year, employers from hotel managers to factory foremen have been struggling to find enough bodies to fill vacancies and keep up with demand. Immigrants have provided a much-needed safety valve - taking jobs that might otherwise have gone wanting.

Key to the expansion

The Hyatt Regency Chicago began hiring Bosnians four years ago in connection with a humanitarian relief program. Faced with a chronic shortage of employees, the Bosnians became a boon as they recommended friends and family to the hotel for jobs.

"They turned out to be a great labor pool for us," says Matthew Adams, the hotel's general manager. "Whether you are the Hyatt Regency or McDonald's, finding any workers, much less good ones, is hard these days. Immigrants have been a big help."

Similarly, the meatpacking industry has faced shortages of workers at plants in the Midwest. In Perry, Iowa, near Des Moines, meatpacker IBP began recruiting Hispanic immigrants in the 1990s as workers grew scarce. Today, they make up more than half of the plant's 1,100 workers, according to Federal Reserve Bank figures.

"Immigration is playing a larger role in the expansion than most people realize," says Michael Moskow, president of the Federal Reserve Bank of Chicago, who has noticed the changing makeup of factory production lines in small Midwestern communities in his district.

"Job opportunities have attracted immigrants out of the traditional big cities," Moskow says. "We have big immigrant communities in Chicago, but they are showing up elsewhere too."

Consider NTN Driveshaft and a Costco office-equipment factory in Columbus, Ind., 40 miles south of Indianapolis. They have been hiring Hispanic immigrants to round out the ranks of their assembly line workers for several years after traditional recruiting efforts failed to lure enough workers.

"It was a huge problem," says Fred Armstrong, mayor of Columbus. "We had managed to get all these factories to set up in the city and then had trouble finding workers. If we hadn't had immigrants coming in, we might have lost some of these companies altogether."

The chronic labor shortage doesn't appear to be improving either. According to a Manpower survey of employers' hiring plans released last month, the appetite for employees is still growing. The "traditional labor supply is essentially exhausted," Manpower says.

Not only unskilled workers

Immigrants aren't just flipping burgers and busing tables. Instead they are filling in at factories and on production lines and becoming computer programmers and executives. Many have arrived with advanced degrees that, once they learn the language, they try to put to good use.

"You can't forget you have a degree," says Zumreta Kunosic, executive director of the Bosnian & Herzegovinian American Community Center in Chicago. "People arrive ready to take any job, but their minds are on doing what they love, what they studied to do."

The United States seems to attract people disproportionately from both extremes of the skill spectrum, according a report on immigration by the Federal Reserve Bank of Dallas released last week. The report found that most immigrants are either high school dropouts or likely to have at least a master's degrees - 12.5% compared with 10% for U.S.-born workers.

During the past eight years, more than 25,000 Bosnian refugees have settled in the Windy City - the largest concentration of Bosnian refugees in the USA, INS figures show. Most of them, about 18,000, live just blocks from Lake Michigan.

Drive down Chicago's Sheridan Road to Lawrence Avenue in the Edgewater and Rogers Park districts and you begin to see cars with Bosnia-Herzegovina stickers on the windshields and some storefront signs in Serbo-Croatian. The street conversations aren't in English. The food aromas are garlicky and warm.

Many Bosnians came to Chicago originally in search of free medical care. At the height of the Bosnian war, six area hospitals offered free medical care to casualties. Many came and stayed. (Bosnian refugees are given some public assistance, such as welfare and Medicaid, for two years and normally are allowed to apply for citizenship after five years.)

While the Edgewater community has always been home to new arrivals, the tide of Bosnians has been larger and more concentrated, and they have helped raise real estate values and local school test scores since their arrival eight years ago, according to city of Chicago figures.

Building new communities

The need to create something familiar in a strange land is one reason the new immigrants have been such a boon to U.S. cities and, contrary to conventional wisdom, aren't necessarily a drain on public coffers.

A study by the National Research Council estimates that tax payments from the average immigrant family exceed the cost of public services they use by $80,000 over two generations, including the original immigrant and his or her descendents. The cost of services slightly exceeds taxes paid by the original arrivals, but their children and grandchildren more than make up the difference, it said.

The biggest effort to date to assess how immigration has affected the U.S. economy was done for Congress by the National Academy of Sciences in 1997. It concluded that immigration provided a net benefit to the American economy of around $10 billion annually, a fraction of the $8 trillion economy.

The NAS study reckoned that competition from immigrants - mostly illegal - brought a 3% cut in wages of workers who had only a high school diploma. Mean earnings in the U.S. for immigrants in the 1990s were $24,317, vs. $34,705 for the entire labor force, according to a Rand Corp. study.

"People here have had to say goodbye to everything in their life, so they come here ready to work hard and start over," Kunosic says. "This isn't a temporary place for them, so they buy homes, build businesses and try to get good jobs."

In southwestern Detroit, for example, immigrants are credited with revitalizing a burned-out community near West Vernon Avenue. New immigrant-owned businesses are transforming the neighborhood, according to a draft report on the effects of immigration on the U.S. heartland by the Illinois Coalition for Immigrant and Refugee Rights.

Similarly, Cherokee Street in south St. Louis was crime-ridden a few years ago. It has since been transformed by Mexican immigrant businesses, the report and city officials say.

Immigration politics

Such reports have managed to change the tenor of the debate over immigration and given a boost to an unlikely coalition of businesses and immigrant rights groups in Washington.

Later this summer, Congress is expected to pass legislation that would nearly double, to 200,000, the number of the so-called H1-B visas issued to workers with specialty occupations."

If it passes, the bill would be the largest guest worker measure since 1942, when millions of Mexican farm workers were permitted to come to this country. (That program was eventually disbanded in 1964 because it put Mexican workers into virtual servitude.)

Immigrant rights groups are also pressing lawmakers to lift federal rules put in place in 1996 aimed at, among other things, barring immigrants from government benefits and automatically deporting felons.

Other groups are pushing for Congress to grant legal status to about 300,000 arrivals from El Salvador, Guatemala, Haiti and Honduras who have been denied refugee status.

What if the economy slows?

All this is well and good while the economy is going great guns, but critics wonder what will happen to the labor force when it slows and there is a glut of workers chasing fewer jobs.

In Dubuque, Iowa, Bosnian workers are already hit by that challenge. More than 100 refugees from Bosnia-Herzegovina face job losses in the wake of an announcement last week by Farmland Industries that it will lay off up to 1,100 workers to retool its Dubuque factory.

Nenad Princip says many immigrants have been savvy enough to know plentiful jobs at the economy's lower rungs wouldn't last forever, so they have been training. He is director of the 2-year-old New Beginnings program at Loyola University in Chicago which aims to prepare immigrants to leap into the middle class.

"What I tell people when they first arrive is that it is easy to find a job for the minimum wage, but if they are willing to study, they can make $60,000 a year as a computer programmer," said Princip. "It is not a hard sell."

Princip is making his pitch to such immigrants as Sevala Sadich, 38, who arrived from Gorazde, southwest of Sarajevo, four years ago. She works at a LifeFitness store during the day as an office manager and attends Loyola at night to earn credits for a bachelor's degree in marketing and international business. Next year, she will move on to computer training, she says.

"We all went through a lot to get here and we certainly didn't arrive to live off the handouts of others," she said. "Welfare is for old people, and sick people, not for people like us. We're trying to be part of the middle class, part of the regular society."