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Just a few years ago, the California economy was in a deeprecession and immigrants were being blamed. Today, the economic outlook is brighter than ever before, and a think tank is givingimmigrants some of the credit. A new report from the Center for the New West says that small technology ­intensive companies and a large reservoir of immigrants led California out of the economic wilderness.

The author, of this report is Pepperdine University Fellow Joel Kotkin, whose 1993 book Tribes looked at how ethnic communities are transforming the global economy. Kotkin maintains that immigrants are central to California’s past, present, and future success. His reports point out that one-third of Silicon Valley’s engineers are Asian, Hispanics in Los Angeles are creating businesses three times faster than their population growth rate, and six out of the 15 largest industrial companies in Orange County are run by first generation immigrants.   

 Kotkin spoke to me at length on the role of immigrants in  America and other issues by phone from his offices in Los Angeles.

Your recent report, “California: A Twenty-First Century Perspective” is bullish about the prospects of the Golden State. What makes you say California is really on the comeback trail?

A remarkable economic recovery has been going on in California, and very few people anticipated it. This is not a cyclical change, but a structural change. The econ­omy has adjusted to the loss of defense and financial services jobs, and more than compensated for them in high technology, enter­tainment, and textiles. These industries were growing all through the recession, and now have become visible.

You assert that immigrants have played a leading role in the rebound of the California economy. What is your rationale behind this?

The structural change happened in indus­tries where immigrants play a critical role–­computers, garments, as well as light manufacturing. They also have a significant role in the entertainment industry.

Immigrants almost by nature are not part of the middle management bureaucracies or the defense industry. These people are on the cutting edge.

There is considerable voter sentiment behind the anti-immigrant legislation such as Prop. 187 in Calif. What do you attribute this attitude to?             

Some of this has to be taken with a gram of salt. For example, in Arizona, which has a large immigrant population, only 10 percent of the voters in recent Republican primaries considered immigration a major issue. Re­garding Prop. 187, [California Governor Pete] Wilson cleverly exploited the issue. The opposition, the liberals, overstated their case by portraying immigrants as hopeless victims who need special protection and rights. No case has been made about the benefits to the U.S. as a whole.

There are those who  assert that America is already crowded–look at the freeways of Los Angeles­—and that it is time to say enough to more people. Aren’t there limits? Are Americans suffering from immigration fatigue?

The reality is that most major cities–Los Angeles, New York, Chicago–would be de­populated without immigrants. They would become like Detroit. The birth rates of the native born population are dropping precipi­tously. It is key to note that because of immi­gration, we can avoid the aging that is happening in Europe and, to some extent, Japan, where an increasingly smaller group of workers is supporting the aged.

You suggest that a number of industries, such as high-tech, would be hurt if there were less immigration. Is there any correlation between immigra­tion and economic growth? Wouldn’t most of tile growth have happened regardless?

I am loath to make such causal relation­ships because there are many factors. But you clearly need entrepreneurship as well as immigrants. For example, Canada has immi­grants, but they are not very entrepreneurial. The rate of self-employment is much higher for Latinos in California than in New York. San Diego is an example where I think immi­gration, entrepreneurship, and the lack of all established structure oriented to heavy indus­try (unions etc.) will cause rapid growth.

America Firsters claim that immigrants financially burden American taxpayers by over-using welfare and other benefits. Comments? 

If you take out refugees, that is not true (refugees can get AFDC). Compare that to the Latinos-theil’ use of welfare is below the average. They are indeed burdening the school and health systems, but they pay their way through taxes, and their labor participa­tion rates are higher.

The current system of immigration provides prefer­ences to family members of immigrants. Are family reunification provisions important?

I differ with many immigration advocates on this issue. We need young, able-bodied hardworking people with skills. How do we keep the Indian computer engineer or the East European with industrial crafts skills, rather than someone who is given preference for the sake of family reunification?

Is “illegal immigrant” a code word for “non-white immigrant”? 1s the current backlash against immi­grants primarily a reaction to the increasing num­ber of non-whites coming in? Is affirmative action linked to the immigration issue?

I don’t think so. I for one support the California Civil Rights Initiative (CCRI). Mixing racial quotas with immigration issues is a disaster, a particular disaster for the most upwardly mobile immigrants. The affirmative action issue confuses the whole picture, and it may even be unconstitutional.

You refer to the assertion that California is becoming a Third World state. Someone even said that Los Angeles is the capital of the entire Third World.

This is a myth perpetrated by the East Coast media moguls. It’s funny how they say immigration in New York is good but is a disaster in California. The myopia and arrogance of the Eastern media never ceases to amaze me—they are like the British Empire. But media will move where there is technological dynamism, and I am beginning to see that shift. Rather than California, I see the East Coast in a long term secular decline.

Some say that businesses encourage the flight of jobs overseas to low-cost countries. Is a “free market” in labor hurting American employees? Don’t immigrants take jobs away from native Americans?

The evidence for such a claim is sketchy. For example, David Lam, the founder of Lam Research, created 4,000 jobs. Immigrants are even creating new industries such as the garment industry—­mostly Asians, East Europeans, and Lati­nos work in them. Immigrants bring new works, skills, and visions, and change so­ciety, often for the better—for example, the family values that the Indians bring. I think some of the most courageous people are those who run 7-11s and motels in tough neighborhoods. If the Indian immigrant had not come to that area, such a service would simply not be available.

On the other hand, immigrants often feel that they are “techno-coolies,” i.e, they are merely hired labor with no prospects.

I don’t think so. In any case, Indians are less that way because of their facility with English and because they are more aggressive in interpersonal relationships. Many are even moving into sales and marketing jobs.

Business recently forced Senator Alan Simpson to water down his bill to reduce immigration. He had to remove provisions that would have penalized businesses with a $10,000 fee per immigrant employee. What’s your take on this?  

This primarily shows the power of the high-tech community over the Republicans in Congress. High-tech executives are now waking up to the fact that they can exert quite a bit of pressure to get things done to their benefit.

Your very interesting 1993 book, Tribes, talked about transnational groupings of people who shared ethnic/religious/cultural bonds, which made them an economic power as industries globalized. Do you still see that as a valid model?

Absolutely. People are increasingly catching up with this model, especially as they see the rise of China. When I started talking about the power of the Chinese diaspora 10 years ago, I got plenty of blank looks. Now I talk about Indians and get blank looks.

The “tribes” you considered were the Anglo-Americans, the Jews, the Japanese, the Chinese, and the Indians. From the Indian perspective, it does not appear that we have made much of an impact, compared for instance to the estimated $1 trillion controlled by overseas Chinese.

Chinese are far better positioned, as their diaspora numbers 50 million. Indians are much fewer, perhaps 20 million. China is a much ore rapidly growing power. India has the potential to get there because of its diaspora’s sophistication. This whole thing is cyclical; a lot of people think it is inevitable that Europeans will always dominate the world. That is patently absurd.

There are very few Indian multinationals, or even large business houses that have any visibility outside India. Why?

But you cannot expect conformity—Every group will express itself in different ways. Indians are becoming important in high positions in bureaucracies, e.g, the head of Fingerhut, or of McKinsey. Indians are in places where you see no other Asians— Sonny Mehta in publishing, others in the record industry. Maybe there is a different evolution there.

The flow of immigrants to the U.S. from such rapidly advancing nations as South Korea and Taiwan has been reversed. Do you see that happening for India?  

This is one of those “man-bites-dog” stories. It’s big news when anyone returns to their home countries. But people on average are not going back. They may go back to their home countries, for example, in their 30s when they get a good opportunity, and wish to look after their parents or something like that. But they will come back because of the cost of living, the lifestyle, and the weather. Have you ever been to Taipei? It’s horribly crowded, polluted, and expensive.

Indians in the diaspora have encountered severe discrimination, for example, in East Africa and the U.K. Should we fear such a future in the U.S.?  

There will always be isolated inci­dents of these things. There will not be any systematic discrimination in the U.S. But Indians, Jews, and Chinese should be vigilant—they should not allow racial preferences to be criteria for college admissions, etc. Since they will generally outperform the norm, they will suffer if racial preference is perpetuated.

There have been some suggestions that even naturalized, legal U.S. citizens should be denied benefits such as Pell grants for college. Do you see the U.S. tightening down severely on immigration?

That’s ridiculous. Constitutionally there will be problems. There is more risk for green card holders—I urge them to become citi­zens. All immigrants need to register to vote and to participate. It sends a poor signal oth­erwise. In the U.S., you have to wrap yourself in the American flag to be taken seriously on any issue, For example, the opponents of Prop. 187 did themselves tremendous harm by showing Mexican immigrants waving little Mexican flags.

The U.S. has seen periodic outbreaks of isolationism and nativism. Do you believe that we are moving to an era of Fortress America that hunkers down behind protectionist barriers?

Unfortunately, there is a strong tendency in that direction. This is endemic, and extends beyond right and left and beyond regional differences. Even blacks dislike the immigrants. There is what I call the “Valhalla syndrome” — Buchnan and Clinton have touched on this—it is some hankering after a glorious past that never was.

Every political persuasion has its own interest in touching off this sentiment. It is a mid-life crisis for America.