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Americans have long worried about competing with immigrant labor and have been suspicious of immigrants’ cultures and customs. The 1882 Chinese Exclusion Act banned skilled and unskilled Chinese laborers from entering the country for 10 years. The law was extended in 1892 and made permanent in 1902.
In 1882, U.S. Sen. James Slater, a Democrat from Oregon, argued: “We who are pressing this bill understand it to be a bill in the interest of labor. We understand it to be a measure to protect labor, to keep him from being ground down by the capitalists by employing Chinese labor so cheaply that the white man, or the American citizen, if you prefer the term, is unable to live at the prices for which these immigrants will work.” Many, including Missouri’s Democratic Sen. George Vest, made disparaging comments about the immigrants: “There is not an American instinct among them. … They come among us and are a fungi upon our body politic.”
As is the case today, others had more liberal sentiments. Massachusetts’ Republican Sen. Henry Dawes said, “I do not know any particular difference between Asiatic labor and European labor; it is labor, and it never occurred to me that the difference between men was the difference in the places where they were born. I always supposed it was a difference in the character of men.”
In a recent NBER working paper, “The Impact of the Chinese Exclusion Act on the Economic Development of the Western U.S.,” the authors find that the Chinese Exclusion Acts did reduce the number of Chinese living and working in the United States. Many of the immigrants either went back to China or migrated to other countries, such as Mexico. However, fewer Chinese workers did not increase the employment of white and U.S.-born workers. Instead, the reduction in Chinese workers led to reduced economic growth in the Western United States until at least 1940. White and U.S.-born workers, the intended beneficiaries of the act, were, on average, not made better off.
One reason many American workers were worse off was because Chinese labor filled market niches that made American workers more productive. Chinese labor was what economists call complementary to U.S. labor. For example, the Chinese worked disproportionately in sectors such as transportation, mining and personal services, and they were not fully replaced when they left.
Yet again, a policy’s actual consequences differ from its stated goals.•
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Bohanon and Horowitz are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.
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