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Immigration: The Economic Consensus

At Marginal Revolution, Alex Tabarrok has posted the text of an open letter summarizing the economic consensus on immigration. If Gregory Mankiw, Vernon Smith, Tyler Cowen, and Brad DeLong agree, it's worth taking to heart.

JunkYardLawDog (mail):
Alex Tabarrok states many opinions or conclusions all in favor of "immigration" or supposedly from an analysis of "immigration" in USA history. None are supported that I saw or referenced to support. At least half of what was written in his "letter" was just his opinion of what "immigration" policy he wanted the USA to use.

One LARGE problem with his "analysis" conclusions, if you can call them that, is that he analyzes or comments upon past LEGAL immigration and then extrapolates that the orders of magnitude larger ILLEGAL immigration that is the real subject of debate.

His entire letter confuses (likely deliberately) LEGAL IMMIGRATION with ILLEGAL INVASION OF IMMIGRANTS.

The link seemed much more like deception and propaganda than any kind of economic analysis.

The commenters on Gregory Mankiw's site asked some excellent questions about this call for open borders and the voluntary abandonement of our country and system of laws.

Tabarrok argues LEGAL immigration is good for the country so why worry about enforcing our laws that apply to ILLEGAL invasion. The NSA surveillance and phone log databases are good for the country as well. So why worry about enforcing laws?

Says the "Dog"
5.17.2006 10:33pm
Steve:
Right, by failing to refer to ILLEGAL INVASION OF IMMIGRANTS the letter sounds like propaganda. Black is white.
5.17.2006 10:37pm
jgshapiro (mail):
Here is the money paragraph:

Immigration in recent decades of low-skilled workers may have lowered the wages of domestic low-skilled workers, but the effect is likely to be small, with estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.

I don't know where they get the support for that assertion (i.e., 0-8%). Common sense tells you that in the absence of the pool of illegal immigrants (or guest workers), wages would have to rise for unskilled American workers to take these jobs, many of which are back-breaking and not all that attractive. Someone has to do these jobs and the wage will rise to the point where employers can attract enough workers to do them. But because of the pool of illegal/guest workers from abroad who will work at almost any price and under almost any conditions, employers have no incentive to pay more or improve working conditions.

It may be that the gains in lower prices for the rest of us outstrip the aggregate loss in wages for the segment of society that is affected by a guest worker plan (or by lack of enforcement of laws respecting the hiring of illegals). But if that is the choice we are making, don't we have a moral obligation (out of basic fairness) to compensate the would-be American workers who are adversely affected by this plan with some sort of benefit?

The problem with the guest worker program is not just that it rewards, or even incents, criminal behavior. It also gives a benefit to people who least need it (large farms, rich people looking for cleaning help) at the expense of Americans who are living at the margins of poverty.
5.17.2006 10:38pm
David M. Nieporent (www):
I don't know where they get the support for that assertion (i.e., 0-8%). Common sense tells you that in the absence of the pool of illegal immigrants (or guest workers), wages would have to rise for unskilled American workers to take these jobs, many of which are back-breaking and not all that attractive. Someone has to do these jobs and the wage will rise to the point where employers can attract enough workers to do them.
One error here is in saying "someone has to do these jobs." That isn't always the case.

To take one example of a profession where illegal immigrants are purportedly common, a homeowner can mow his own lawn; he doesn't need to pay someone to do it. He may do so, if the price is right, but if you enact policies to keep out illegal immigrants, the job may disappear rather than being filled by a higher-priced American worker.

In any case, "common sense" is a poor substitute for actual analysis.
5.17.2006 10:57pm
frankcross (mail):
The letter is based on research on economic effects. The research includes both legals and illegals. The number came from the fact that plenty of studies have shown very little effect on low wage jobs and the biggest effect was the one finding from Borjas at 8%.

There's a lot of rigorous economic empirical research here. Show me some comparable evidence to the contrary. Not nativist assertions
5.17.2006 11:05pm
JunkYardLawDog (mail):
Steve,

Its by failing to distinguish between LEGAL immigration in the past at 10% or LESS usually of our then current population with ILLEGAL INVASION OF IMMIGRANTS today representing 15% to 33% of our current population it makes his analysis, if you can call it that, unsound and propaganda.

Says the "Dog"
5.17.2006 11:07pm
kb (mail) (www):
The support for the 0-8% claim comes because immigrants work in different fields than native workers (and there seems to be some divide between fields in which legal and illegal immigrants work.) The Economist ran a nice summary of the debate with links to the actual research.
5.17.2006 11:08pm
logicnazi (mail) (www):
jgshapiro,


Common sense tells you that in the absence of the pool of illegal immigrants (or guest workers), wages would have to rise for unskilled American workers to take these jobs, many of which are back-breaking and not all that attractive. Someone has to do these jobs and the wage will rise to the point where employers can attract enough workers to do them. But because of the pool of illegal/guest workers from abroad who will work at almost any price and under almost any conditions, employers have no incentive to pay more or improve working conditions.


Economics is a very complicated subject and common sense can be a dangerous thing on which to base conclusions. Let me give you an explanation/scenario as to how illegal immigrants could actually raise the wage paid to low skilled US workers.

First of all there is a large pool of low skilled jobs that illegal immigrants don't compete for, or at least have a disadvantage competing for compared to US workers. These are things like clerks at large chain stores where both immigrations laws and english requirements give US citizens a benefit.

Now if we only utilize static economic analysis, the sort of thing conservatives are always dissing when it comes to the effect of lower taxes on government revenues you are right. However, the impact of a large number of illegal immigrants who pick fruit and do other temporary jobs cheaply is to make many products americans need to buy cheaper. This reduces the total amount of money americans need to spend on these products (increasing the real wage of all americans) and frees up more money for americans to spend on other things. This money then creates new jobs which can raise wages in jobs that americans have an economic edge at (for reasons above).

Clearly being able to make products more cheaply creates wealth. Now from Keynes we know that this excess wealth will be multiplied as it creates new jobs which in turn create more wealth and so on. Thus it is highly unlikely that the total impact on america from illegal immigrants is going to be to reduce our wealth. The only real concern is just that illegal immigration shifts wealth from one class (the poor) to another class so why not just fix this directly with progressive taxes and government benefits?

Moreover, I would argue that the economic benefits from illegal immigration is likely to exceed that from legal immigration since legal immigrants effectively get the benefits of minimum wage laws and are more likely to compete for better jobs instead of farm labour. This is why the right solution is a guest worker program that allows in people who don't get minimum wage benefits and have less access to social services.

Finally I think it is just kinda selfish to only think of the benefits to US citizens. The fact that someone is born in a foreign country makes their welfare no less important. I think the benefits for these immigrants is an important consideration lacking in this debate.
5.17.2006 11:09pm
JunkYardLawDog (mail):
Studies are a dime a dozen. Sort of like global warming studies. They give the answer people are willing to PAY MONEY to get.

Says the "Dog"
5.17.2006 11:09pm
logicnazi (mail) (www):

Sort of like global warming studies. They give the answer people are willing to PAY MONEY to get.


Really, so we should expect the scientific consensus to say that global warming isn't going to happen since this is what would make way more money and be the result the US government would prefer (they fund most of the studies in this area).

If you don't like the studies go learn the economics yourself but the idea that one can intuit what will happen in a large complex system like the economy without any training or economic exertise is absurd.

So fine doubt the studies if you want but it's absurd to pretend you know what the economy or the global climate will do without at least going through all the arguments, models and data in detail.
5.17.2006 11:12pm
Taimyoboi:
"This money then creates new jobs which can raise wages in jobs that americans have an economic edge at (for reasons above)."

And

"...so why not just fix this directly with progressive taxes and government benefits?"

Some sound economic analysis. Those Americans who could not compete for lower wages aren't benefiting from the lower prices since they didn't get the job. The ones who do benefit from are middle and upper class Americans.

But if you tax them, you've just thrown away the wealth creation that resulted from those lower prices and you don't get any of those additional benefits.
5.17.2006 11:23pm
jgshapiro (mail):
David:

I'll acknowledge that some jobs might disappear if there were no illegals allowed to do them. But that is because of the minimum wage, not because of a lack of people to do these jobs.

What keeps the homeowner from paying an American worker to mow his lawn is the fact that he has to pay the American worker minimum wage, but he can exploit the illegal worker and pay them much less than the minimum wage to do it. The illegal worker cannot complain, because if they do, they flag themselves as illegal and get deported.

You don't need a Phd in economics to understand what is happening here, and why. People and companies who do not want to pay the prevailing wage (even when it is minimum wage) are employing illegal aliens to get around it. By creating a guest worker program, we would be endorsing that policy, when we should be doing everything we can to stop it. If the minimum wage is a bad idea, we should just get rid of it, not employ undocumented workers as an end-run around it.

When unemployment is below 3%, it might be worth talking about a need for more workers; even then, however, I can't see why we would condone illegal immigration as opposed to increasing the number of people allowed to legally immigrate through the regular immigration process.
5.17.2006 11:25pm
Taimyoboi:
"...gains from immigration outweigh the losses."

This contradicts the findings from CIS.
5.17.2006 11:26pm
Taimyoboi:
"American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis."

Of course the American economy can create as many jobs as there are workers, but the caveat he neglected to mention was that this is true only if wages are allowed to approach zero.

Unless he is also advocating abolishing the minimum wage, then this is certainly not true.

A large part of the calculus that seems to be missing from this discussion of competition for wages between illegals and American workers is the cost of living for both. While I'm not certain, I would suspect that it is higher for Americans, and so even if they were willing to work at that wage, they are unable to.

For example, if an American worker is attempting to support himself and a spouse, or even kids, that would be far more costly than for an illegal who is supporting himself in the U.S., and a family in Mexico. A dollar earned here and spent here does not go as far as a dollar earned here and spent there.
5.17.2006 11:38pm
Freder Frederson (mail):
While this may be true for unskilled labor, what about traditionally semi-skilled and skilled labor? Meatpacking and the construction industries used to be good, middle class, union jobs that could support a family. Over the last twenty-five years they have become transient marginal jobs dominated by low-wage, largely undocumented labor (except where union construction labor has managed to hang on in some parts of the country). This has been nothisng but a calculated and organized process of union busting by agribusiness and the construction industry aided and abetted by the government which has ignored the flow of illegal immigrants and the illegal hiring and deliberate and illegal busting of unions.
5.17.2006 11:44pm
jgshapiro (mail):
logicnazi:


The only real concern is just that illegal immigration shifts wealth from one class (the poor) to another class so why not just fix this directly with progressive taxes and government benefits?

That is one major concern (there are others, such as the fairness of allowing illegals in while others wait in line to come legally), and I suggested as much in my first post (that we offset the cost to the poor unskilled American worker with benefits).

But we both know that is not going to happen. First of all, who would pay for it? The companies who gain revenue by paying lower wages? I doubt it. If Congress were willing to take them on, it would have forced more aggressive enforcement of hiring laws long before now. The consumers who get lower prices? Perhaps, but this means a new general tax, and you don't see anyone proposing it. Moreover, wouldn't the tax undermine the savings from lower prices?

This is why the right solution is a guest worker program that allows in people who don't get minimum wage benefits and have less access to social services.

Why not just let American workers opt out of the minimum wage?

Do you really believe the guest workers will have meaningfully less access to social services (apart from welfare)? They will still have access to medicaid-type health care, because we won't let them die of disease or injury. They will still have access to schools, because we won't want to create an underclass of uneducated youth. They will still have access to parks, roads, airports, police, firefighters, etc. -- all of the services that cost us money in taxes as citizens. What benefits will they not get?

Finally I think it is just kinda selfish to only think of the benefits to US citizens. The fact that someone is born in a foreign country makes their welfare no less important. I think the benefits for these immigrants is an important consideration lacking in this debate.

This is laughable.

Selfish is the reason we have ignored illegal immigration for so long: because we want to exploit workers who have no rights so that we get cheap fruit and don't have to pay employment taxes on our under-the-table nanny.

This statement also ignores the obvious distinction between legal immigration and illegal immigration.

In any case, we certainly do have an obligation to American citizens before any obligation to those born elsewhere. If that is selfish, than we are as selfish as every other nation on Earth. We give more in foreign aid than any other country and we accept more immigrants than anyone else, but come on. We do not have an obligation to share our resources with all 6 billion people on this planet and if we did so on a fair and equiable basis, there would be none left to distribute among those who pay taxes in.
5.17.2006 11:47pm
anonymous coward:
"...the idea that one can intuit what will happen in a large complex system like the economy without any training or economic exertise is absurd."

Sure, but I'm not sure training and expertise get you all that far either.

A few interesting comments at DeLong's site.
5.17.2006 11:49pm
lyarbrou (mail):
It appears that additional data about the costs of illegal immigration could lead to a more rational analysis and commentary.
For information on the economic consequences of illegal immigration see the following:

http://www.leg.state.mn.us/lrl/issues/immigration.asp

Report to Minnesota Governor Pawlenty by the Office of Strategic Planning and Results Management, MN Department of Adeministration entitled
"The Impact of Illegal immigration on Minnesota: costs and population trends"

North Carolina
"The Economic Impact of the Hispanic Population on the State of North Carolina" by Kasarda et al. from the Keenan Institute

http://www.heritage.org/Research/Immigration/wm1076.cfm
"Amnesty and continued low skill immigration will substantially raise welfare costs and poverty"
by Robert Rector

"Still dodging immigration's truths" in today's Washington Post by Robert Samuelson

lyarbrou
5.17.2006 11:59pm
Roger Schlafly (www):
I am going to distribute my own consensus letter:

Open letter on global warming

Overall, sunshine has been a net gain for American crops. It may have given some people sunburn, but the gains outweigh the losses.

America is a warm and friendly country and these qualities make America a beacon to the world. We should not let exaggerated fears dim that beacon.
5.18.2006 12:00am
Brooks Lyman (mail):
One has to wonder where this open letter is coming from. Frankly, what's the point?

Presumably, he's talking about legal immigrants - at least he doesn't use the word "illegal" anywhere. I would like to think, that most - probably the vast majority - of Americans have no problem with legal immigration. While I have no statistics to wave around, I would guess that the number of Americans who are against all immigration is a very small percentage.

Certainly Bush has said nothing against legal immigration; he may even want to increase it, and to figure out some way to get the current 12 million-odd illegals to become citizens - hopefully through some sort of citizenship and English language training.

If the potential negative effect (if any) of immigration on the income of the poorest segments of the economy is as small as the letter states, why is this of sufficient concern to justify an open letter to Bush telling him to do what he has stated he intends to do? As a socioeconomic paper, it makes sense (with all the data); as an ad in the papers or on TV (preferably media outlets that will be seen by the affected group), it makes sense. But as an open letter, unless it's all a scam in favor of ILLEGAL immigration, it makes no particular sense to me.
5.18.2006 12:17am
David Chesler (mail) (www):
Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.

One might just as usefully describe what happens if you first assume a spherical horse as to describe what happens when labor markets remain free, flexible and open to all and then attempt to extrapolate to the real world.


Freder says:
what about traditionally semi-skilled and skilled labor? Meatpacking and the construction industries used to be good, middle class, union jobs that could support a family. Over the last twenty-five years they have become transient marginal jobs dominated by low-wage, largely undocumented labor

What about software engineering? Supposedly there is such a shortage of American engineers that we have to import guest workers (H-1B) but I can name capable, educated, up-to-date software engineers who have been unemployed for 21 of the past 60 months or worse, or who have left the field all together.
5.18.2006 12:25am
Broncos:
Sorry to post this twice, but:

Although the legal/illegal distinction is a good starting point if you are in front of a judge, it seems a poor starting point if you are a legislator.

If the topic under consideration is *whether* something should be illegal, why is the fact that it is currently illegal dispositive? If the speed limit is currently 65 mph, and we are discussing whether it should be 80 mph, why is the fact that people who currently drive 80 mph are doing so illegally dispositive? If the law currently makes it a crime to consume alcohol if you are under 21, why should that illegality be dispositive on whether the age is 21?
5.18.2006 12:37am
Lev:
I wonder why they didn't mention the costs of family importation via anchor babies, or, costs to the hospital and education systems, especially along the border.

All things considered...this letter reminds me of the illogical incoherence of this one:

More Than 430 Law Professors Send Letter to Congress

and deserves about as much respect.
5.18.2006 12:51am
Lev:
Still Dodging Immigration's Truths By Robert J. Samuelson
5.18.2006 12:52am
A. Zarkov (mail):
"We must not forget that the gains to immigrants from coming to the United States are immense. Immigration is the greatest anti-poverty program ever devised."

It might be an anti-poverty program for the immigrants, but not for Americans. This letter minimizes the very real shadow costs associated with importing members of other countries under classes. The reader should careful note of the authors as some of them aspire to future policy making positions. Ask yourself: do you really want people who are inclined to put the interests of foreigners over that of Americans running and advising the US government?
5.18.2006 12:53am
JunkYardLawDog (mail):
Logicnazi, you are wrong. The people who dole out the money on Global Warming research already "know" what the results should be and the dole out grants and funding to those who will confirm that which they already know. Scientists who try to buck the orthodoxy on this not only have trouble getting funding, they have trouble getting published.

Global Warming is almost entirely the result of the SUN putting out more energy as opposed to man made causes. That's why both Mars and Jupiter have observed global warming trends, melting of ice, etc. over the past 5 years. Not a lot of SUV's on Mars and Jupiter.

Instead wasting all this money on ruining economies to adjust to things that aren't causing any warming we should be looking at ADAPTATION and instead of trying to solve something that will only be a problem in 100 years with today's technology solve it in 50 years with FUTURE technology.

Says the "Dog"
5.18.2006 12:54am
U.Va. 1L (mail):
Ask yourself: do you really want people who are inclined to put the interests of foreigners over that of Americans running and advising the US government?

Wasn't this the argument made against electing JFK president?
5.18.2006 12:58am
jgshapiro (mail):
If the topic under consideration is *whether* something should be illegal, why is the fact that it is currently illegal dispositive?

The topic under consideration is not just whether it should be legal, but whether people who are currently breaking the law should be allowed to take advantage of a new program, which is highly controversial in itself.

If the speed limit is currently 65 mph, and we are discussing whether it should be 80 mph, why is the fact that people who currently drive 80 mph are doing so illegally dispositive?

I'm nt sure sppeding is a good analogy here. Speeders aren't necessarily jumping the line in front of people who go the speed limit. Moreover, it is questionable as to whether they use up common resources (medical care?) that are properly reserved and paid for by those who drive the limit, or whether they are taking cars away from those who would drive the limit.

In any case, to try and use this analogy, the appropriate analogy is to the speeder who asks to be let out of his ticket for going 80 because the legislature is currently considering raising the speed from 65 to 80. How does that excuse the fact that the speeder was going 80 before the law changed? You have an obligation to obey the law unless and until it is changed. You cannot obey whatever law you think should be in effect on the ground that there are those who would like to change it in your favor.
5.18.2006 1:17am
A. Zarkov (mail):
"Wasn't this the argument made against electing JFK president?"

I'm not aware of any statements by JFK that would cause one to believe he put the interests of foreigners before Americans. The authors of the open letter are quite explicit about their attitude. So I don't know what you mean. Perhaps you are referring to the fears some people voiced about electing a Catholic president during the 1960 campaign. I don't know why that would be relevant here.
5.18.2006 1:48am
Ross Levatter (mail):
The claim of some on this list that they are in favor of LEGAL immigration but opposed to ILLEGAL immigration is either a sham argument, possibly because saying they don't want more Mexicans in "their" country no longer plays well, or is an example of fetishism on a legal blog.

When most of our ancestors came here, being a LEGAL immigrant meant getting off the boat, signing a piece of paper, and getting a job.

Now it means applying to a bureaucracy and waiting upwards of 2 decades for your name to reach the top of the list. Is that because no one wants to employ you for 2 decades? No, it's because the government that complains people are breaking the law is the same government that rigged the law.

To take it to the logical extreme, it would be absurd to say, "Well I support immigration, though of course only LEGAL immigration" if the US had passed laws saying only one lucky lottery winner was allowed to legally immigrate each year.

Talk of "them" taking away "our" jobs is such a mercantilistic (there are only a fixed number of jobs) and collectivistic ("we" have an ownership claim to jobs "we" create [read some Americans have an ownership claim to jobs other Americans create]) view of the economy it is hard to take seriously long enough to critique it.
5.18.2006 3:53am
Ross Levatter (mail):
Why is it after being around the Dog's posts, I feel like I have to wipe my shoes off?
5.18.2006 3:55am
Ken Hirsch (mail):
While economists are debating the costs and benefits of immigration, native-born citizens are leaving California.

During the 1990s, 1.5 million citizens (net) left California and the exodus is continuing. And immigrants are displacing previous residents in other states, too: "The four states -- New York, California, New Jersey and Illinois -- that lost the most domestic migrants to other states were also four of the six states where two-thirds of the nation's foreign-born reside. Altogether, between 1995 and 2000, those four states gained 2.7 million new arrivals from abroad even as they suffered a net loss of some 2 million residents to other states, with many earlier immigrants now joining the out-migration." (source)

Does Ross Levatter (above) think that this is just fine? That the new residents, whether they entered legally or illegally, have just as much right to California as the people who lived there before they were displaced? Is it okay if it happens to the rest of the country?
5.18.2006 4:33am
TLB (mail) (www):
Here's my response to the Open Letter.

In addition to the other failings of the letter that most people have pointed out, there's one that many probably won't notice:

The American dream is a reality for many immigrants who not only increase their own living standards but who also send billions of dollars of their money back to their families in their home countries—a form of truly effective foreign aid.

There are massive downsides to remittances (money sent home by immigrants). The fact that they either ignored or were ignorant of those downsides shows that they really have no clue about this issue.
5.18.2006 4:37am
A. Zarkov (mail):
Ross Levatter:

The claim of some on this list that they are in favor of LEGAL immigration but opposed to ILLEGAL immigration is either a sham argument, possibly because saying they don't want more Mexicans in "their" country no longer plays well, or is an example of fetishism on a legal blog.

We come to the crux is the argument here. Any distinction between legal and illegal immigration is a sham. If you believe this then most all countries in the world are making this same invidious distinction. Most countries in the world will punish you, and some quite severely if you enter their territory in an unauthorized manner. Why single out the US whose immigration policy is among the most liberal? Canada for example does not want to import uneducated and unskilled workers who won't speak the prevailing language. Canada does not want people who will become a public charge.

If you think most all the world's countries are wrong to control and limit immigration, then what you want is a world without borders, a really unrealistic expectation given the territorial nature of human beings as revealed by the history of civilization.

BTW when you put quotes around the word "their" I take this to mean you feel the idea of a sovereign nation that belongs to its citizens is a bogus concept. Or is it you think only the US is somehow an illegitimate country?
5.18.2006 4:38am
Midgely (mail) (www):
I think it should be noted that the remittances "debunking" noted above is actually even more superficial than the open letter, without the excuse of being a manifesto. Not a single fact is cited in the debunking, only a somewhat wild-eyed accusation that companies that use illegal immigrants are paying bribes to politicians.

In addition, the two "see also" references directly contravene, rather than support, the post's claims. This is Ward Churchill-style dishonesty. The OAS report, for example, states that in the Dominican Republic "remittances are the most consistent and largest source of dollars, without which the peso would probably be less stable, imports would have to be reduced, and there would likely be a large balance of trade deficit." Furthermore, "Statistical analysis finds that each $1 remitted to Mexico produces an increase of $2.90 in the GDP and an increase of $3.20 in economic output, which leads to an increase in national income and production of billions of dollars each year (Durand, et al. 1996a)." The OAS report does admit that remittances are not enough of a spark to make emigration unnecessary, just like the other "see also" source, a quote from Tony Garza in a BBC article stating that one shouldn't rely on remittances. But the OAS report follows this up, as does the BBC article, by saying that remittances "reduce poverty, lower internal migration, increase employment and investment (above what it otherwise might have been), and create local demand for goods and services such as livestock, seed, cattle, transportation, and education," and "Money sent home by Mexicans working abroad has become an efficient weapon in the country's war against poverty," respectively.

It is true that remittances can lead to an increase in income inequality. This was noted by a Washington Post article recently, and was discussed by someone with personal experience at an Opinion Work Product post.

But the basic facts and benefits, noted by every one of the above links, remain the same: "remittances have become a vital source of income for [developing economies] as a whole." (BBC.) This is a tremendous advantage to both legal and illegal immigration, one that is so enormous (10% of several countries' GDPs) that it should be factored powerfully into any economic consensus on immigration.

The shame of the open letter is not its generous stance on immigration, but that it focuses too much on the mild gains to America and too little on those whose lives are transformed by pennies sent back.
5.18.2006 5:17am
jgshapiro (mail):
When most of our ancestors came here, being a LEGAL immigrant meant getting off the boat, signing a piece of paper, and getting a job. Now it means applying to a bureaucracy and waiting upwards of 2 decades for your name to reach the top of the list. Is that because no one wants to employ you for 2 decades?

No, it's because there are more people here now than when most of our ancestors came here, it's crowded in a lot of places (especially where the immigrants tend to settle - i.e., not Montana or Wyoming), and we don't have the same need for unskilled labor as we did back then, or the same ability to assimilate whoever wants to come.

Does that mean our ancestors got an advantage over more recent immigrants? That's one way of looking at it, but our ancestors also took a bigger risk, coming here when we were not a military, economic or cultural superpower.

In almost every field, it is easier to get in the door if you are one of the first people through and it gets harder as the room gets more crowded. Eventually, you reach a point where you have to limit the number of people or else the benefits of getting in are lost to those who are already there. So you let in as many as you can assimilate without undue disruption (here, unemployment and overtaxed services).

We let in more immigrants annually than virtually any country on the planet. But we can't take everyone, and certainly not all at once. Once you concede that point, you also have to concede that there will be both legal and illegal immigrants, and to discourage the latter we cannot do things that incent them to come or stay, particularly at the expense of the former.
5.18.2006 5:49am
logicnazi (mail) (www):
Taimyoboi said:


Those Americans who could not compete for lower wages aren't benefiting from the lower prices since they didn't get the job. The ones who do benefit from are middle and upper class Americans.

But if you tax them, you've just thrown away the wealth creation that resulted from those lower prices and you don't get any of those additional benefits.


Wrong on both counts. Everyone buys things. Even people on welfare buy things. The illegal immigrants are not creating people who are totaly out of work. The US unemployement rate hovers around 5% which seems about as small as it can reasonably get. The only worry is that illegal immigrants are reducing the wages US citizens get. But even if you don't believe this it doesn't matter since everyone who isn't dead buys food.

Primarily illegal immigrants work in the agriculture industry. The amount of food people eat doesn't increase much as one gets rich. True rich people might eat more healthy food but this actually argues for proportionally greater benefit in terms of lowering food prices for the poor.

Now as I said in my post the worry is that for the poor the reduction in wages exceeds the benefits from lower costs.

Well what happens if we tax the rich and transfer it to the poor. We just shift around the money so different people have it. If we had more total money (i.e. goods) before we shifted it around we STILL have more total goods. True you might point out that there is some inefficency associated with this shift (very little if it is just cutting further the taxes the poor pay/increasing reverse taxes) but so long as the total amount of extra goods we get exceeds this inefficency (which seems likely) overall we are better.
5.18.2006 5:54am
logicnazi (mail) (www):
jgshapiro said:


This is laughable.

Selfish is the reason we have ignored illegal immigration for so long: because we want to exploit workers who have no rights so that we get cheap fruit and don't have to pay employment taxes on our under-the-table nanny.

This statement also ignores the obvious distinction between legal immigration and illegal immigration.

In any case, we certainly do have an obligation to American citizens before any obligation to those born elsewhere. If that is selfish, than we are as selfish as every other nation on Earth. We give more in foreign aid than any other country and we accept more immigrants than anyone else, but come on. We do not have an obligation to share our resources with all 6 billion people on this planet and if we did so on a fair and equiable basis, there would be none left to distribute among those who pay taxes in.


I said that not considering the welfare of the immigrants (illegal or otherwise) is selfish. The response that we are letting the illegals in out of selfishness does not contradict this point. It's no different than the statement that 'it is selfish not to care for the poor' contradicts with the statement that 'the new deal was created as a selfish attempt to gain popularity'.

The idea that treating people who were born in other countries as just as deserving and people whose welfare counts just as much is laughable seems very disturbing.

How does the statement ignore this obvious distinction. That's like saying the statement we should care for the poor doesn't distingush between the male and female poor. They are different, so what? That hardly entails we shouldn't consider their welfare.

Yes, frequently it is acceptable to punish people for breaking the law. However, the only justification for this is if it improves overall welfare (i.e. deterance). The fact that sometime we must punish people doesn't allow us to ignore their welfare. Just the opposite, we are morally required to do the least harm to their welfare that acheives the increase in general welfare, i.e., it is totally unjustified to punish people in ways that are not needed for deterance or other increase to public welfare. Personally I think the link between illegal immigration and general law abidingness is very very weak.

The argument that everyone else does it therefore it is right for us to do it too is just absurd.

As individuals we have obligations to care for our fellow man and we should not insisty on sharing our benefits with only other rich people like us. In fact it would seem just as immoral if rich people got together and decided they were a 'society' therefore they could avoid giving any money to any poor people as we find white people doing the same thing.

In other words if it is okay for a bunch of us to get together and say well we are only going to care about people who were born in the same place as us how is this any different than a bunch of people getting together and saying we are only going to care about people with the same skin color?

Ultimately a country is just a collection of individuals. The fact that we have all gotten together and given ourselves a name no more justifies treating people who aren't part of our group worse than the fact that the KKK got together and formed a group justifies them treating other races as worse.

Yes, of course everyone would be worse off if we simply distributed resources uniformly. There is clearly a limit on the amount of immigration we can handle lest the system fall apart and the total welfare decrease. My point is the simple utilitarian one, our obligation is to increase total welfare period. Obviously those things which decrease total welfare because they break apart the system are bad. However, we are a far cry from our system falling apart due to immigration.
5.18.2006 6:10am
logicnazi (mail) (www):

Ask yourself: do you really want people who are inclined to put the interests of foreigners over that of Americans running and advising the US government?


Hell yes. I don't care any more about someone from alabama than someone from mexico. Yes, I might end up losing out to some degree but nowhere near to the degree that immigrants are going to benefit.
5.18.2006 6:13am
AppSocRes (mail):
Considering that migration is as much a demographic as an economic phenomenon and that demography is far more of a science than economics, it is unfortunate that there seems to be so little awareness of the work demographers have done on this issue. Check out the Population Reference Bureau's site for a lot of very balanced information. Generally speaking, demographers are far more "data driven" than are economists. Their mathematical models relate to measurable quantities (e.g., births vs utility) and are testable. Their analyses are far more evenly balanced. Among demographers there is no equivalent to the Ricardo-Krugman party line on the impact of migration that one finds among most economists. Instead there is a humbleness that researchers develop when forced to deal with the natural world. (Anyone who's debated an economist on this issue has experienced the smug look, the reference to "mathematical" demonstrations that migration of labor increases general welfare, and the dismissal of evidence to the contrary as argument by example.)

I'm of two minds about unrestricted population movements across US borders. I don't have a dog in this fight. But I would like to make a few points that are often overlooked:

Everyone who has written so far has conflated several issues: permanent in-migration, back-and-forth migration of non-native workers, and the current stock of non-native workers. Each of these flows and stocks has, of course, a legal and illegal component. They all have different impacts on wages and the economy.

Economic models and econometric studies may show that the aggregate effect of immigration (legal or illegal) on native-born wages is small, but case studies show that the wage effects are often concentrated in quite small populations, where the effects can be devastating, and these devastating effects can destroy impacted communities. It is a fact that janitorial and cleaning services in many US cities were once a source of reasonably remunerative work for African-Americans who either set up small companies to exploit this market niche or worked as union-protected janitorial and cleaning service employees. African-Americans have been driven out of this sector of the economy in cities where there is a large population of recent Latin American immigrants. Wages of janitorial and cleaning service workers have fallen dramatically. It may be great that the folks in Westwood wind up paying less for their servants, but a lot of families in Watts suffer as a result.

Another seldom discussed aspect of migration - particularly illegal migration - is that it differentially impacts state and local government finances versus federal government finances. State and local governments wind up paying for most of the government services that migrants get, e.g., education, police protection, and emergency health care. Yet state and local governments' revenue streams do not profit that much from migrant contributions, e.g., immigrants pay real estate taxes only indirectly and at a diminished rate than native property holders. On the other hand, the feds wind up collecting income taxes, social security taxes, and medicare taxes from immigrants; but often wind up pocketing this revenue without ever providing services. As an example, illegal immigrants contribute tens of billions of dollars a year in social security taxes, but are unlikely to ever receive any social security benefits.

As has been the case several times before in US history the most deleterious impacts of immigrant labor are hitting the African-American community. African-American politicians in the Democratic Party have truly become Uncle Toms on this issue. Party discipline (fueled by the perhaps illusory hope that a new Hispanic vote will give Democrats an electoral edge) is forcing these politicians to work against the interesats and concerns of their own community. It would be ironic if the immigration issue becomes the wedge that finally splits African-American voters from their mule-headed allegiance to the Democrats. Doubly ironic, since studies suggest a gradual shift among Hispanics to the Republican Party across generations.
5.18.2006 9:42am
Closet Libertarian (www):
JunkYardLawDog is exactly right, there is a big difference between legal and illegal immigration. I am dissapointed in those economists for a missleading letter.

One of the big problems with illegal immigration is that it is off the books so we don't know the extent of the benefits and costs of that type of immigration. I am naturally suspicious of systematic failures to report.
5.18.2006 10:12am
Ross Levatter (mail):
Closet Libertarian:

"I am naturally suspicious of systematic failures to report."

What a good German you are. Papers, please. (Can't have a free society without everyone reporting to the central government...)
5.18.2006 10:36am
Jimbino (mail):
It seems that every discussion of immigration policy is short on logical rigor, even those started by economists. A real economist might well start the discussion by pointing out that the newcomer to any society generally contributes to it on the margin while taking from it on the average. Consider Ernest Shackleton preparing for his polar trip. He provisions the trip by counting heads, and he probably won't hire more than one carpenter, one navigator, one cook and one photographer, and when the first fine dog handler shows up, he will hire him, whether legal or illegal. It would be nice to have a backup navigator, for example, but he would eat just as much and probably contribute very little. In no case would Shakleton consider letting a crew member bring along a spouse, kid or household pet. To do otherwise would put his entire enterprise at risk.

Our "family-friendly," ageist, sexist, racist and homophobic American immigration policy puts the entire country at risk. Countries like New Zealand that have a sensible immigration policy make an effort to attract skilled foreigners, regardless of those other factors. Indeed, it would be good for America if no American were allowed to have a kid as long as an already potty trained illegal alien can be found who is ready and willing to work.
5.18.2006 10:40am
JunkYardLawDog (mail):
Logicnazi,

It may be in some wild stretch of the term that taking into account the USA societies needs and culture and what is good for USA citizens before considering what is good for immigrants is selfish, but at least its not an insane prescription for destruction of our country, which is what the effect would be of what you advocate. When EVERY country in the world enfoces immigration policies far more restrictive and punishment oriented than the USA, it would be insane to declare open borders. Declaring open borders is exactly the same thing as declaring a dissolution of the country. No borders - no country. Maybe that's what some (not saying you) want with open border or effectively open border policies, its just one more way of trying to destroy their hated enemy the capitalist and properous and free society known as the USA.

Says the "Dog"
5.18.2006 11:06am
JunkYardLawDog (mail):
Ross Lavatter or is it Laughather said:

Why is it after being around the Dog's posts, I feel like I have to wipe my shoes off?

1. Because they reveal to you how deep in your own BS you are standing?

2. Because they cause you to look down and notice the nonsense spewing all over them from your own mouth?

3. Because you have closed politically correct government school trained mind that mistakes any thoughts outside your approven orthodoxy as vile?

Sorry, don't have time for a full Top Ten List Reasons Why for you.

Says the "Dog"
5.18.2006 11:16am
Scott W. Somerville (mail) (www):
Does anybody EVER note how illegal immigration interacts with the minimum wage? All this talk about "the jobs Americans won't do" seems to miss the point. Americans are happy to work, but are prohibited by law (and the laws of economics) from doing jobs that fall below the minimum wage threshold.

How about if we repeal and/or amend the miminum wage while we're working on immigration issues?
5.18.2006 11:27am
Rational Actor (mail):
AppSocRes - that was a good post. thanks for trying to elevate the level of discourse.
5.18.2006 11:46am
David Chesler (mail) (www):
Ross Levatter writes When most of our ancestors came here...

This history has a vote, but not a veto. When the ancestors of various influential politicians became millionaires, getting rich required nothing more than being a bootlegger -- yet another argument I'll be using when I camp out on the beach at Hyannisport and refuse to move, explaining that I'm not breaking any laws except those that prohibit my being there.

(And when my ancestors came here they learned English in about a year, and didn't expect they'd be able to communicate with their new government until they did.)

Hillel's dictum comes in very handy for this back-and-forth as we try to find a middle ground.

A significant problem is that while some of us have been filling out I-9s for 20 years and believing our government that the 1986 amnesty would be the last time and this time we mean it and the borders would be secured, others, namely those who have come here illegally and those who hire them at reduced wages, have taken advantage of the tacit approval from those branches of the government that could have enforced the law if they chose to.

But I would like to know what the presence of "too many millions to deport" has to do with maintaining the current porous border.

logicnazi writes Everyone buys things. But not everyone buys things in the US. (As AppSocRes points out, these are different issues, but the lettuce-picker sending money to his family in Mexico, or the programmer sending money to his family in India, has a different impact than the worker whose wages are all spent in the US. The amount of food people eat doesn't increase much as one gets rich. That depends on whether you measure your food by calories or dollars. The amoung of food people eat, as measured in dollars, increases quite a bit with income.
5.18.2006 12:17pm
Freder Frederson (mail):
What about software engineering? Supposedly there is such a shortage of American engineers that we have to import guest workers (H-1B) but I can name capable, educated, up-to-date software engineers who have been unemployed for 21 of the past 60 months or worse, or who have left the field all together.

So can I, me for one. But H1B is a legal guest worker program. And there is little doubt that it depresses the wages of Software engineers, facilitated (along with the even shorter temporary work visa programs) massive offshoring of much of our software industry and is harming our edge in high tech.
5.18.2006 12:29pm
Taimyoboi:
"The only worry is that illegal immigrants are reducing the wages US citizens get…Now as I said in my post the worry is that for the poor the reduction in wages exceeds the benefits from lower costs."

Let's assume at the moment, that such is the only concern. You originally proposed that we make up the loss to the poor by taxing the rich. To make up the exact value lost to the poor, you have to take the exact value from the rich. The net effect here is a wash. There is no magical extra creation of goods. Indeed, there is a deadweight loss gained from the imposition of taxes. Whereas that middle or upper class person could have used the extra money to invest in growth to give that poor person higher wages, that money is now simply being transferred to the poor person to purchase basic goods like food.

But the problem is that it's not the only concern. Another concern is the number of Americans who are unemployed or leave the labor market because they can no longer compete with cheaper immigrant labor.

Citing the unemployment rate is misleading. The unemployment rate only includes those people who are not working but are seeking work. This leaves out a large portion of unskilled and uneducated workers who are not even seeking work.

See this study by CIS for an account of the displacement of American workers out of the labor market entirely.

So now the question is not just lower wages received by those who are still employed, but lost wages by those who are unemployed.

Now do we not only have to counteract the effect of lower overall wages by taxing the rich some, we also have to tax the rich even more to provide welfare to those who aren't even getting the benefit of reduced wages.

While it is nice that a person on welfare can still buy things, what you neglected to mention is that a person on welfare is buying things at the expense of another tax payer. There is certainly no wealth creation here either. Indeed, your adding additional deadweight loss to the economy to counteract the lower overall wages, and the greater number of people forced out of the labor market.

To offset those inefficiencies, you do need wealth creation. I certainly don't see where it's coming from if you attempt to rectify the situation by slapping on more taxes. Either you have to accept the lower wages for unskilled workers, or you have to impose taxes in such way that you remove any gain from immigration in the first place to offset the losses to poor and unskilled Americans.
5.18.2006 12:47pm
Jimbino (mail):

While it is nice that a person on welfare can still buy things, what you neglected to mention is that a person on welfare is buying things at the expense of another tax payer. There is certainly no wealth creation here either. Indeed, your adding additional deadweight loss to the economy to counteract the lower overall wages, and the greater number of people forced out of the labor market.


There is no "wealth creation" but great taxpayer expense in bringing an Amerikan kid into the world. I resent the taxes I pay to miseducate the unneeded kids and I do hire every Spanish speaker who shows up at my door here in Texas. How in the world can I begin to consider those glad workers a detriment to my welfare as an Amerikan? The law be damned!
5.18.2006 1:00pm
Closet Libertarian (www):
Ross,

Yes I do want people to show their papers to enter this country! And since we do such a poor job at the border, we have to ask for papers for things like getting a job, and should ask for them for using pubic services. I'm not crazy about this, but sometimes an ID and permit process is necessary to avoid abuse.

Anyway that wasn't really my point. My point was everthing with illegal immigration is a rough estimate since they are not on the books. We do have some information on things like when criminal are caught and everything I have seen says illegal immigrants are over represented here.
5.18.2006 1:06pm
Closet Libertarian (www):
Ross,

PS Thank you for the compliment, but I'm not German. I'm a 8th generation decendant of a illegal French immigrant (well he deserted the French army after fighting at Yorktown so not sure if we had immigration policies yet).
5.18.2006 1:11pm
Midgely (mail) (www):
I've seen a few references to CIS, the Center for Immigration Studies. You should be aware when reading about their papers that they were founded by FAIR, the Federation for American Immigration Reform, a group that advocates a complete, temporary ban on immigration, with a study on the possibility of making it permanent. While CIS does not take such an extreme stand, its papers should be viewed in that light, as a contribution to the debate from fairly far along to one end of the spectrum. A counterbalancing view might be had from many other groups, such as the Migration Policy Institute.
5.18.2006 1:11pm
TLB (mail) (www):
Midgely writes: I think it should be noted that the remittances "debunking" noted above is actually even more superficial than the open letter, without the excuse of being a manifesto. Not a single fact is cited in the debunking, only a somewhat wild-eyed accusation that companies that use illegal immigrants are paying bribes to politicians.

Actually, that's not what the page says, only that companies that profit off of illegal immigration donate to politicians who support illegal immigration. Specific examples are not difficult to find.

In addition, the two "see also" references directly contravene, rather than support, the post's claims.

The OAS link is there to provide additional information. It has both positive and negative factors listed.

The shame of the open letter is not its generous stance on immigration, but that it focuses too much on the mild gains to America and too little on those whose lives are transformed by pennies sent back.

And, my post describes the hugely negative impact of remittances both on the other country and on us. Of course there are benefits. However, the damage done to our system need to be taken into account and should cause us to attempt to wean those countries off of being dependent on money sent home.

For some examples of the damage done by relying on remittances, see "Migration of working-age people has devastated many Mexican villages":

...Avila is a part of the immigration debate that neither Mexican political leaders nor cheap-labor advocates in the United States like to talk about: Heavy migration has all but emptied much of the Mexican countryside... In five states, including Zacatecas, remittances from abroad now equal 100 percent or more of the salaries generated locally. In the state of Michoacan, money sent home from the United States is 182 percent of in-state incomes.

That is not a healthy situation. If that were the case with, say, Nevada relying on U.S. workers in Saudi Arabia, we'd work to bring those workers home and have them build up Nevada.
5.18.2006 1:23pm
Taimyoboi:
Midgely,

I did read through a couple, and they did seem relatively sound. However, I was not aware about the sourcing, thanks for the insight. I will take the studies themselves with a smidgeon of salt.
5.18.2006 1:35pm
Freder Frederson (mail):
Whereas that middle or upper class person could have used the extra money to invest in growth to give that poor person higher wages, that money is now simply being transferred to the poor person to purchase basic goods like food.

You are assuming that the rich will spend their money wisely or necessarily on things that will help our economy. Have you ever seen an episode of "The Simple Life"? I would say the rich are more likely to spend their income on expensive imported baubles, foreign trips and other consumables that have no net benefit to the economy while poor people are more likely to spend their money on the necessities of life that will produce an immediate benefits to the economy.

Of course since industry has decided to export most of our manufacturing jobs to low wage countries, some of the immediate benefit, say the dollars spent on a new toaster or pair of shoes that would have gone directly into the paycheck of a union worker in a factory in the U.S. ends up in the pocket of a rich stockholder, executive or Michael Jordan instead. Of course he ends up blowing it on a bet on a golf game with another rich friend who then spends it on illegal Cuban cigars, which Fidel uses to provide free healthcare to his people. Ain't capitalism grand!
5.18.2006 1:46pm
Brett Bellmore (mail):
It may well be that illegal immigrants are of net benefit to society, though I'm dubious that ALL the costs of their presence, and the policies ensuring their presence, have really been taken into account. Especially given that those policies involve concealing costs by deliberately avoiding arrest of illegal immigrants, in order to avoid having to deport them.

But there's opportunity cost: Massive illegal immigration prevents us from increasing LEGAL immigration.

Do any of you economists want to defend the proposition that illegal immigrants are bringing more benefit to our society than an equal number of LEGAL immigrants would have? That, to give an example, a college educated, English fluent filipino is of less economic benefit to the nation than a day laborer who speaks only Spanish?

Because that's who'd take the illegal immigrant's place, most likely, if we stopped illegal immigration. Literate, highly educated emmigrees from more distant shores, not illiterate day laborers.
5.18.2006 2:02pm
jimbino (mail):
Of course, it is silly to worry about a Mexican town's being devastated by its laborers lost. Capitalism is great, and it distinguishes itself from the alernatives partly by its appreciation of "creative destruction." Bankruptcy, whether of town or dead company like GM, is positive in that it frees labor and other resources for higher, better uses.

And Mexican towns like San Miguel de Allende can be fine places to live -- far finer than most American cities I can think of -- for the person who has some dollars to spend. The laborer who leaves to work in some godawful place like a meatpacking plant in Iowa in order to send his Mexican family some money is greatly improving their lives and his own, especially if he returns after 5 years to a beautiful home in San Miguel.

Labor, like capital, should always leave where it is not appreciated and settle where it is. I myself spent a decade one year in Dallas in order to improve my family's situation back in beautiful Austin and I now make the sacrifice of working in Amerika so that I can spend 4 months of the year at my home in beautiful Rio de Janeiro. Both places are better for it!
5.18.2006 2:32pm
Midgely (mail) (www):
TLB, the Knight-Ridder article on the decimated Mexican villages fails to distinguish between internal and external migration. Remittances generally cause temporary external moves to the US, followed by a return, and the money in the meantime lessens the family's need to internally migrate to the home country's cities to find work. The "Reviewing the Literature" article from the anti-remittance website notes that remittances "also reduce poverty, [and] lower internal migration."

It is indeed true that in Zacatecas the cash inflow is about equal to the local economy. This is, while not an unalloyed good, certainly better than the alternative. You say it's not a "healthy" situation. Ironically, much of the money sent back is used to purchase healthcare and education. Remittances provide increased access to fundamental human goods. See, again, the Reviewing the Literature paper.

As for my potential overstatement that the "debunking" website accuses pro-immigration forces of "brib[ing]" public officials, I should clarify that the page says that officials are being paid to "look the other way," and that this is "political corruption." The actual word bribery is not used.

Finally, it is vaguely possible, if not likely in my mind, that remittances lessen the pressure for reform in Mexico. It's unclear, though, if the poorest of the poor should be punished until paradise arrives in Mexico.
5.18.2006 2:43pm
Taimyoboi:
"Of course since industry has decided to export most of our manufacturing jobs to low wage countries, some of the immediate benefit, say the dollars spent on a new toaster or pair of shoes that would have gone directly into the paycheck of a union worker in a factory..."

Freder,

You're almost right. Investment to corporations that are more profitable by offering jobs overseas benefits low-wage foreign workers over American workers. It also benefits stockholders incidentally, in so far as a company remains profitable. There is nothing wrong with that. If a company goes belly-up, then people won't invest and you no longer have a company to even provide jobs to those union workers. For example, see what's happening to General Motors.

To benefit American workers you need to make American companies more competitive on the global market so that their jobs stop folding up and heading overseas. One way would be to lower corporate tax rates, of which, America has one of the highest in the world.
5.18.2006 3:05pm
frankcross (mail):
It is incorrect to attribute the loss of manufacturing jobs to outsourcing. Most of those jobs were lost to automation. Many of the ones that went overseas would have been lost to automation had they stayed in the US.

It's considered bad to be a Luddite, so people like to scapegoat moving overseas and trade, but it's technology that cost manufacturing jobs. An article summarizing this in this week's Automation World mag, but plenty of underlying empirical support
5.18.2006 3:15pm
Broncos:
frankcross: Do you have a link? I looked for the article, but I couldn't find it.

I've often wondered about automation v. outsourcing v. lower pay (whether citizens or not). I have no data, but my gut feeling is that automation is a good thing, because it allows companies to compete with cheaper overseas labor without requiring outsourcing. While not perfect, hopefully some/many of the workers displaced by the automation can find ways to work with/repair the automation or in the subsidiary supply/repair industry. If we are going to globalize, it seems less harmful to embrace automation than to do otherwise.

But that's just a gut reaction. What do you think?
5.18.2006 4:09pm
EricK:
I am in agreement with Freder on at least one thing.

While this may be true for unskilled labor, what about traditionally semi-skilled and skilled labor? Meatpacking and the construction industries used to be good, middle class, union jobs that could support a family. Over the last twenty-five years they have become transient marginal jobs dominated by low-wage, largely undocumented labor (except where union construction labor has managed to hang on in some parts of the country). This has been nothisng but a calculated and organized process of union busting by agribusiness and the construction industry aided and abetted by the government which has ignored the flow of illegal immigrants and the illegal hiring and deliberate and illegal busting of unions.


I have seen this happen 1st hand. At the meatpacking plant that my cousin had worked for 10 years has slowly phased out citizens and has been hiring illegal immigrants, for a variety of reasons, but mainly to avoid paying things like unemployment and workers comp. The reason that this as such a negative impact is that in rural areas these are some of the only decent jobs for semi skilled labor.
5.18.2006 4:38pm
Freder Frederson (mail):
Investment to corporations that are more profitable by offering jobs overseas benefits low-wage foreign workers over American workers. It also benefits stockholders incidentally, in so far as a company remains profitable. There is nothing wrong with that.

While this might be true in the abstract, it is often untrue in the harsh realities of the real world. Low wage jobs overseas bring questionable benefits to foreign workers and often result in wholesale environmental destruction, child labor, and sweat shop conditions. Those left in the countryside are often left in worse conditions than they were before industrialization took place because of the environmental destruction and the loss of social cohesion and socialist government programs.

This is exactly what is happening in China, where 300 million people or so are experiencing economic prosperiety in the cities (although even a good portion of that number are living in conditions that can best be described as Dickensian), while the vast majority of the country is worse off than they have been than at any time since the end of the cultural revolution.
5.18.2006 5:49pm
Broncos:
Freder: It's pretty hard to argue that globalization has been detrimental to China. The rural farmers are undoubtedly suffering; but one has to ask how much of their misery is caused by the policies of an authoritarian government and how much is caused by capitalism. It seems like I'm always reading about farmers being kicked off the land because the government wants it; or the government redistributing wealth from the countryside in order to build infrastructure in the cities.

As far as the benefits to overseas workers generally; I went on the blog of Greg Mankiw, and found post entitled "The Morality of the Global Economy." The articles that it links to are interesting reads.
5.18.2006 6:02pm
David M. Nieporent (www):
Low wage jobs overseas bring questionable benefits to foreign workers
In the sense that upper middle class white American liberals who read The Nation "question" them, I suppose they can be said to be "questionable." I think the people who are choosing to take the jobs have far less "question" about whether they benefit.
and often result in wholesale environmental destruction, child labor, and sweat shop conditions.
All of which, while not as good as people in the U.S. have it, are a lot better than their prior state. (Do you think that subsistence farming doesn't involve child labor?)
5.18.2006 6:21pm
frankcross (mail):
Freder, I think that is completely wrong about China.
The people in rural areas are bad off, but how are they worse off than before? Meanwhile, countless millions have been elevated out of poverty. Here's a clip from a UN report:

Using the government poverty line, China's rural poor decreased dramatically from 250 million in 1978 (30% of the rural population) to 42 million in 1998 (4.6% of the rural population). Using a standard international poverty line of $1 per day would result in a substantially greater number of absolute poor, but the trend in reduction of poverty is still confirmed.

From an NBER study:

Sala-i-Martin finds that, on a global level, the number of people living in extreme poverty (income of less than $1 per day at the prices of 1985) and poverty (less than $2 per day) declined significantly during the period under study. In 1970, roughly 40 percent of the global population subsisted under the $2 poverty line, while about one-sixth lived under the $1 line. The picture was much the same in 1980, but "things changed dramatically in the 1990s" the author writes, when China, India, and Indonesia began growing rapidly. By 1998, less than 20 percent of the world population was beneath the $2 dollar level, while, less than 7 percent was below the $1 level. "The world, therefore," explains Sala-i-Martin, "has had an unambiguous success in the war against poverty rates during the last three decades." Even in absolute terms, from 1976 to 1998, the number of people living under $1 per day declined by 235 million between 1976 and 1998, while the number of people living on less than $2 per day declined by 450 million.
5.18.2006 7:31pm
logicnazi (mail) (www):
Let me make this absolutely clear since everyone keeps misunderstanding what I say.

I AGREE THAT IT WOULD BE FOOLISH TO COMMIT OURSELVES TO A POLICY OF LETTING EVERYONE IN NO MATTER HOW MANY PEOPLE SHOW UP

If 1 billion people decided to move into our country clearly this would destroy our social system. The end result of this would be to make everyone worse off because the US contributes massively to overall world good (both through research, economics and it's more principled stand on free speech than other western countries).

I am only unsure if we need immigration caps as a practical matter because I don't know how many people would show up if we didn't have any practical limit. I certainly don't believe we should have totally open borders that people can just walk across willy nilly.

What I am saying is that we have a moral responsibility to take more immigrants if they cause only limited overall harm to the country (we can compensate the areas and people disproportionatly impacted). I suspect we can take far more people than we are currently taking before we start to seriously strain our resources (and I really mean seriously..a slight raise in taxes is not serious).

Personally the plan I favor is the following. Create a guest worker plan with very high caps (higher than the current amount of legal+illegal migration) but if it happened that 1 billion people showed up we wouldn't let them in. Fund the buerocracy enough that applications for this program can be processed near instantaneously (perhaps via computer/biometrics AT the border). The individuals who come into the US under the program would not be eligeable to collect many kinds of benefits and social services. In particular I think it is hypocritical the way we are perfectly willing to let these people experience huge hardships in their native countries and do nothing but yet refuse to let them in our country because then we would have to give them these minimum social services. Sure, I wouldn't want to let them die in the streets but if they can't get heart transplants or whatever in their home country they are still better off if we let them in the states and don't promise to fund that either (communicable diseases are a different story).

It might also be worth considering to allow these guest workers to take jobs only in certain sorts of industries/jobs. Primarily temporary jobs/farm work. I would prefer to let them take any jobs, eliminate the minimum wage for everyone and make up the difference for US citizens via reverse income tax but this is just totally politically infeasable because no one things rationally about the minimum wage.

Then I would allow these individuals to progress to permanent residence if they meet certain criteria. Primarily lack of criminal activity and continous time spent in the US, i.e., indications that they plan to really become US residents not just work here. Possibly we could help address the disproportionate effect problem by giving guest workers who live in certain areas a bump up in the permanent resident application.

I suspect if we created such a program then all the people who are desperate enough to engage in illegal immigration would in fact be co-opted by the preferable guest worker program. Also since the guest worker program would be large enough to provide the cheap workforce needed for farming and other things there would be much less incentive to engage in illegal immigration. So no, I do not think that illegal immigration is inevitable unless we let in 1 billion people or otherwise totally swamp our country.

I'm not saying anything crazy or demanding that we redistribute all the US's wealth. I'm merely saying we should consider the welfare of foreigners as well as that of US citizens. I'm not an idiot who believes that valueing everyone equally means we must distribute wealth equally. Capatalism and other wealth inequalities can make EVERYONE better off which is what we want.

On another point I'm not convinced that economically legal and illegal migration are so different. It might be the case but what is the justification for this point?
5.18.2006 7:31pm
logicnazi (mail) (www):
Tamyoboi said:


Let's assume at the moment, that such is the only concern. You originally proposed that we make up the loss to the poor by taxing the rich. To make up the exact value lost to the poor, you have to take the exact value from the rich. The net effect here is a wash. There is no magical extra creation of goods. Indeed, there is a deadweight loss gained from the imposition of taxes. Whereas that middle or upper class person could have used the extra money to invest in growth to give that poor person higher wages, that money is now simply being transferred to the poor person to purchase basic goods like food.


This is only true if the amount of money the poor lose is equal to the amount cheaper the immigrants make the goods which is never going to be true. Not only do the new immigrants make the same products cheaper which frees up money to buy new things the immigrants themselves also spend some of their paychecks in the US also putting more money into the eocnomy. All this new money creates jobs for the people in the US who used to work the immigrant jobs and they create more stuff too. Not to mention the fact that the stuff they buy is also cheaper now as well. None of this even touches on other advantages like economies of scale or the new technologies which are developed when we move a greater fraction of the US population to more highly skilled jobs.

I mean lets take a simple example. Suppose you and 10 of your friends run a commune together. Some of you do carpentry, others cook and 2 of you pick vegetables for the commune. Now you have to give the 2 people who pick vegetables part of your work product (say each of you needs to give each of these two people 1/10 of your work product...not a very communistic commune) in return for their labour. Now two guys from the house next store show up and they offer to pick your vegetables in return for half the amount of stuff your commune members are picking it for. Is the commune in total worse off if you accept their offer?

No! Before every person who wasn't picking vegetables was giving your vegetable pickers 2/10 of their total work product. Now take the two people who used to pick vegetables for you and have them make chairs or some other task that produces similar value to what everyone else is doing. Now each of you only needs to give up 1/10 of your work product to get your vegetables picked because the new people pick them for half as much. Thus it is like the total effect is if you had one extra person laboring for you for free!

If you still don't believe me imagine the two people who used to pick vegetables decide to just hire these foreigners themselves. Now they can keep half of the stuff they get for picking vegetables *plus* use that time to do something of equal value. Basically the point you are missing is that the people who used to do the jobs the immigrants did are now producing other stuff.

I mean this is missing out on a lot of stuff (elasticity, velocity of money, multipliers etc) but suffice it to say the idea that letting in more immigrants on total increases the amount of stuff for US people is not 'magic' it is just simple economics. Modulo worries about inefficencies we can then move this extra stuff around to make things fair again.

If you still don't believe me go read the economics. There is debate about whether immigrants harm US workers but I think there is very little disagreement about whether they on total create more wealth in the US. You are getting the same value (the vegetables picked) for less cost (you have to give them less stuff) so of course the total wealth increases unless the people who used to pick vegetables don't have any work.

Also I don't think the unemployment rate is that misleading. Sure some people give up looking for work but this rate seems to roughly track economic health and most people who are reasonably employable (not felons, reasonably responsible) will keep looking for work.
5.18.2006 8:09pm
Brett Bellmore (mail):

I suspect we can take far more people than we are currently taking before we start to seriously strain our resources


It's not a question of straining resources. It's a question of cultural, for want of a better word, contamination.

People are fleeing Mexico because it has a disfunctional society. But when they come here, they bring with them the attitudes and ways that are the root cause of that disfunction. Starting with the fact that they ARE willing to violate our laws.

At some level of immigration, assuming our culture has any vitality, we can assimilate the immigrants into OUR culture. However, at some rate of immigration which is probably well below what we could susstain on a brute resource level, there are so many people of a like mind coming in, that assimilation starts working in the OTHER direction, and instead of the incoming Mexicans becoming Americans, we start becoming Mexicans.

And end up like Mexico. Which is desperately poor despite the fact that it has plenty of resources.
5.18.2006 10:04pm
frankcross (mail):
Mexican contamination? How scary.
Actually, the Mexican immigrants are far less likely to commit more conventional property crimes and those of violence, as recently documented on Marginal Revolution and tend to have pretty nice family values and work ethics. What's more the evidence demonstrates that the Mexican immigrants assimilate very quickly into America, in terms of language or otherwise. So I think your fear is pretty much totally unfounded.

And economic success has very little to do with resources and everything to do with institutions, on which we remain quite strong.
5.18.2006 10:19pm
Freder Frederson (mail):
Using the government poverty line, China's rural poor decreased dramatically from 250 million in 1978 (30% of the rural population) to 42 million in 1998 (4.6% of the rural population). Using a standard international poverty line of $1 per day would result in a substantially greater number of absolute poor, but the trend in reduction of poverty is still confirmed.

Well, this is where concepts of "poverty" get very deceptive. While it is true that incomes in the countryside may have improved in China, the social safety net has been completely shredded. In 1978, rural Chinese could be assured of primitive but adequate medical care, free education for all children, and a guaranteed, if minimal, pension. All those have disappeared in the new China. So while the new prosperous rural Chinese might make $2 a day, his new found wealth doesn't make up for his increased expenses.
5.18.2006 11:26pm
A. Zarkov (mail):
What I am saying is that we have a moral responsibility to take more immigrants if they cause only limited overall harm to the country...

Most Americans disagree with you. They want immigrants who will be a net benefit. Who appointed the US to be a milch cow for the world? No other country acts that way. From what do you derive such an idea? There is no famine in Mexico, and they are not suffering war or revolution. If times get bad (depression, war etc) in the US, the migrants will flee.

Let me ask you this. If the US went to war with Mexico, or any other country for that matter, whose side would you be on?
5.18.2006 11:59pm
JunkYardLawDog (mail):
FrankCross,

I read that there is a recent study conducted by a professor out of Princeton that indicates 34% of LEGAL immigrants from Mexico are on welfare. I was frankly surprised by this number, because my experiences with illegal immigrants have always been they wanted to work and make money. However, I haven't lived in Southern California and other large cities of very large pockets of legal mexican immigrants.

It is a scarry number however, in that if 34% of LEGAL mexican immigrants are on welfare/public assistance, then a substantial portion of illegal immigrants in an open border amnesty/guest worker situation could be expected to be on welfare/public assistance.

Says the "Dog"
5.19.2006 12:09am
TLB (mail) (www):
TLB, the Knight-Ridder article on the decimated Mexican villages fails to distinguish between internal and external migration. Remittances generally cause temporary external moves to the US, followed by a return, and the money in the meantime lessens the family's need to internally migrate to the home country's cities to find work.

Well, migrating to their cities should be their issue, not ours. And, there's more on internal/external migration in "Mexico's other migrant wave". And, while tightening the borders might have played a role, it's obvious that the great majority of illegal aliens are here to stay.

Remittances provide increased access to fundamental human goods.

Yes, they do provide benefits. However, the point is that they are also leading to increased political corruption in the U.S. and helping undermine our entire political system. Perhaps direct foreign aid or private aid would be a much better alternative if your goal is humanitarian.

As for my potential overstatement that the "debunking" website accuses pro-immigration forces of "brib[ing]" public officials, I should clarify that the page says that officials are being paid to "look the other way," and that this is "political corruption." The actual word bribery is not used.

I wrote that page. I certainly could have done better and perhaps I'll rewrite it and add more links, but I was fairly careful with my language in that particular paragraph, and you missed the "in effect" part. But, let's not quibble about that.

Finally, it is vaguely possible, if not likely in my mind, that remittances lessen the pressure for reform in Mexico. It's unclear, though, if the poorest of the poor should be punished until paradise arrives in Mexico.

Change has to start somewhere, and it won't start anywhere as long as Bush is BOHICA for Vicente. There's more on the topic of Mexico exporting potential reformers here.
5.19.2006 1:37am
Brett Bellmore (mail):

Actually, the Mexican immigrants are far less likely to commit more conventional property crimes and those of violence


First, the subject is ILLEGAL immigrants, not "immigrants".

Second, that assumes accurate statistics on this when we know that police are avoiding anything that might lead to having to recognize illegal immigrants, and thus deport them. In large parts of the country, if a hispanic looking person with poor English skills gets arrested, the policy is to studiously AVOID checking on their immigration status.

Third, as I pointed out above, and nobody seems to have cared, the issue isn't whether illegal immigrants are a net benefit. The question is whether they're a greater benefit than the legal immigrants they're displacing.

While we're letting anybody who wants to waltz across our southern border, we have an enforced immigration policy with regards to other countries, which is choking off the entry of highly educated, english literate, law abiding people from more distant nations, and yes, even from Mexico.

The real cost is the opportunity cost, the better immigrants we're turning away to accomidate the illegals.
5.19.2006 7:37am
frankcross (mail):
Junkyardlawdog, you dismissed all such studies earlier in the thread as unreliable. I haven't seen this one and very much doubt its true. Show me the research.

Brett, the study was based on populations, so your objections don't apply. As I said, check Marginal Revolution. It wasn't counting criminals, it was showing that greater populations of immigrants were associated with lower crime rates.

I completely agree with you, Brett, on the legal vs. illegal immigration. It would be far better to have the same number of legals. If that were the tradeoff. But at the present time I fear that the threat is anti all immigration.
5.19.2006 12:04pm
Brett Bellmore (mail):
I think the threat is that what is currently a reaction against illegal immigration could BECOME anti-all immigration, if the opponents of enforcing immigration laws succeed in their efforts to conflate legal and illegal immigration.

Opponents of illegal immigration are at great pains right now to emphisize that it's only the illegal immigration they oppose. Unfortunately, proponents of illegal immigration are at equally great pains to obscure this critical distinction. If they succeed, and the public decides that indeed there IS no real difference, the end result will NOT be open arms for the illegals, it will be the door slamming shut in the faces of the legal immigrants.
5.19.2006 1:36pm
frankcross (mail):
I think opponents are fighting illegal immigration because there's so much more of it.

If they were not against immigration they would be pushing a policy that both controlled illegals and increased legals. But they're not. They want to stop illegals and not increase legals. That tells me they're just against lots of immigration. Which is confirmed by some of the leading websites (against all immigration) and the arguments (they'll change/destroy our culture with their different ways, which also applies to legals).
5.19.2006 2:33pm
JunkYardLawDog (mail):
FrankCross,

I think you are correct the unprecedent in our history volume of illegal immigration over the last 10 to 15 years has resulted in many people, myself included, that enough is enough for a while in terms of this kind of volume. I think most such people like myself feel this way because the volume is large and uncontrolled that effective assimilation into our culture, history, values (both political and otherwise, etc.) is not working the way it should.

There was a time when the great "melting pot" theory of assimilation was taught in schools as one of the great benefits to our society and a source of our strength and vitality. I and many like that happen to still believe that it is NOT immigration alone that makes our country strong. Its immigration PLUS assimilation that makes our country strong.

Finally, the country is far more settled and populated than it was in 1880, and this combined with the unprecedented in history volume of illegal/legal immigrants is a perfectly rational and relevant factor in determining immigration policies and levels for legal immigration.

We should not have immigration (legal or illegal) at levels above which we can not properly assimilate into our society, and we need to follow the rational course of wanting immigrants to be highly educated and skilled workers. Allowing a flood of uneducated, unskilled, workers into this country is not in the country's best interests, and it is only rational to do that which other countries do and have laws enforced to reflect these values and preferences.

Heck, if we only enforced laws on illegal immigration of mexicans the same way MEXICO does within its borders we wouldn't have a problem.

Says the "Dog"
5.19.2006 3:24pm
Steve Sailer (mail) (www):
If you are interested in learning the facts about effects of illegal immigration, this highly informative comments thread on Marginal Revolution is a much more analytically insightful trove of data than is Alex's mawkishly sentimental "open letter:"
5.20.2006 2:54am