Posted on 05/29/2006 8:16:18 PM PDT by SirLinksalot
Why Ruin the World's Best Anti-Poverty Program?
By Alexander Tabarrok
25 May 2006
Winston Churchill famously said "If you put two economists in a room, you get two opinions -- unless one of them is Lord Keynes, in which case you get three." Churchill, however, was wrong. Brad DeLong worked for the Clinton Administration and regularly calls for the impeachment of President Bush. In contrast, Greg Mankiw speaks warmly of President Bush and headed his Council of Economic Advisors. Readers of their respective blogs (DeLong, Mankiw) will know that no love is lost between these two. Yet, both these economists were early and enthusiastic signatories to my Open Letter on Immigration (I didn't tell them that the other had signed until the letter was publicized, however!).
DeLong and Mankiw are not alone. In a survey, economists and the general public were asked whether "too many immigrants" was a reason for bad economic conditions with 2 being a major reason and 0 not a reason at all. The public rated immigration a 1.23, economists just immigration just a 0.22.
Why do economists think more favorably of immigration than the general public? I think there are three reasons: theory, empirical research, and ethics.
In terms of theory, the public focuses on the idea that "immigrants will take our jobs." But immigrants buy our products too so the primary effect of immigration is simply to increase the size of the market. Moreover, few people complain that in twenty years time our jobs will be threatened when all the babies born this year start working! Yet, population growth and immigration are very similar economic forces. Jobs can be a problem in a recession or if labor markets are not free and flexible but these problems are not caused by immigration and ought to be addressed directly.
What about wages? Economists do recognize that immigration can lower wages; but unlike the general public they also know that immigration can increase wages. Clearly, the immigration of a high-skilled worker can increase wages for Americans. Google, Yahoo and Sun Microsystems? All founded by immigrants. But the immigration of a low-skilled worker can also increase wages for Americans. More low-skilled workers mean lower prices for services such as day care or dry cleaning and this means that higher skilled Americans can spend more time doing the jobs at which they are most productive. Immigration, like trade, increases total production -- instead of moving the goods we move the workers.
The fact that immigration and trade are similar also means that even if immigration lowers wages, restricting immigration won't necessarily raise wages. With fewer low-skilled immigrants in the United States the incentive to move production overseas will increase.
Economists have extensively investigated the wage question with special attention being placed on the effect of low-skilled immigration on the wages of U.S. high school dropouts. The results from both proponents and opponents of immigration are surprisingly similar. Studies by David Card (UC Berkeley) suggest a zero effect of low-skilled immigrants on low-skilled workers. Studies by George Borjas (Harvard) suggest a wage decline of 7.4%. Borjas acknowledges that his figure is probably on the high side as it doesn't take into account increases in the capital stock brought about by immigration. Card's studies are probably on the low side because they assume that labor markets in different cities are not at all connected. Most economists are happy at some number in between.
High school dropouts have it hard already so even a small decline in wages is not something to be ignored. But is reducing immigration really the best way to help high school dropouts? How about encouraging them not to drop out instead? Why must we pit the poor against the much poorer?
Economists are probably also more open to immigration than the typical member of the public because of their ethics -- while economists may be known for assuming self-interested behavior wherever they look, economists in their work tend not to distinguish between us and them. We look instead for policies that at least in principle make everyone better off. Policies that make us better off at the price of making them even worse off are for politicians, not economists.
Immigration makes immigrants much better off. In the normal debate this fact is not considered to be of great importance -- who cares about them? But economists tend not to count some people as worth more than others, especially not if the difference is something so random as where a person was born.
Economists do sometimes distinguish between the rich and the poor, but high school dropouts in the United States are rich compared to low-skilled immigrants from Mexico. It's a peculiar kind of ethics that says we should greatly penalize very poor immigrants in order to marginally benefit relatively rich Americans (peculiar at least if one is not stuck in the Robbers Cave).
Immigration benefits not only the immigrants but also their families back home because of the billions of dollars of their own money that immigrants send to their families. Remittances to Mexico in 2004, for example, amounted to 16.6 billion dollars -- to put this in perspective that's about the same as all direct foreign investment in Mexico. Remittances far exceed foreign aid and remittances go directly to poor people and not to corrupt governments and dictators. Why ruin the world's best anti-poverty program?
Economists, of course, don't have all the answers nor do they agree about everything. Immigration is bound to have important effects on politics and culture, for example, even if no one understands what these effects will be. The Open Letter on Immigration was written not to end debate but rather to say 'Let us debate. But let us make it an informed debate.' I'm proud that economists have something important to add to that debate.
Professional economists or other social scientists interested in signing the open letter may do so by sending an email with their name and affiliation to OpenLetter@Independent.org.
Alex Tabarrok is Associate Professor of Economics at George Mason University and Research Director at the Independent Institute, sponsor of The Open Letter on Immigration.
If you replace "immigrant" with "slave" in that article it reads exactly like the arguments the apologists for slavery used in the 1840s.
"Clearly, the immigration of a high-skilled worker can increase wages for Americans. Google, Yahoo and Sun Microsystems? All founded by immigrants. "
LEGAL IMMAGANTS, ya twit! Get it straight. We are not against legal immagration. Most republicans are for it. Its the illegal part that gets me.
Thank you for posting this.
btw, you might find this of interest:
http://www.neoperspectives.com/Amnesty_From_Government.htm
True! But then I didn't know to many slaves that were so desperate for an improved life that they were willing to pay human smugglers to get here.
Then would you support policy that made it easier to immigrate legally through raising the annual limit?
TABLE 7.5 Average Fiscal Impact of an Immigrant Overall and by Education Level (1996 dollars)
Post #44 via the research on immigration from Julian Simon.
Excellent observation! I thought the same thing, but you articulated it far better than I could have.
"....... but unlike the general public they also know that immigration can increase wages."
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Hell, if 15 million or so uneducated peasants are good for our economy.....we should bring over a few hundred million more from India, Africa and South America!
If a little is good...a lot must be GREAT!
:)
'Then would you support policy that made it easier to immigrate legally through raising the annual limit?'
Legal immagration quota can rise and fall with the needs of the economy. Sure I would. Whos here and where are they.
Folks it either that or some of our citizens need to get off their lazy butts an be birthin' some babies!!! (I've done my share!)
What happens in a capitalist society when you import poverty faster than it can be absorbed into the economy? You get alot of immigrants who will end up being unhappy with their economic status. (Opportunities take longer to develope.)
You have alot of eventual voters who are being taught they can vote themselves "property" for the "havenots" from the "haves". (Promoted by the Marxicans)
On the contrary. There were millions of them! They were called "indentured servants" which is why the 13th Amendment bans both slavery and indentured servitude. They sold themselves into what was essentially "slavery" for a fixed period of time (usually seven years) in exchange for free passage over here. According to this: "One half to two thirds of all immigrants to Colonial America arrived as indentured servants. At times, as many as 75% of the population of some colonies were under terms of indenture."
Good! I bet that many 'round these threads wouldn't share your view though.
Besides, revisionist history is replete with anything that tries to have America look bad...the teaching of 'indentured servitude' is but one of the revisionist attempts to make early settlers look to be evil and capitalists. Equating immigrants coming to America -- on their own accord, with much to risk in search of a better life -- to slavery is preposterous. Interesting how you've "moved the bar" in the argument, though.
Same goes for "pointing it out". If you're going to waste a post by pointing out that it's a duplicate, but not providing the link to the "duplicate", you're not really helping out.
Second comment, (noted before) when my mother was researching her family tree she was thrilled to learn a couple of "famous" relatives as well as the ship that brought her favorite branch of the family over (late 18th century). Having found the ship's manifest in order to reference the names, she found two words..."Irish labor"...covering the enrire manifest. (think about it)
When looking into my father's far less renowned heritage we found reference to arrival in 1636 in which half or more of the passengers were cited as "manservant or maidservant" to the two or three families who'd paid for the travel.
IF it's the same lineage, Dad's folks paid for their own trip.
Yet, at various times during America's history (as early as 1973), service in the United States Armed Forces was many times compulsory. Will you call this "slavery" also or do you reserve that term for indentured servitudes in the Colonial Period and recent illegal immigrants who come here voluntarily?
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