Skip to comments.The Free Market Case Against the Immigration Bill
Posted on 06/02/2007 10:16:33 AM PDT by DogByte6RER
The Free Market Case Against the Immigration Bill
By James D. Miller : 01 Jun 2007
Unskilled Immigrants + Large Welfare State = Higher Taxes
The above equation shows why free market enthusiasts should oppose the current immigration bill. Yes, historically immigration has helped the U.S. economy. But our large welfare state combined with the importance of education to wealth creation provides a compelling reason to oppose importing unskilled immigrants and citizens. The benefit an immigrant provides to an economy comes from the value of his work. The lower an immigrant's skill, the less value the economy derives from his presence.
Some immigration advocates, though, claim that the U.S. economy "needs" unskilled immigrants to work at critical if low paid jobs. This, however, is an economically silly argument. If a job offers low wages either it is relatively unimportant for the economy or many people are willing to do it.
A hundred years ago human muscles played a relatively large role in powering our economy. At that time a strong, hardworking, but uneducated immigrant could make great contributions to our economy. Today, however, when our economy mostly runs on educated brains, we receive far less benefit from importing uneducated workers.
Much of the cost of new immigrants comes from the government services they consume. In 1900 the U.S. provided relatively few government benefits to anyone, so poorly paid immigrants couldn't become too much of a burden on the economy. Today, however, government spending is about five times larger (as a percentage of the economy) than it was in 1900. And legal immigrants today have the right to consume considerable government services. Indeed, according to the Heritage Foundation's Robert Rector, in 1994 the average low-skilled immigrant household received $30,160 in direct governmental benefits. But this same average family paid only $10,573 in taxes. As a result, low skilled immigrants are net tax eaters. (But read this for a contrary view.) The difference between the taxes paid by unskilled immigrants and the government benefits these immigrants receive is mostly made up by taxes imposed on U.S. citizens. Such additional taxes slow our economy.
Although very pro-immigration himself, economist Bryan Caplan provides a powerful argument against allowing millions of new uneducated illegal immigrants to become citizens. As he explains in The Myth of the Rational Voter, the lower a person's level of education, the less likely he is to politically support intelligent economic policies. So providing a path to citizenship for millions of uneducated illegals may eventually provide millions of votes for harmful economic policies.
Unskilled immigrants also cause political harm by increasing income inequality. Not only do the immigrants themselves make far less than the average American does, but they also lower the wages of unskilled native-born U.S. workers with whom they compete for jobs. Greater inequality fuels class warfare politics. And class-warfare politicians such as "Two Americas" John Edwards always support increased government benefits for the poor and thus push for higher taxes on the most productive Americans.
50 Million New Immigrants
The current immigration compromise is supposed to limit future illegal immigration in return for legalizing about 12 million current illegals. But it's foolish to think that implementing the current compromise won't increase future legal and illegal immigration. As economist Thomas Sowell writes:
"The big talking point of those who want to legalize the illegal immigrants currently in the United States is to say that it is 'unrealistic' to round up and deport 12 million people. Back in 1986 it was 'unrealistic' to round up and deport the 3 million illegal immigrants in the United States then. So they were given amnesty.... [W]ill it be 'unrealistic' to round up and deport 40 million or 50 million illegal immigrants in the future?"
Amnesty sends a loud signal to the world's poor that if you smuggle yourself into the U.S. you will eventually be legalized. Amnesty furthermore creates incentives for politicians to support further immigration.
As more immigrants become voters, there is greater voter support for allowing in more immigrants. Even if the current immigration compromise had effective measures against future legal and illegal immigration of unskilled workers, politicians would soon back out of this compromise in response to immigrant voters' demands to let in their relatives.
Politics rewards intensity. For example, although milk subsidies are harmful to almost all Americans, dairy farmers care far more about milk subsidies than do milk drinkers. As a result, politicians eagerly support milk subsidies.
Similarly, recent immigrants care vastly more about chain migration than do most other Americans. (Under chain migration the extended family of an immigrant has the right to move to the U.S.) New immigrants will fight much harder for the U.S. to increase chain migration than native-born Americans will fight to limit such immigration. Consequently, if the U.S. gives 12 million illegal immigrants voting rights, it might become politically impossible for the U.S. Congress to limit future chain migration. As a result, providing a path to citizenship for 12 million illegals today may well provide a path to entry for 50 million new unskilled immigrants over the next few decades.
Charity to Foreigners
The best reason to support the current immigration compromise is that it will significantly improve the life of many immigrants, even if it does harm current U.S. citizens. But the greatest benefit that the U.S. provides the world is our technological innovation. The entry of high-skilled immigrants greatly helps such innovation, but such immigrants don't enter the U.S. illegally and so won't benefit from the current proposed amnesty. Massive low skilled immigration doesn't promote innovation and by causing taxes to be raised will likely slow technological progress in the U.S. And if, say, this delays the discovery of a cancer vaccine or AIDS cure by even a few months, then enacting the immigration bill will on net harm non-Americans.
Too much of the conventional wisdom from the business class and free marketers has been that new workers are a benefit to the U.S. economy.
Miller's commentary make a great deal of sense. Armies of uneducated foreign immigrants will only feed and fuel the leviathan welfare state. This larger welfare state will in turn strangle our free market economy.
This amnesty bill is a guaranteed road to serfdom for America.
Actually, I’ve read that there is a “Refugee” industry that feeds off the immigration of welfare cases to the U.S. The more welfare recipients come here, the more social workers are hired, and the government bureaucratic pyramid grows. The refugee industry pushes to import more welfare cases to get more tax dollars for itself.
As an example of this, did you know that Senator Brownback of Kansas has imported thousands of muslim African tribesmen for the refugee industry into Maine, South Carolina, Virginia, and California - paid for by you, the American taxpayer? Brownback had only one requirement, the muslims could not be settled in his home state of Kansas, for some reason. He probably did not want sleeper cells of terrorists near where he lives.
I am not able to get the link to work. Thanks for posting this. Do you know if this is the same James Miller from VA who was an economist in the Reagan administration?
That’s weird about the link.
Try this one:
Also, here is a link for James Miller’s bio and background:
Daniel Henninger, Paul Gigot and the rest of the WSJ editorial board need to read this.
I will e-mail it to them at:
There’s one sure way of getting the invaders off our backs, and that is NO BENNIES FOR THE ILL EAGLES!!!!
Excellent article! Great points!
The Wall St Journal editorial a couple of weeks ago said quite the opposite and they backed it up with data. [That immigrants dipping into the welfare state is a myth and the truth is they contribute to the economy far more than they take.]
I’ll see if I can find this article
Well, Robert Rector from the Heritage Foundation has a totally different take as to the costs, present and future, of large numbers of illegals in the country.
Just say NO to Amnesty!! Before its too late!!
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