Just in time for our immigration discussion, Alex Tabarrok writes an open letter on immigration. The letter is intended to be bi-partisan and addresses only those issues on which there is a broad consensus among economists. It looks pretty good to me, and he's already gotten some prominent economists from very different parts of the political spectrum to sign on:
America is a generous and open country and these qualities make America a beacon to the world. We should not let exaggerated fears dim that beacon.
Looks like maybe those Americans are catching on - Canada will have to increase its marketing effort.
10 comments:
I agree with most of that letter. One statement struck me as overly optismistic:
"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."
I'm a great believer in the power of the US economy, but that one's a bit of a stretch. If it were true, our unemployment rate would always be near 0.
I also notice he didn't comment on the strain placed on social services. There is a common perception that illegal immigrants place an undue strain on medical, education and welfare resources without offering any return to the organizations providing these services.
Brian: I interpret the statement differently.
If immigration causes unemployment, then logically, you should be able to eliminate unemployment simply by getting people to move out of the country right?
Nope. Most people don't buy into that. So it's a little odd that they think the opposite is true.
In fact the number of people in the economy doesn't have much of an effect on employment at all. As more people arrive, they take a job, but also create work. There are structural reasons for unemployment that will be there regardless of the size of the workforce.
If the immmigrants are targetted at industries where there is a shortage of workers then they can actually create jobs: if you have not enough plumbers but too many lawyers, then get a plumber to move in and you address both problems at once: the plumbing job is filled, and every so often that plumber will need a lawyer of his own, so the demand for lawyers will rise. It's a form of structural adjustment that's a lot easier than trying to train your lawyers to work as plumbers.
So the phrasing is a little odd - targeted at the populist perception perhaps - but the statement is quite reasonable.
It's possible he didn't comment on social services because that's more controversial, and he wanted something anybody could sign on to. Personally, I don't see why immigrants should need social services more than anybody else, and certainly my experience from Canada is that they don't, but perhaps the U.S. has different demographics.
... Ami.
Personally, I don't see why immigrants should need social services more than anybody else, and certainly my experience from Canada is that they don't, but perhaps the U.S. has different demographics.
There are two ways a system can be drained: overuse or underfunding (or a combination of the two). Assuming illegals need no more social services than anyone else (debatable, but we'll go with it), consider how various systems are paid for. Schools, very typically, are funded through property taxes. Since illegals tend to have significantly more people to a home, they are underfunding educational services they consume. Unpaid emergency health services (hospitals are required to treat all emergency situations, regardless of the person's ability to pay) are typically paid through income and/or (more rarely) sales taxes. Illegals pay their share of sales tax, but since significantly fewer pay income taxes, they're underfunding healthcare.
Perhaps the solution to that is to change the funding mechanism, and I'm all for the FairTax (HR 25) as a better and more equitable way to do so. However, as is, illegals are draining the system via underfunding it.
Richard: You're using the term "illegals" instead of "immigrants". If the problems you mention are largely due to the illegal status of these people then you're making a very strong case as to why they should be made legal.
Overall your points seem to be more about rich vs. poor than immigrants vs. native born residents. I think you are making two leaps: 1) you assume that immigrants are poor, 2) you assume that poor people are a net drain on the economy.
I think both claims are questionable. Again, I don't know much about U.S. demographics, but I know that in Canada we have immigrants from accross the social spectrum. Many are poor, some are rich, most are somewhere inbetween. Many arrive poor and die rich - which is certainly a great thing.
The assumption that poor people are a net drain on the economy is also questionable. It suggests that if all the poor people in your country left, you would be better off. Nevermind that somebody will still need to stock the shelves at Walmart or serve you your hamburgers. What would happen to your standard of living if those people just disappeared?
... Ami.
Hi Ami,
I don't think immigrants need social services more than other groups. (That may not be true due to family sizes and birth rates, but I don't have enough data to comment there.) But as Richard hinted, the illegals don't appear to be paying thier share of the load.
One of the biggest complaints in areas with high illegal populations is that hospitals can no longer afford to operate, schools are underfunded, and welfare roles are excessive. Again, I don't have real data on this so can't comment on perception vs reallity, but it is a widespread perception.
And I understand that additional people (especially those who work) create their own employment demand to some extent. I just thought the statement was too simplistic and a bit missleading. It would have been better if he had explained it in your terms. (I'm not a real believer in the "immegrants steal our jobs" or "immegrants lower our wages" mantras. I'll leave those arguments to protectionists.)
In fact I want people who are willing to work to come here. People who work hard always improve an area (if you notice, most of my themes involve people working and supporting themselves and their families). I want a system that allows us to know who's coming in, encourages them to come here legally, pay their share of taxes, and contribute to our country rather than being a siphon of our resources.
Ami,
The legal vs illegal perception is based on the belief that illegals free ride off the system and legals don't. I've heard annecdotal stories from legal immegrants that claim to have been in the same hospital with illegals. The illegals receive similar treatment (or better treatment) and paid nothing. The legals had to pay for their medical bills.
You're right, it's a good reason to encourage legal immegration.
On NPR yesterday, I heard an article about chinese ilegal immegration (I think within China, but still illegal). There the illegals are not permitted to use the schools or hospitals.
As for immegrants being a drain-- I believe the US give preferntial immegration papers to those who can show they are able to earn a living --advanced degrees and the like. Therefore, our illegal immegrants have less ability to make a living, especially in the semi-skilled and skilled areas. In my area, they pick mushrooms. They tend to be a drain as they cannot get insurance and have larger families and therefore need to use the school systems more.
Most of these issues would be solved by eliminating the illegal aspect and improving the efficiency our school systems.
Richard: You're using the term "illegals" instead of "immigrants". If the problems you mention are largely due to the illegal status of these people then you're making a very strong case as to why they should be made legal.
Yes, I'm focused on their status. I favor making immigration easier and faster, but there must be a process, and granting immediate legal status is an insult to those who are waiting in line and who have gone through that line. It also encourages ignoring laws you find inconvenient. I don't mind allowing the illegals already in this country to enter a process towards citizenship, but it should be longer, harder, and more expensive than if they applied in their home country.
Overall your points seem to be more about rich vs. poor than immigrants vs. native born residents.
No, it's about contributing your assigned share of the burden vs not. I understand that every gov't service is paid by pooling resources, and that different income levels contribute different amounts. The illegals aren't contributing their full portion as assigned by lay, and that drains the system. In addition, they send large portions of their income back to their home countries, to the tune of some $20 billion just to Mexico.
I think you are making two leaps: 1) you assume that immigrants are poor, 2) you assume that poor people are a net drain on the economy.
1) I make no such assumption, which is why I've discussed illegals as opposed to immigrants. 2) That's a tough question, and I'm not sure whether that's the case or not. I won't assume something I'm not sure of.
Nevermind that somebody will still need to stock the shelves at Walmart or serve you your hamburgers. What would happen to your standard of living if those people just disappeared?
Not as much as you think, and here's why. Innovation and automation will compensate. To a certain extent, it already has, and necessity would speed it along. There would certainly be a period of adjustment (several years, likely), but adjust it will. You'll place your order on a touch screen, your order will be prepared by a machine, and a conveyor belt will deliver the product. Low amounts of product will alert the machine to acquire more product, and so on.
Stryker, I would have thought the US encourages more people with advanced degrees as well, but my (limited) understanding is that they cap the numbers of "skilled" labor below the level of "unskilled" that are allowed to immigrate. I don't have access to the laws concerning immigration, so I can't illustrate it.
Stryker: China has (or used to have - I know they were planning to eliminate it, but I don't know what the current situation is) restrictions on migration within China.
In some ways it makes sense. The relatively wealthy coastal cities are almost like a different country from the poor rural areas, and the crush of migrants could be too much. We're talking about potentially far greater volumes than you currently get from Mexico.
But the Chinese are aware that restricting migration reduces economic efficiency. Some older material I was reading suggested that they planned to eliminate the barriers by 2006. I don't know if that's still going ahead.
It could be a tough balance. You want people to move to follow work, but at a speed that the infrastructure can accomodate.
... Ami.
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