An Economic Argument for Immigration
There was an excellent editorial written in the Wall Street journal today about some of the economic considerations for the current immigration debate. It provides excellent insights into globalization, and pricing of labor. Read the entire thing if you get a chance: Jobs Americans Won’t Do [subscription required]
Some excerpts:
…Certainly if we could somehow seal the border — and good luck with that — the market would adjust to the shrinking supply of labor; wages and prices would adapt. The country could survive without foreign labor in the same way we cope with shortages of steel, or sugar for that matter. But economics is about trade-offs. So the real question isn’t whether living in a closed economy is possible. It’s whether the U.S. is better off moving in that direction.
…a closed economy ultimately would make America a less competitive and hence poorer country — because we’d have less human capital, and because we’d be using the human resources we did have less efficiently. Among higher-skilled and -educated workers, pulling away the U.S. welcome mat means all of that talent would go to work creating wealth and jobs in other countries.
…Immigrants also increase the demand for labor, not just the supply. That is, they are also consumers who create jobs by buying goods and housing here. Former Federal Reserve Chairman Alan Greenspan often pointed out how immigration has been driving housing demand. And if immigrants really were “stealing” American jobs, we wouldn’t have had the remarkable job growth of recent years.
…Eliminate the immigrant labor force and these jobs don’t — presto! — start paying more to attract Americans. In a global economy, they’re much more likely to disappear or move overseas as domestic employers find themselves less able to compete with foreign producers. And many of the same politicians who complained about “cheap” immigrant labor would then want to block the import of products that were once made here.
Businesses can’t raise wages or prices willy-nilly without respect to the ability and willingness of consumers to pay for a good or service. The agriculture industry certainly would attract more Americans if it paid $50,000 a year to pick lettuce in the noonday sun, but not without raising the cost of food and other things. It would be more expensive to eat out, for example, and fewer people would do so as a result, affecting the restaurant industry, among others.
…Mr. Bush also understands that immigrants play a key role in growing the U.S. economy, which doesn’t exist in a vacuum and shouldn’t have an immigration policy that pretends otherwise. The problem is not that 11 million foreigners are here working. The problem is that they’re here illegally. Efforts to close off future flows, or deport illegal aliens already here en masse, would do economic harm to all Americans, both low- and high-income. Let’s hope the Congress figures that out as well.
The latest compromise in Congress does not require the deportation of most of the current illegals, as well it shouldn’t.
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April 12th, 2006 at 12:20 pm
This article still does not address the fundamental issue…how can we justify allowing illegal immigrants to break the law and receive citizenship rights, while denying those same rights to so many who try to enter this country legally? Why not streamline the immigration process, increase quotas, close our borders to prevent illegal immigration, and severely punish companies who use illegals? I have obviously offered up an oversimplified solution, but you get the general idea. It’s not a matter of economics or xenophobia, it’s a matter of the Rule of Law. And from the reaction of many of our politicians, they just don’t give a hoot.
April 13th, 2006 at 11:45 pm
What do you do with the millions of illegal immigrants already here? In an ideal world we just send them back to the country they came from and start with a clean slate, but the costs of doing that would be enormous and for how much benefit? So do we continue to ignore the fact that there are 10-20 million of them? Or just continue to call them illegal yet turn our heads? How do you collect taxes from them to help pay for the public goods like roads or hospitals that they use?
I agree with your points, but it’s a much more complex issue. It’s not that politicians don’t give a hoot, it’s that they’re faced with tough decisions. Streamline immigration - how? Close our borders - how? Punish companies - how? I mean, what’s the compromise? How do you deal with the current situation of illegals without breaking the Rule of Law for the legal immigrants? And do the legal immigrants care?
April 19th, 2006 at 3:31 pm
Streamline immigration - how?
Good question. Let’s take a look at the process that can take legal immigrants months and even years to establish residency, obtain visas, etc. Has anyone invested time and effort into examining the process? Can’t this be a potential solution?
Close our borders - how?
That’s an easy one. Deploy the national guard, build walls or fences in places where illegal crossings are numerous, etc, etc, etc.
Punish companies - how?
Another easy one. Attach severe fines to any employers who employ illegal immigrants. Make them responsible to verify legal status.
The fact remains that many politicians (as well as small business owners) WANT illegal immigrants here.
By the way…how does enforcing immigration laws take away from legal immigrants? By making them show their green card? I have to show my driver’s license and provide a valid social security number anytime I want a job. Is that a violation of the Rule of Law?
As for the 11 million illegal immigrants in our country, what do you do? Do we grant them amnesty like we did back in 1986? You can tell that policy discouraged illegal immigration real well. Part of the answer is that there must be some sort of consequence (not necessarily immediate deportation) for breaking the law AND in no case should an illegal immigrant’s path to citizenship be easier than those trying to enter this country legally.