March 4th, 2017

Excellent article on immigration

And the article is in the Times, of all places, although it’s not by one of their reporters. It’s an op-ed by economist George Borjas, and here’s an excerpt:

Inevitably, immigration does not improve everyone’s well-being. There are winners and losers, and we will need to choose among difficult options. The improved lives of the immigrants come at a price. How much of a price are the American people willing to pay, and exactly who will pay it?

This tension permeates the debate over immigration’s effect on the labor market. Those who want more immigration claim that immigrants do jobs that native-born Americans do not want to do. But we all know that the price of gas goes down when the supply of oil goes up. The laws of supply and demand do not evaporate when we talk about the price of labor rather than the price of gas. By now, the well-documented abuses of the H-1B program, such as the Disney workers who had to train their foreign-born replacements, should have obliterated the notion that immigration does not harm competing native workers.

Over the past 30 years, a large fraction of immigrants, nearly a third, were high school dropouts, so the incumbent low-skill work force formed the core group of Americans who paid the price for the influx of millions of workers. Their wages fell as much as 6 percent. Those low-skill Americans included many native-born blacks and Hispanics, as well as earlier waves of immigrants.

But somebody’s lower wage is somebody else’s higher profit. The increase in the profitability of many employers enlarged the economic pie accruing to the entire native population by about $50 billion. So, as proponents of more immigration point out, immigration can increase the aggregate wealth of Americans. But they don’t point out the trade-off involved: Workers in jobs sought by immigrants lose out.

They also don’t point out that low-skill immigration has a side effect that reduces that $50 billion increase in wealth. The National Academy of Sciences recently estimated the impact of immigration on government budgets. On a year-to-year basis, immigrant families, mostly because of their relatively low incomes and higher frequency of participating in government programs like subsidized health care, are a fiscal burden. A comparison of taxes paid and government spending on these families showed that immigrants created an annual fiscal shortfall of $43 billion to $299 billion.

Even the most conservative estimate of the fiscal shortfall wipes out much of the $50 billion increase in native wealth. Remarkably, the size of the native economic pie did not change much after immigration increased the number of workers by more than 15 percent. But the split of the pie certainly changed, giving far less to workers and much more to employers.

Please read the whole thing. Borjas came here from Cuba as a child, by the way.

8 Responses to “Excellent article on immigration”

  1. n.n Says:

    Immigration should not exceed the rate of assimilation and integration.

    Illegal immigration, by the millions, is evidence of problems at the origin, and is a sponsor of corruption at the destination.

    Catastrophic anthropogenic immigration reform is a cover-up of catastrophic anthropogenic climate change caused by social justice adventurism in elective regime changes, extrajudicial trials, and delegated responsibility.

    The abortion industry and [class] diversity institutions have a conflict of interest when partnering with anti-native, pro-immigrant factions.

  2. Geoffrey Britain Says:

    The Left has weaponized immigration, both legal and illegal immigration. The Right must regard it as a weapon being used against America and treat it as such.

  3. andy weintraub Says:

    Your excerpt of the Borjas article is good as far as it goes. But in focusing on employment and the labor market, it ignores the consumer product market where lower prices contribute to increasing the real incomes of all consumers, not just the ones producing the goods.

  4. Frog Says:

    I disagree with weintraub’s unsupported thesis, which can be summarized as saying that wide open borders will enrich all consumers. Patently absurd.
    I believe Borjas, who I believe has done his homework.

  5. Manju Says:

    Frog & Andy Weintraub:

    Borjas does believe that low-skilled immigration benefits Americans as a whole…for the reasons Andy stated: lower labor costs translate to lower prices which translates into an increase in the real income of Americans as a whole.

    But:

    1. The increase is very small.

    2. More importantly, the distribution is uneven. Or, low-skilled immigration puts downward pressure on the income of the native poor.

    In other words, he’s making an income-inequality argument.

  6. AesopFan Says:

    Sometimes you can find truth even in the Times.

  7. parker Says:

    There is an income inequality argument. Illegals lower wages, especially in the construction sector. They are paid in cash, often 5 bucks an hour instead of 15 or 20 bucks per hour. They pay no taxes and remit perhaps half of that to their home country. The unethical employer in their bids factor their labor costs at 7 or 8 bucks per hour and pockets the rest.

    Nice scam that puts American citizens out out the roofing, repair, remodeling, concret work, etc job market. Meanwhile the illegals receive food, medical, rent assistance. Their kds get free education; while the legal resident construction worker is on the unemployment line.

  8. blert Says:

    parker Says:
    March 4th, 2017 at 11:23 pm

    Bingo.

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