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Immigration Is Good For The Economy

by @ 2:48 pm on June 21, 2007. Filed under Economics, Immigration

Contrary to the argument made by most immigration opponents, it seems that immigration actually raises wages for workers as a whole:

Immigration has a positive impact on the U.S. economy and boosts wages for the vast majority of native workers, though there are “small negative effects” on the earnings of the least-skilled Americans, according to a report the White House issued yesterday.

The report, a review of economic research prepared by the president’s Council of Economic Advisers, concludes that foreign-born workers have accounted for about half of labor force growth in the past decade, fueling overall economic output, creating jobs and increasing earnings for native-born workers by as much as $80 billion a year.

Immigrants and their children also have a “modest positive influence” on government spending, the report says, contributing about $80,000 more per person in tax dollars over the long run than they claim in government benefits and services.

The report directly challenges attacks on President Bush‘s proposal to overhaul immigration laws. His measure would link beefed-up border security and a crackdown on employers who hire illegal immigrants to provisions granting legal status to the 12 million illegal immigrants already in the country. It would also create a guest-worker program sought by business and shift the emphasis of immigration policy from family ties to job skills and education.

(….)

Foreign-born workers make up 15 percent of the U.S. labor force, with large concentrations at the top and bottom of the education scale, the report says. For example, immigrants make up 36 percent of workers who lack a high-school diploma and 41 percent of scientists with doctoral degrees.

As a group, immigrants earn 77 cents on the dollar compared with native workers, though that gap largely disappears among college graduates.

More than 90 percent of native workers benefit from the influx of low-wage labor because immigrants take jobs that complement higher-paid native workers rather than competing with them, according to the report. For example, [Council of Economic Advisers Chairman Edwin P.] Lazear said, immigrant roofers lower costs for contractors and home-builders, creating jobs for plumbers and electricians and lowering the price of houses for consumers.

That’s the side of the immigration debate that the nativists don’t want you to think about. Kick out all that cheap foreign labor and the cost of everything from your new house to the lettuce at the grocery store goes up. Not to mention the revenue lost to businesses who benefit from the wages that immigrants earn.

But this shouldn’t be surprising. It’s the same thing that happened in the late 1800’s when Eastern Europeans started coming in large numbers. People complained they were taking away jobs from “real Americans” and, you know, they dressed weird and spoke in those funny foreign languages. And it’s the same thing that happened when the Irish arrived here, and the Italians. The only difference this time is that the immigrants are closer and they don’t need to get on a ship to get here.

And, oh yeah, they dress weird and speak a funny language.

Originally posted at The Liberty Papers

7 Responses to “Immigration Is Good For The Economy”

  1. Darkmage says:

    Well, that’s nice.

    Now, re-run those numbers focusing on illegal immigration and see how they turn out.

    The objection to the legislation currently working its way through Congress is not about “them durn furriners”, it’s not a racist reaction or some deep-seated fear of losing “the American Identity” or whatever buzzword phrase is being passed around. If people want to come here and work, fine. Get in line.

    But the outrage is against amnesty for illegal immigrants and the costs they impose on our country. This nativist claptrap is a strawman argument.

  2. Legal or illegal, it doesn’t matter.

    Do you really think that there wasn’t illegal immigration when the Europeans were coming here ?

  3. Darkmage says:

    It doesn’t matter?

    Well, I suppose if you’re just trying to demonize your political opponents, the difference is trivial. They disagree with you, who cares if you can’t represent their arguments accurately?

  4. It doesn’t matter because there is no evidence that the economic impact of “illegal” immigration is any different from the economic impact of immigrants who come here legally.

    To be fair, personally I think that current immigration laws are far too restrictive and that the bureaucracy that one must navigate to immigrate legally is far too cumbersome.

    Do I think that immigrants should be entitled to welfare or free health care ? No, but I also don’t think that the government should be providing things like that to American citizens.

  5. Darkmage says:

    Let me get this straight… illegal immigrants get paid less, don’t pay most of the taxes legal residents do, fill our jails & hospitals… and you claim there is no difference between legal and illegal immigration in economic impact?

  6. And if they were legal they’d be paying taxes wouldn’t they.

    There is also little evidence for the proposition that illegal immigrants commit crime at a greater rate than citizens or legal immigrants.

    And even if you’re right, a large part of that “economic impact” would be eliminated if they were allowed to become legal.

  7. Darkmage says:

    Not only would they be paying taxes, they’d also be paid more as they would have more incentive to go after employers who underpay them now.

    Look, the second they stop being illegal aliens, they lose what makes them attractive to businesses: you can screw them out of wages. Additionally, they suddenly qualify for all the social system perks that they previous did not qualify for (although some states have let them qualify for those benefits anyway). The economic impact to this country is going to be significant as employers’ costs go up and their workers’ pay goes up. Existing social safety nets are going to have more customers.

    It certainly seems like we’re going to get screwed both ways here: We lose the economic benefit to businesses who can no longer exploit cheap labor AND we get millions of newly qualified recipients of state social programs.

    You and I definitely agree on one thing: the differences between the legal and illegal immigrant economic impact will be rendered moot if amnesty goes through. At that point, they’ll all be legal so we can wrap them all in one happy bucket.

    (oh, make that two things – I don’t think the gov’t should be providing those services either)

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