Confluence | Oct 4, 2019 | 0
Vox: Immigration makes America great
Reading Time: 15 minutes
Source: Vox – Confluence Daily is your daily news source for women in the know.
The Trump administration announced Monday a long-rumored regulatory change designed to make it easier to deny entry to the country to potential immigrants who are likely to earn low wages and potentially be eligible for social safety net programs.
This is part and parcel of a broad Trump-era crackdown against immigration of all kinds — record-low refugee resettlement numbers, clampdowns on asylum-seekers, tighter rules for high-tech guest workers, fewer student visas, fewer work permits for spouses of legal immigrants, and a legislative proposal that would cut legal immigration levels in half.
It’s a vision that stands in stark contrast to the immigration stance of George Washington who embraced a vision for an open America that could almost be read today as a form of deep idealism or altruism. “America is open to receive not only the opulent and respectable stranger, but the oppressed and persecuted of all nations and religions,” he told newly arrived Irishmen in 1783. He assured them they’d be “welcome to a participation of all our rights and privileges, if by decency and propriety of conduct they appear to merit the enjoyment.”
But Washington’s vision wasn’t primarily about charity or helping others. It was about building the kind of country that he wanted the United States to become. Greatness would require great people. America would need more than it had.
The contemporary debate around immigration is often framed around an axis of selfishness versus generosity, with Donald Trump talking about the need to put “America first” while opponents tell heartbreaking stories of deportations and communities torn apart. A debate about how to enforce the existing law tends to supersede discussion of what the law ought to say.
All of this misses the core point. Immigration to the United States has not, historically, been an act of kindness toward strangers. It’s been a strategy for national growth and national greatness.
Washington and his fellow founders could have established America as a kind of exclusive club. The present-day United States undoubtedly would still be a prosperous and pleasant nation. But our cities would be smaller, our global influence would be reduced, and many fewer of the world’s cutting-edge companies would be based here. We would suffer, as small countries tend to, from our talented and ambitious young people seeking their fortunes in bigger places abroad. With many fewer people, it wouldn’t be the great nation it is today.
While a lot has changed since Washington’s time, two fundamentals have not. The United States is still a country with a mission and a desire for greatness on the world stage. And America’s openness to people who want to move here and make a better life for themselves is fuel for that greatness.
Few of our problems can be solved by curtailing immigration. Many could be solved by welcoming more foreigners to our shores.
People are the fuel for growth and wages
The main sources of immigration — and the main occupations likely to employ immigrants — have changed over time, but the story has been the same from the beginning. A larger and more diverse population supports more intensive development of the resources available and a more complex division of labor, leading, over time, to a steadily more sophisticated and prosperous national economy.
A lone person on an island by himself will struggle to get by even if he is surrounded by natural abundance. A small band would live at a subsistence level. To achieve true affluence, people need to be able to specialize and trade with one another. To an extent in the modern world, that means access to global markets — grain can be shipped to Europe and timber to Japan. But for most people, it means direct access to other people, who serve as customers and co-workers and suppliers.
Lionel Fontagné and Gianluca Santoni find that heavily populated areas offer higher labor productivity and higher pay because “denser commuting zones seem to offer a better match between employers and employees.” The more people there are around, the more different kinds of businesses you can have and the more finely specialized they can be, meaning it’s more likely that any given person will be well-suited to work at someplace or other that’s in town. This is in some ways most obvious at the routine retail level — big cities have specialty shops and very focused restaurants rather than general stores and generic diners — but research by Jason Abel, Ishita Dey, and Todd Gabe finds that the positive impact on density on productivity is especially true in knowledge-intensive industries.
Those findings are not immigration-specific, but the beginning of wisdom on immigration policy is that immigrants are people.
And, indeed, when you take the foreigner element out of it, most people correctly grasp that depopulation is not an economic growth strategy. Texans — often especially the most conservative ones — brag about how many people move there from other states, fueling the growth of dynamic metropolitan economies. When people have children, it, of course, imposes a short-term cost on the local educational system. But it also builds the long-term future of the national community.
By the same token, there is a fairly firm consensus that immigration raises incomes on average for native-born workers. When the University of Chicago’s Booth School surveyed a panel of well-known academic economists, for example, 52 percent agreed that admitting more low-skilled immigrants to the United States would make the average US citizen better off. Just 9 percent disagreed. The panel agreed that more highly skilled immigrants would be good by an even more overwhelming 89-0 margin.
This is not, incidentally, because an increase in the labor supply has no adverse effects for anyone. Rather, as Heidi Shierholz of the liberal Economic Policy Institute emphasizes in her overview of the literature, it’s that “earlier immigrants are the group that’s most adversely affected by immigration” because they are the people whose skill sets are most likely to put them in direct competition with new immigrants. Across a range of estimates, the effects on wages “tend to be very small, and on average, modestly positive.”
That’s because, as Michael Greenstone and Adam Looney of the center-left Hamilton Project put it, “immigrants and U.S.-born workers generally do not compete for the same jobs; instead, many immigrants complement the work of U.S. employees and increase their productivity.”
If a bunch of new monolingual Spanish-speaking construction laborers move to town, in other words, that probably is bad news for the monolingual Spanish-speaking construction laborers — mostly immigrants — who are already there. But the presence of those laborers in town will create job opportunities for people to manage them, likely native-born workers who speak English. And by increasing the number of construction projects that are undertaken, they increase the demand for more skilled tradespeople — plumbers, electricians, and others whose work is complementary to that of more generic laborers.
Immigration bolsters the federal budget
Immigration skeptics often pivot from the basic terrain of labor market economics to the notion that immigrants — especially the dreaded illegal ones — are a drain on public resources. Donald Trump went so far as to repeatedly claim on the campaign trail that undocumented workers are actually receiving more generous public services than America’s veterans.
This idea plays a critical architectural role in holding together the political coalition of contemporary conservatism — selling the idea that tax cutting is compatible with financial support for the elderly because there will be plenty of money for everyone once we get rid of the foreign-born leeches.
But it’s completely false. Unauthorized workers receive few if any public services (they ride the bus, but they’re ineligible for social assistance programs) but contribute to the tax base. Indeed, since people living and working in the United States illegally are often paying Social Security taxes without collecting benefits, they are in some ways the great heroes of the US Treasury.
For the immigrant population at large, the best research on the fiscal impact of immigration comes from the National Academies of Sciences, Engineering, and Medicine, which concluded that over the course of a 75-year time horizon, “the fiscal impacts of immigrants are generally positive at the federal level and generally negative at the state and local level.” Immigrants, in other words, pay more to the federal government in taxes than they receive in benefits, while the reverse is true for state and local governments.
This adverse impact on state and local governments is important, and derives largely from the fact that immigrants have kids who end up needing to go to school. The good news is that those kids grow up to be second-generation adults who “contribute the most of any generation to the bottom line of state balance sheets.”
The bigger picture is that the long-run structure of the American welfare state, which is heavily focused on providing health care and retirement security to the elderly, requires a growing population and economy. Immigrants contribute to both goals, directly through their presence in the country and indirectly by raising children. Indeed, it’s striking that even an immigration skeptic like George Borjas concedes that immigrants grow the economy and do not personally obtain 100 percent of the benefits of that growth — meaning their presence increases the overall level of resources available to the native population.
Immigrants commit crimes at a lower rate
Immigrants may build American prosperity, but there’s more to life than economics. For Trump, the central mode of anti-immigrant rhetoric has always been a more visceral fear of violence, from his initial warning of an incoming flood of Mexican rapists to the various efforts to limit Muslims’ ability to travel to the United States. He’s even issued an executive order mandating the creation of a new federal bureaucracy, VOICE, with the specific mission of publicizing crimes committed by immigrants.
“We are providing a voice to those who have been ignored by our media and silenced by special interests,” he told a joint session of Congress.
To the extent that you want to whip people into an anti-immigrant fervor, it’s a good idea. There are millions of foreign-born people in the United States, and naturally every day some of them are caught committing crimes. Indeed, because immigrants are younger on average than native-born Americans, they commit a somewhat disproportionate share of crime.
But as Bianca Bersani of the University of Massachusetts has shown, on a year-by-year basis, young immigrants are much less likely to be involved in criminal activity. Indeed, the great trajectory of immigration and crime is that second-generation youth — kids whose parents were born abroad — largely assimilate to US behavior norms rather than maintaining the better behavior of their foreign-born parents.
“Born and socialized in the U.S. mainstream,” Bersani writes, “second-generation immigrants are simply native-born youth.”
There is a very real social problem of youth crime in the United States — especially because the widespread availability of guns makes American crime much deadlier than crime in Europe or Asia — but immigrants contribute to it only in the sense that they add to the overall population. On a per-person basis, immigrants are better-behaved than natives and immigrants’ kids are worse-behaved than their parents because they learn to act more like Americans.
Immigration-skeptical experts are rare and eccentric
No issue in economics is entirely unanimous, and because immigration is a contentious issue in partisan politics, it sometimes leads the media to overplay the extent of expert disagreement about the economics of immigration. Consequently, the work of George Borjas, a Harvard Kennedy School professor who has produced the bulk of the research dissenting from the optimistic consensus, tends to play an outsize role in the media landscape.
His work, summarized for an expert audience in his 2014 book Immigration Economics and for a popular audience in his 2016 book We Wanted Workers, is an outlier in both its conclusions and its methodology.
One big difference, as UC Berkeley’s David Card and UC Davis’s Giovanni Peri point out in their review of Immigration Economics, comes down to the annoying technical question of how you should measure the number of immigrants in a given labor market. A naive way to make the case for immigration would be to do something like note that the list of states with the smallest foreign-born population is led by West Virginia and also includes Mississippi, Kentucky, and Alabama in the bottom 10. Immigrant-heavy states such as California, New York, New Jersey, Maryland, and Massachusetts are much more prosperous.
The problem here, of course, is that while it’s possible that West Virginia is so poor because no foreigners move there, it’s equally likely that no foreigners move to West Virginia precisely because it’s poor. A reasonable economic study needs to look at change over time, in both the number of immigrants and labor market outcomes for the native-born.
Most researchers do this by studying the correlation between the change in the number of immigrants and outcomes for the native-born. What Borjas studies, instead, is the change in the immigrant share of the labor force and outcomes for the native-born. Card and Peri argue that this essentially overcorrects for the West Virginia problem. If lots of immigrants move somewhere (to, say, Texas), and that increases the demand for native-born workers, thus inducing a lot of native-born Americans to also move there, Borjas would say that doesn’t count as an example of immigration boosting the economy, because the immigrant share of the local labor force didn’t rise. If you switch to measuring the raw number of immigrants, the bad labor market outcomes he finds disappears.
As Noah Smith writes, “the weight of evidence is against Borjas, and many of his methods also tend to look a bit shaky when subjected to careful scrutiny.” If you have some freestanding non-economic reason to want to limit immigration and want to convince yourself it’s also a good idea in economic terms, those ideas are out there. Similarly, if you’re a politician who’s convinced your constituents want you to vote for fewer immigrants and are casting around for a good reason, Borjas is there for you to cite. But his findings are outliers based on an unusual methodology.
Immigration enriches culture and expands options
Wages are easy to measure, so many studies focus on them for the sake of methodological simplicity. But there is more to life than cash wages, and studies show that immigration has significant indirect benefits.
One example is what Michael Clemens, Ethan Lewis, and Hannah Postel found when they looked at what happened in the 1960s when the United States decided to eliminate Mexican guest workers from America’s agricultural labor force. These guest workers, called braceros, were heavily present in some states, like Texas and California. Other states, such as Georgia and Wisconsin, had a few braceros. Some had no braceros whatsoever. By comparing wage trends in high-exposure, low-exposure, and no-exposure states, they were able to show that kicking out the guest workers had no real impact on farm wages.
That doesn’t mean the laws of supply and demand were magically repealed. It means that landowners changed their strategy. For some crops, like tomatoes and sugar beets, producers were able to switch to more mechanical harvesting techniques — compromising on quality in the case of tomatoes.
For other crops — including asparagus, fresh strawberries, lettuce, celery, and cucumbers, for example — mechanization techniques were not available, and production simply fell. Wages did not rise; instead, Americans learned to live with reduced produce variety.
This same variety impact exists on the retail and service side of the economy as well. If you visit a place with few immigrants from Mexico — France or Fargo or what have you — you don’t find that taqueria workers are earning vastly more money than their counterparts in Texas. You find that there are few good places to buy tacos.
This isn’t the end of the world, any more than an asparagus shortage would be an acute social crisis, but that’s exactly why eliminating foreign-born workers doesn’t boost wages. People simply make do without the variety that immigrants provide.
Peri and co-author Gianmarco Ottaviano find that the value of increased cultural diversity of this sort can be partially measured through higher housing values in more diverse cities — people are willing to pay more for the amenity value of ethnic food — but will miss the extent to which a nationally rising tide lifts all boats.
The debate is about immigrants, not skills
A common rhetorical move in the United States is to argue that the problem with the current American system is that green card issuance depends too heavily on having relatives in the United States, rather than on having a job offer or labor market skills. The Trump administration has taken to calling the alternative, which they feel to be in place in Canada and Australia, a “merit-based” system.
This “merit” language is, for starters, an incredibly offensive and reductive way to think about human beings. Indeed, one suspects that Trumpniks would be the first to object if I were to refer to the Republican Party’s base of whites without college degrees as lacking “merit.”
What is true is that since people with more degrees — and especially people with degrees in technical subjects — earn above-average incomes, highly educated immigrants have a more positive budgetary impact than less educated ones. Altering American immigration policy to put more weight on in-demand skills, educational credentials, and ability to either attract above-market salaries or work in a field where expanding the size of the workforce is deemed socially desirable is a perfectly reasonable proposal.
At the same time, it would be a mistake to see this as the genuine core of the contemporary immigration debate.
Back in 2013, for example, Rep. Darryl Issa (R-CA) introduced the SKILLS Act, which would have limited the existing “diversity visa” program and replaced it with a skills-based program that would have increased the total number of immigrants in the United States. The Congressional Budget Office score confirms that shifting policy in this direction is a fiscal winner, but no Democrats would support SKILLS, viewing it as a poison bill designed to undermine the then-ongoing quest for comprehensive immigration reform. More tellingly, it only had 22 co-sponsors in the House, and even though it passed the Judiciary Committee, it was never brought to the floor for a vote. It was not reintroduced in the next Congress, nor has it been reintroduced this Congress.
The Trump administration, meanwhile, is already acting to curtail guest worker visas for skilled technical workers. Steve Bannon, who appears to be the administration’s point man on immigration issues, has long been suspicious of economically successful immigrants.
What’s more, whether or not you see a strong case for switching to a more skills-oriented system, America’s current immigration laws already make it so that newly arrived immigrants are better-educated than the native-born population.
Last but by no means least, even “unskilled” immigrants serve to increase the supply of skilled labor through their work in the household sector. Patricia Cortes and Jose Tessada find that cities with larger numbers of less skilled immigrants see higher labor force participation and more hours worked by highly skilled women, who hire more hours per week of maids, nannies, and cooks, allowing them to shift their labor efforts out of unpaid home production and into market work. Immigrants who do work mowing lawns, cleaning pools, and other household activities likely have a similar impact.
Immigration’s enormous benefits to immigrants is relevant
It bears mentioning, even in an “America first” mood, that immigration carries extremely large benefits for immigrants themselves.
Indian computer programmers who come to the United States on H-1B guest worker visas, for example, see their earnings increase by a factor of five or six. That’s an extraordinarily large benefit, and yet in the broader picture of immigration economics it’s a relatively small one. Computer programming work, after all, can in principle be done remotely. Clemens finds that less skilled workers can obtain wage gains of tenfold or more by moving from poor countries to rich ones.
These enormous benefits matter in part because foreigners are still human beings whose lives and interests ought to count for something in our calculus.
In other words, to the extent that there is reason to believe restricting the ability of some class of immigrants to enter the United States will have some benefits to some set of native-born workers, it’s worth considering that keeping a potential worker out of the United States is an extraordinarily costly measure to take. Something much milder, like making employers of foreign-born workers pay an extra payroll tax, with the money used to plug the Social Security funding gap or subsidize low-paid workers’ wages, would leave absolutely everyone better off.
The benefits to immigrants are also relevant because the economy is not a fixed pie. If an Indian-born computer programmer moves to the United States and quintuples his income, he is much more likely to buy an American-made car than if he were stuck in Asia earning a dramatically lower income. Growing exports of American manufactured goods has become an obsession, but increasing domestic sales has the exact same benefits. Bringing the customers to our shores makes them easier to reach, and massively increasing their incomes massively increases their ability to buy things.
Immigrants are integral to American greatness
Last but by no means least, while it’s certainly true that Americans care about the average well-being of American citizens, we also care about something else — greatness, for lack of a better word.
In per capita income terms, the United States has, by most measures, been overtaken by Switzerland. The Netherlands is relatively close behind, and when you consider inequality and quality of public services, the typical Dutch person may well enjoy a higher standard of living than the typical American. This kind of thing matters. But at the same time, there is a reason that when Americans feel anxiety about national decline, they tend to think of China and not Switzerland. The Netherlands is a great place to live, but it hasn’t been a great nation since the early 17th century.
Aggregates matter, in other words.
If Americans had listened to the counsel of the Know-Nothing movement in the 1850s and drastically curtailed immigration from outside of Protestant Europe, it would probably still be a rich country today. But it would be a very different kind of rich country from the one we know — one with fewer, smaller cities mainly focused on exporting agricultural goods and other natural resources to the wider world. A place more like Canada or a supersize version of New Zealand, rather than an industrial and technological powerhouse that intervened decisively in two world wars and anchored a coalition of liberal states to defeat communism.
Going forward, demographers forecast that immigration — both the people it provides directly and the children that immigrants bear and raise — is the only reason America’s working-age population isn’t declining. This is doubly true when you consider that immigrants’ work in the household and child care sectors likely serves to increase native-born Americans’ childbearing as well.
A declining working-age population, seen already in Japan and some southern European countries, poses some serious challenges to a national economy. It tends to push interest rates down to an incredibly low level, making it difficult for central banks to respond to a recession. It also makes it more difficult to sustain public sector retirement programs and elder care more generally.
There are some offsetting upsides (less strain on transportation infrastructure, for example), and, like anything else, the problems are solvable. Fundamentally, however, an America that is shrinking is a country that is going to be a lesser force in the world than an America that is growing. It’s true, of course, that an America that continues to be open to immigrants will be a progressively less white and less Christian country over time. That’s a threatening prospect to many white Christian Americans, who implicitly identify the country in ethnic and sectarian terms. But America’s formal self-definition has never been in those terms.
And for those who believe in the principles of the Declaration of Independence and the value of America’s ideals, accepting a future of decline and retreat in the name of ethnic purity should be unacceptable. That the more homogeneous America will be not just smaller and weaker but also poorer on a per capita basis only underscores what folly it would be to embrace the narrow vision. That hundreds of millions of people around the world would like to move to our shores — and that America has a long tradition of assimilating foreigners and a political mythos and civil culture that is conducive to doing so — is an enormous source of national strength.
It’s time we started to see it that way.
Confluence Daily is the one place where everything comes together. The one-stop for daily news for women.