Cato’s Center for Trade Policy Studies released a study last month on the economics of expanded immigration to the United States. Economists Peter B. Dixon and Maureen T. Rimmer use a general equilibrium model to predict how various policy changes would affect the US economy. In two of the seven scenarios examined, the federal government further cracks down on illegal immigration, reducing the number of illegal immigrants living and working in the United States. In the other five scenarios, the federal government liberalizes immigration by creating a variety of “guest worker” visas that would give more immigrants the potential to be legally-sanctioned guest workers rather than illegal immigrants.
They conclude that the two restrictive scenarios would reduce the average income of US households, while liberalization would increase the incomes of US households. And the effects are significant. Cracking down on illegal immigrants is projected to cost American households about $80 billion, while liberalization could generate as much as $180 in higher incomes for US households. I’m not an econometrician, so I can’t evaluate their economic model in any detail, but the basic logic here seems sound. One key point is that bringing new, mostly unskilled workers into the economy will create new managerial and professional jobs that will generally require the kind of experience and English fluency that most new immigrants lack. So even if immigrants exert downward pressure on the very low end of the wage scale, many native-born workers would benefit from the new opportunities created by increased immigration. Dixon and Rimmer find the net effect on American households (excluding the immigrants themselves, who obviously benefit tremendously) is positive.
So I liked the study. But there were a few parts that made me wince, especially given that it was published by the Cato Institute. In particular, the study talks about the need to “facilitate the transfer to U.S. households of part of the guest-worker surplus,” and later about the increased wealth created by migration being “extracted for the benefit of U.S. households.” To put this in somewhat blunter terms: Dixon and Rimmer are proposing to take money from the Hispanic woman scrubbing toilets for $10 an hour and transfer it to Joe the Plumber. This proposal doesn’t exactly warm my heart.
It’s not hard to understand their motivation. Increased immigration is a generally win-win proposition that’s being blocked by a nativist backlash. I assume the idea is to buy off some of those angry American voters by promising them a big chunk of the “surplus” generated by immigration reform. And as a matter of blackboard economics, this makes sense. The woman scrubbing toilets is still better off than she would have been if she’d been forced to stay in Guatamala (or even perhaps as an undocumented worker). And the American worker not only gets an opportunity to take one of those new managerial jobs that got created, but he also gets some nice government benefits to boot.
I think the problem with proposals of this sort (beyond the basic offensiveness of Robin-Hood-in-reverse schemes) is that they misread the politics of the issue. The anti-immigration movement is driven by deep and often irrational fears. The kinds of people who make hatred of “illegals” a key part of their political identity are not looking for a slightly larger slice of the economic pie, and they’re not going to be persuaded by earnest economists with complicated models.
At the same time, this kind of narrow, technocratic approach is likely to turn off some of the natural allies of broad-based immigration reform: liberals whose primary concern is for the immigrants themselves. The political left is split between liberal elites who see immigration as fundamentally a human rights issue, and a populist faction, led by the labor movement, that sees immigration as a threat to American jobs. The populists have gotten tremendous traction by arguing that immigration reform is really a conspiracy by big business to undercut the wages of American workers by importing and exploiting low-skilled immigrants. I don’t think this is true, but publishing studies focusing on the need to “extract” the fruit of foreign workers’ labor for the benefit of Americans doesn’t do much to dispel this impression.
I think a far more effective approach is to use what is probably the most powerful weapon in American politics: our now deeply-rooted and emotional commitment to the principle of equality before the law. Over the last 50 years, American society has undergone wrenching transformations that moved us toward equality for Catholics, blacks, Jews, women, gays and lesbian, and other traditionally disfavored groups. We achieved these reforms not by emphasizing how reform would benefit straight white men, or by building complex models of how oppression depressed GDP, but by focusing on the cruelty of the status quo and appealing to America’s founding ideals. We’ve now reached the point where opponents of equality for blacks or Jews are not only in the minority, but are among the most despised people in society.
I think the same strategy needs to be employed on behalf of immigration reform. The problem with our immigration laws is not primarily that they are economically inefficient (Jim Crow wasn’t efficient either). The problem is that they deny civil rights to millions of hard-working individuals based on a factor over which they have no control: their place of birth. I’m sure Dixon and Rimmer mean well, but their narrow focus on the costs and benefits of immigration to American households not only ignores powerful arguments about justice, it actually undercuts them by accepting the premise that we’re justified in ignoring the welfare of the millions of people who are in such deep poverty that they’re willing to risk their lives for the privilege of picking our strawberries and scrubbing our toilets.
Great analysis. To worry about fresh injections into the labor force “stealing American jobs” is to misunderstand what a free market really is. The great majority of individual transactions that take place are mutually beneficial. In the aggregate, this implies that productivity begets productivity. American’s aren’t harmed by immigration, they benefit from it.
Also, I assume that a scenario in which immigrant workers were given legal work status would create an immediate increase in tax revenue without a single specific rule intended to somehow “reimburse” us for “letting” them work here. Not that this is really a concern of mine, but the state always benefits financially from bringing a previously underground economy above the table. Making them legal basically invalidates the “freeloader” status that the populists on both sides of the aisle so love to apply.
(Oh and I see you have Andrew Sullivan listed on your blogroll. He’s been posting lately about a “brain drain” we’re beginning to see in this country, largely as a result of our byzantine immigration process combined with a slumping job market. A Duke study has predicted that 100,000 immigrants will return to China and 100,000 will return to India in the next 5 years. If our cultural stereotypes have any validity, a large portion of these folks are highly skilled.)
“Making them legal basically invalidates the “freeloader” status that the populists on both sides of the aisle so love to apply.”
Which I always thought was funny since illegal immigrants pay taxes on a lot for things they aren’t allowed to use. We were freeloading off them.
Hah, speak of the devil, I just saw a link to this post on Sullivan’s blog. Rubbing elbows with the big boys, eh Tim?
The CATO study contradicts the bulk of academic research on the effects of illegal immigration. Why ignore George Borjas in favor of a study from an obviously biased source? Indeed, why ignore Paul Krugman, who reluctantly (he wrote) reached the same conclusion? Illegal immigrants drain far more money from the economy than they contribute, in part because of social services like education and emergency room health care, in part because they dampen wages for labor in general and in (smaller) part because they send some of their earnings out of the country. Don’t take my word for it, but don’t take the friggin’ voice of Ayn Rand’s word for it either.
You also ignore a huge inconvenient truth: the people illegal immigrants are hurting the most are African-Americans. As Professor Carol Swain has demonstrated, not only have illegal immigrants taken “ladder jobs” traditionally used by low skilled African-Americans to climb out of poverty, they empower white racism. Or do you really think Zoe Baird and Arianna Huffington couldn’t find an African-American willing to be their well paid nanny during a deep recession?
Nor is it just economic — it’s political. Just when African-Americans were getting a semblance of their fair share of political power, illegal immigration comes along to rob it within a few generations.
But hey, middle class whites can save a few dimes on their produce and will have cheap labor to mow their lawns and clean their office buildings. Enjoy.
>>The Cato Institute is a libertarian think tank that employed me as a writer from 2003 to 2005. After I left full-time employment there, they named me an adjunct scholar, and they sometimes pay me to write for them.<<
Ahh. Never mind.
Rusty,
This is rich. Arianna Huffington hires a nanny who does not have your preferred skin color and she is the racist?
Tim you know I love you, baby. Seriously. But this is high-level bullshit.
As you know, I come from immigrant stock. Both my parents are immigrants who became naturalized Americans well into their adulthood. My parents’ two siblings are also immigrants who were naturalized as adults. Both my mother’s brother and my father’s sister married other immigrants, who were born outside the US.
For decades, literally, my father’s sister and her husband have made their home in Westchester County New York a sort of “way station” for people they’ve known from Romania who are in transit, possessing legal residency and at different points in the naturalization process.
All of this background may be extraneous, but here’s the point: my family’s prior generation is NOT made up of anti-immigrant nativist racists, and your broad-brush characterization of different types of immigration skeptics is a little offensive.
Under the constitution, and I think it’s especially relevant to concentrate on the 14th Amendment, every citizen has an equal right to life, liberty, and property, due process under the law, and privileges and immunities under the law.
Now I think you’re trying to smuggle in some natural rights and natural law principles into the Constitution that neither exist in the four corners of the text, nor are they reasonably interpolated to exist between the lines, nor do Constitutional lawyers think they exist, nor do normal Americans think they’re there. Seriously, you are taking the most radical position possible. Your insistence that this is “now deeply-rooted and emotional commitment to the principle of equality before the law” is a brazen inversion of the facts. To the extent you think that Americans hold views that basically commit them to a maximally liberal, non-discriminatory immigration policy, public opinion data invalidates that positive interpretation of Americans’ values. Indeed, you point to other groups that we now view as being previously treated unfairly and glibly assume that, by analogy, our treatment of illegal immigrants is morally parallel to those situations we now regret.
That there is a fundamental difference between what we owe to citizens and to non-citizens is hair’s breadth from being tautological. The American government has fiduciary duty to its citizens who are its voters, taxpayers, and comprise its armed forces. It has no such fiduciary duty to every other person in the world. It is a central liberal idea that the government is an agent of (“works for”) the people. The people in question are, pace some ahistorical utopian fantasy, the members of the democratic polity. Given that the modern development of liberalism has deeply incorporated the idea of “social citizenship”, any state lacking infinite resources will have to distinguish those who are entitled to elements of public provision from those who ineligible. Libertopia it ain’t, but that’s the real world.
Whether they come from liberal societies or illiberal countries, I’ve never met an immigrant who questions this basic idea. In my experience, it wouldn’t occur to them. While certainly many would complain that our current system is overly bureaucratic, complicated, irrational, redundant, frustrating, and even unjust, I’ve never heard anyone from outside the west argue that nations shouldn’t have the prerogative to make policies about whom to accept as citizens.
I find this argument frustrating because it’s so irrational that it crowds out more moderate liberalizing proposals. I, for one, believe (with the Cato authors) that our nation could benefit from naturalizing more citizens. But this a priori, rights-based, blanket argument–which has no use for small things such as empirical facts–is positively maddening. First of all, the quick and thoughtless reliance on tacit accusations of racism is, to be charitable, a cheap shot. Secondly, Fourth,culture matters. Third, this sort of fanatic, indiscriminate, dogmatic belief in universal open borders undercuts more serious, empirical arguments that take into account facts that don’t fit the oversimplified and pre-determined narrative. Fourth and finally (for now), simply characterizing the opponents argument as illegitimate on the basis of being possibly unconstitutional, illegal, immoral is simply bad argumentative form. In short, this is the opposite of persuasive; it actively antagonizes those who do not already agree with you.
Among free-market types, this argument has a parallel at a higher level of abstraction. Advocates of minimal government tend to make subtler, more empirical, more ambivalent, and more falsifiable claims. Anarchists, with certain notable exceptions, tend to have more deontic, a priori, and absolutist arguments which must accepted or rejected as a whole.
The world is a complex place and a too-eager tendency to reach bracing, sweeping conclusions will not help us understand it.
Chuck,
I’d distinguish between government benefits and human rights. Obviously, voting is a privilege of citizenship, and I don’t think it’s necessarily wrong to limit taxpayer-funded benefits to citizens. But I think everyone has certain fundamental rights, including the right to freedom of movement and the right to enjoy the fruits of one’s labor that aren’t contingent on the generosity of any one nation’s taxpayers. I think that denying these rights, and effectively confining millions of people to a life of poverty and fear, is wrong. And I don’t see how it’s morally relevant whether the people whose rights we’re violating were born in the United States or some other country.
@Chuck: But doesn’t the idea Tim is discussing — some sort of “guest worker” visa plan — fit perfectly into the government’s “prerogative to make policies about whom to accept as citizens”? Nothing about said prerogative dictates that it be purely a binary classification system. If injecting a little subtlety into the system makes everyone better off as implied by the Cato study, and extends some basic human rights in the process as explained by Tim, what exactly is the problem?
In fact, I would see a program like this as a way to increase our regulatory control over foreign immigration. It seems self-evident that we have a much better chance of upholding a social contract with a documented guest than we do with a clandestine resident. Like I said above, the documentation proposal outlined here would go a whole lot further to address the “freeloader” problem you discussed than our current strategy does now.
Tim, thanks for tackling this issue. For some reason it remains a topic many self-described libertarians continue to peddle the Statist rhetoric. As you noted, we should rely on morality arguments to frame what is essentially a property rights issue. No one individual or group of people have the right to tell you who you can and can’t have on your property or question contracts entered into voluntarily.