Immigration Raises Incomes in America

A blog about business and economics.
April 22 2013 3:27 PM

Immigration Raises Incomes in America

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From left, Sens. Chuck Grassley, Patrick Leahy, Dianne Feinstein, and Charles Schumer at a Senate Judiciary Committee hearing on Monday

Photo by Mark Wilson/Getty Images

There's an awful lot of issues about which reputable economics literature disagrees. One exception to that is the hot-button topic of immigration, where everyone's research indicates that immigration is economically beneficial to America. As I wrote last week, even immigration restrictionists' favorite labor economist George Borjas has done research that clearly shows this, requiring the application of a very strange moral calculus to make immigration look bad. The point can really be driven home by reading this brief Borjas did for the Center on Immigration Studies, a leading restrictionist group. Borjas is basically deploying a lot of rhetorical moves to cover up the fact that he can't really dispute the fact that American incomes go up when more immigrants come.

He writes things like this: "Of the $1.6 trillion increase in GDP, 97.8 percent goes to the immigrants themselves in the form of wages and benefits." Damn. That's a high percent. But if you stop and think about it for a moment, that means that keeping the immigrants out only makes economic sense if we put negative weight on the interests of the immigrants. I don't expect American public policy to ever be driven by overwhelmingly levels of concern for the interests of foreigners, but a negative weighting would be pretty odd. The claim would have to be that the typical American ought to deny himself a small benefit purely in order in order to deny a much larger benefit to a foreigner. But why?

What's more, if you're upset about this division of the surplus the obvious solution is to divide the surplus some other way with taxes rather than entirely destroying the $1.6 trillion worth of surplus.

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There's also the strange contention that the surplus comes from reducing wages of natives "while increasing profits or the incomes of users of immigrants by an estimated $437 billion." The problem here is that the class of users of immigrant labor is virtually everyone. Immigrants pick crops and build houses. They work in meatpacking plants and fast food restaurants. They clean hotel rooms. They also write computer software and treat sick people. It would be foolish to pretend that there's zero distributional impact of all this, but the idea that "users of immigrants" is some discrete class of people whose interests need to be weighed against those of wage-earners is a delusion. The big winner across the board would be retired people, who consume services but don't earn wages. Like the fact that the big economic loser from increased levels of immigration is previous immigrants (who face the most direct labor market competition) this should be a clear sign that immigration politics isn't about economics. If it were, you'd have a bunch of cantankerous old white people demanding open borders while young Latinos argue for pulling up the ladder of migration opportunity. In reality, you get exactly the reverse as people's policy preferences track their cultural affinities or phobias.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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