Let Them In_ The Case for Open Borders - Jason L. Riley [18]
How the wages and job opportunities of U.S. workers are impacted by foreign migrants is understandably one of the more contentious elements of the immigration debate. The common assumption is that a job filled by an immigrant is one less job for a native. According to this argument, since immigrants increase the supply of labor, not only do they decrease the employment opportunities of native workers but they depress overall wages as well.
Like the overpopulation concern discussed earlier, the full explanation of how immigrants affect the U.S. labor market is more nuanced and somewhat counterintuitive. Hence, opportunistic politicians and media populists have had a field day spooking the masses with misinformation. So in an area of public policy where precise, dispassionate analysis is most needed, we instead have a surfeit of blunt rhetorical instruments.
It’s worth noting that during the summer of 2006, while pols like Congressman King were selling economic protectionism to win votes, and cable news yakkers like Bill O’Reilly were doing the same to win ratings, the U.S. economy itself was humming along nicely. Since the Bush tax cuts three years earlier, annual GDP growth had averaged better than 3.6 percent. Consumer spending was also up, which is an indication of consumer confidence in the economy’s health. Exports were rising, the budget deficit was falling, inflation was low, and the slowdown predictions of the previous four years hadn’t come to fruition.
In the past quarter century there had been only a half-dozen negative GDP quarters, and the last one in 2001 was mild and relatively short-lived. By 2006, the United States was in the fifth year of an economic expansion. No matter how many illegal immigrants are here—and estimates range from 10 million to 12 million and higher—it’s hard to convince Americans that Mexican workers are stealing jobs and hurting pay when wages are rising and the unemployment rate is below 5 percent.
Seen through this statistical lens, it’s little wonder that immigrant scapegoating failed to resonate with the electorate. Even the most adept populists need some empirical evidence to back up their claims, and the Bush economy of the mid-2000s presented remarkably little data on which to hang anti-immigrant half-truths.
The reality is that America’s foreign labor force helps to propel economic growth, not impede it, because the U.S. job market, properly understood, is not a zero-sum game. The number of jobs in the United States is not static. It’s fluid, which is how we want it to be. In 2006, 55 million U.S. workers (or just less than 4.6 million per month) either quit their jobs or were fired. Yet 57 million people were hired over the same period. In a typical year, a third of our workforce is turning over. In about half of those cases the separation is voluntary; in the other half, the worker has been shown the door. But either way, this messy churn, which can disrupt lives and even make obsolete entire industries, has positive macroeconomic consequences in the long run.
That’s because flexible labor markets, the kind that minimize the costs to a business of hiring and firing employees, enable workers and employers alike to find the employment situation that suits them best. Flexible labor markets make it easier for an employee who doesn’t like a job, is let go, or simply feels underappreciated by his boss to find another position somewhere else. And flexible labor markets make it more likely that an employer will expand his workforce, or take a chance on a job seeker who isn’t very skilled or perhaps has a spotty record.
A better fit between employers and employees increases productivity and prosperity and makes markets more responsive to consumer demand. In the end, employers, workers, and consumers are all better off. Immigrants, be they Salvadoran dishwashers, Indian motel operators, or Russian microbiologists, increase the fluidity of U.S. labor markets. Access to fewer of them would reduce the flexibility that makes