Let Them In_ The Case for Open Borders - Jason L. Riley [21]
In 1994 economist Richard Vedder of Ohio University, working with Lowell Gallaway and Stephen Moore, conducted a historical analysis of immigration’s impact on the entire U.S. labor force. They found “no statistically reliable correlation between the percentage of the population that was foreign-born and the national unemployment rate over the period 1900-1989, or for just the postwar era (1947- 1989).” Moreover, Vedder found that if there is any correlation between immigration and unemployment, it would appear to be negative. Which is to say that higher immigration is associated with lower unemployment.
For example, Vedder found that immigration reached its highest level (relative to population) in the first twenty-five years of the twentieth century, when the average annual unemployment rate was 5.05 percent. Yet over the next sixty-nine years of relatively smaller immigrant flows, the average unemployment rate was 7.38 percent.
Like Peri, Vedder concluded that the reason immigration doesn’t cause unemployment is because immigrants help enlarge America’s economic pie. “Immigrants expand total output and the demand for labor, offsetting the negative effects that a greater labor supply might have,” he writes. “They fill vital niches at the ends of the skill spectrum, doing low-skilled jobs that native Americans rebuff (at prevailing wages) as well as sophisticated high-skill jobs.”
Among high-skilled immigrant workers, these dots are perhaps easier to connect. Think of a silicon chip manufacturer in the United States that hires a bright immigrant engineer from China to redesign its products with the goal of making them more cost-efficient and marketable. If the hire is a success, the firm winds up making more chips, which requires more employees. These additional hires—from the managers to the secretaries—are all more likely to be U.S. natives. So are the additional advertisers and marketers who will be sought as the company expands. Why? In part because the skills necessary to do those jobs generally include a familiarity with the native language and culture that a recent immigrant is less likely to possess. As for the American consumer, he’s now getting a better product, more choices, and lower prices. Thus has an immigrant hire resulted in more jobs for U.S. natives, not fewer, and increased overall productivity.
“Engineers create jobs,” wrote T. J. Rodgers of Cypress Semiconductor in The Wall Street Journal a decade ago. “Cypress employs 470 engineers out of 2,771 employees. Each engineer thus creates five additional jobs to make, administer, and sell products he develops.” Rodgers noted that a “disproportionate number of our research-and-development engineers—37 percent—are immigrants, typical for Silicon Valley. Had we been prevented from hiring those 172 immigrant engineers, we couldn’t have created about 860 other jobs, 70 percent of which are in the U.S.”
Of course, high-skill immigrants from Europe, Asia, and Southeast Asia do more than create extra jobs for U.S. employers. They also seem to have a knack for creating entirely new companies that employ thousands of people. Lucky for us. Technology firms, in particular, have made possible the U.S. productivity boom of the past decade. And immigrants have had a hand in starting a disproportionate number of the most successful ones—from Google and eBay to Yahoo! and Sun Microsystems.
A National Foundation for American Policy paper by Stuart Anderson and Michaela Platzer assessed the impact of immigrant entrepreneurs