Let Them In_ The Case for Open Borders - Jason L. Riley [32]
How’s that? To begin with, illegal immigrants are more sensitive to the U.S. business cycle. They tend to come when the economy is expanding, and they can more easily migrate to those areas of the country where job growth is fastest because they’re not bound to a single employer. Legal immigrants necessarily respond more slowly to economic conditions. The number of green cards available each year is fixed, and the backlog is several years long. The bureaucratic calendar, rather than market demand, determines the flow of foreign workers.
Even temporary legal immigrants aren’t as flexible and mobile as illegals, since temporary visa holders can’t change jobs without permission from their employer. And while the quotas on temporary legal immigrants are ostensibly linked to economic need, adjustments in the number of available visas have lagged job growth by as much as thirty-six months, and the determining factor has usually been Congress’s political mood, not labor market signals.
Hanson lists the manifold benefits that accrue in the U.S. economy from these foreign workers—especially the illegal ones. By augmenting the supply of available resources, “immigration raises the productivity of resources that are complementary to labor,” he writes. “More workers allow U.S. capital, land, and natural resources to be exploited more efficiently. Increasing the supply of labor to perishable fruits and vegetables, for instance, means that each acre of land under cultivation generates more output. Similarly, an expansion in the number of manufacturing workers allows the existing industrial base to produce more goods.”
The restrictionists reply that natives would gladly perform these tasks if low-skill immigrants weren’t available. But that misses the point, which is that Americans are increasingly overqualified for the sorts of jobs Latino immigrants are filling. Sure, a U.S. native with a high school diploma or some college could work as a field hand, but that’s probably not the best use of his skills. And if he’s picking strawberries on a California farm, or busing tables at an Applebee’s in Texas, or working the production line of an Iowa chicken-processing plant, it means he’s not doing a job he’s better suited for. And since his labor is more expensive, it also means he’s raising the costs of production in those industries, which leads to higher prices for consumers and a less productive workforce overall. As was discussed earlier, low-skill immigrants ultimately increase the incomes of natives by allowing our free-market economy to allocate human capital and other domestic resources more efficiently.
Hanson’s paper also analyzes the economic costs associated with illegal immigration. There’s downward pressure on the wages of native workers who compete directly for jobs with immigrants (though, again, there’s a dwindling number of natives vying for such jobs). But the author’s real concern is the direct fiscal costs of these newcomers to ordinary Americans. Do illegal aliens pay less in taxes than they received in public benefits? Are they snouts at the trough, burdening taxpayers through heavy use of welfare services?
Even for economists, who relish performing complicated calculations, determining the fiscal consequences of immigration is an exceptionally difficult challenge. Estimates vary widely based on who’s immigrating, their age at arrival, the number of offspring, the skill sets, the education level, the public benefits at stake, and other factors. Like most researchers who’ve looked at the issue of immigrant “costs,” Hanson concludes that, on balance, it’s a wash. Some immigrants are net contributors to the public fisc; others are net beneficiaries. But in the end, fiscally speaking, immigrants don’t make a big impact on the nation’s purse.
Still, it’s worth examining this argument further. What does it mean