Let Them In_ The Case for Open Borders - Jason L. Riley [41]
Back in 1984, Heritage thought differently about immigration. That was the year it published an important paper by Julian Simon showing how poor immigrants help subsidize the country’s costliest public benefits programs, Medicare and Social Security, by paying taxes for decades without ever receiving a check. A 1998 study by Beach also reported that Latino immigrants pay more into Social Security than they receive in their lifetime. A lot more. In 1997 dollars, he calculated, the typical Latino couple received nearly $350,000 less in lifetime benefits than it paid into the system.
This history hasn’t been lost on Heritage’s critics—liberal or conservative—in the recent debate over comprehensive immigration reform. But those on the political left in particular seemed to enjoy employing progrowth counter-arguments to push back at the organization’s newfound restrictionism. When Rector published a study in April 2007 arguing that low-skill immigrants are a net drain on the economy—and speculating that allowing any more such individuals into the United States “would dramatically increase the future fiscal burden to taxpayers”—it drew a pointed, supply-side response from the left-wing Immigration Policy Center (IPC).
Curiously absent from Rector’s study, wrote IPC researchers Walter Ewing and Ben Johnson, was any discussion of the U.S. economy’s high demand for low-skill labor. Apparently, it never occurred to Rector that immigrants might be incentivized by labor market forces rather than potential welfare benefits. The authors went on to chide Rector for his “narrow fiscal accounting” methods, which assume that if an immigrant’s tax payments don’t cover the cost of public services and benefits that he receives, it follows that the immigrant is a drain on the public fisc and the economy as a whole. But it doesn’t follow.
“A comparison of the taxes that people pay and the public benefits and services they consume at a particular point in time does not measure the larger economic impact that they have through their consumer purchasing power and entrepreneurship, both of which create new jobs,” wrote the authors, who would never be mistaken for Art Laffer. “Nor does it account for the upward economic mobility that many low-income families experience from generation to generation, particularly immigrant families.”
Suffice it to say that if you’re a right winger like Robert Rector, and you find yourself getting schooled on the economic facts of life by the likes of the Immigration Policy Center, you might need to revisit Friedrich Hayek, or at least reread Wealth and Poverty. Ewing and Johnson’s take-down of a shoddy static economic analysis probably approximates anything the Heritage Foundation itself could have produced—and perhaps would have produced—if it hadn’t, to the dismay of us free marketeers, decided to join the Dark Side on immigration.
AMERICA’S HARDEST WORKERS
The journalist Tamar Jacoby once wrote that “most foreigners, whether they arrive legally or illegally, come to the United States to work. Most do not come in the expectation of living on welfare.” After all, says Jacoby, “if you’re going to be unemployed, it’s much better to be unemployed at home than in the United States. It’s usually warmer at home and less expensive to live, and you are likely to be surrounded by a network of supportive family and friends.”
Jacoby is spot-on, according to the economic data used to gauge an immigrant’s intentions. The labor force participation rate, which measures the percent of the working-age population that is employed or seeking employment, is the strongest indication that immigrants come here to work and not to idle. Among foreign nationals generally, labor participation rates are higher than that of