Worth Reading: The Economics of Immigration

BY ISN STAFFFebruary 11, 2013

written by Nathaniel Romano, S.J. 

EDITOR’S NOTE: The following was originally posted on The Jesuit Post – learn more about the JP at:  http://thejesuitpost.org

ImmigrationWe can’t take all the credit, but there has been a surprising push in recent months amongst the political classes to seriously address reforming our broken immigration system.  Not only is immigration a focus of the Ignatian Family Advocacy Month, but we have plans released in the last weeks from both a bi-partisan group of US Senators and President Obama.  Now, thanks to Time magazine, we have even more reasons to support serious and comprehensive immigration reform.  Reporter Christopher Matthews has gathered research showing that the immigration reform will be a benefit to the US economy.  It’s an article that’s worth reading.  The take-away:

Economists, as a rule, like to look at the big picture. And the vast majority of the economic literature argues that a more liberal immigration policy would be good for the U.S. economy as a whole. The problem is, of course, that not everyone is going to come out a winner. A particularly contentious issue as far as economists are concerned is the effect of immigration on low-income, native-born workers. As I mentioned before, the literature is divided on whether an increase in low-skilled immigrant labor hurts low-skilled native workers in the long-run or not.

But it’s almost certain that in individual cases there will be workers who get put out of work by immigrant competition. And these individual stories of hardship are a much more salient effect of immigration than a slew of patents that make hundreds of products ever-so-slightly more efficient. In other words, the benefits of increased immigration will be spread out among the entire population, while the costs will be borne by a relatively small group of individuals who will feel the effects acutely.

This all might seem counter-intuitive, but it makes sense.  The economy, despite the prevalence of pie-related metaphors, isn’t really like Sunday dinner.  If an extra half-dozen people show up for dinner, everyone eats less, or maybe not at all.  The economy, though, can keep on growing.  Entrepreneurs – the famed “job creators” – adapt to the influx of new workers because these workers make certain industries and business opportunities more feasible and cost-effective.  Moreover, more people means more demand for goods and services.  And, because immigrants tend to be younger, they help support Social Security, Medicare, and, more broadly, contribute through their payroll and consumption taxes to the support of social services, even as they might consume some of those services themselves (obviously, expanding the number of immigrants eligible for work permits moves them from welfare rolls to payrolls).  And, finally, more people in the economy means more innovation in the economy.

All in all, the point is that the economy as a whole grows.  We have practical reasons for doing the right thing.

Though, I would be remiss to skip over the last part I pulled out; some people at the margins will be displaced or disrupted by the immigrant influx.  We must remember them and address those concerns. Our economy will face broad improvements as it adjusts to the reality of immigration reform.  Those improvements can and should be used to help those displaced by the reform.  We are reminded the immigration reform takes place in the broader context of addressing the growing social inequality in this country.  Reform and justice for immigrants is part and parcel of reform and justice for the working class, the working poor, and those abandoned by the economic elite.

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