David R. Henderson  

The Other Problems with Roy Beck on Immigration

Julian Simon and I vs. Paul Kr... Money Substitutes and Velocity...

"You should have 2 servants and I should have 8."

In my previous post on Roy Beck's dramatic use of gumballs to make a numerate point about immigration, I focused on the fact that, contra Beck, making one million people better off really is a big deal. But I wrote not a word about the other way in which Beck misleads. That is that he makes it sound as if we Americans are doing foreigners a big favor at our expense by letting them in. [It feels weird when I write "we Americans" because although I am an American, I am also an immigrant.] But the fact is that Americans gain from immigration also.

In a discussion of immigration about 15 years ago, a fairly wealthy colleague of mine, an economist named Pat Parker, said the statement I put in bold above. What he was getting at is that if the U.S. government opened its borders to immigrants, many of us would have people from, say, Guatemala or Bolivia or Kenya working for us in our homes. They would be better off--Beck's point--but we would also be better off--Parker's point.

The gains from trade from dropping immigration restrictions would be huge.

HT to Robert Eaton.

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COMMENTS (12 to date)
BrianP writes:

But, but, but ... that would be exploitation!

fundamentalist writes:

I think the opposition to immigration comes a lot from the medieval idea that the stock of wealth is fixed, so letting immigrants in just means that we have to share and that leaves less for us.

MikeP writes:

Lant Pritchett very strongly covers the economic gains from immigration, arguing that the gains from freer migration in fact dwarf gains from, say, eliminating all tariffs.

From a Reason interview...

Pritchett is the author of a powerful new book that catalogues the staggering gains to be had from a liberalized immigration regime. Let Their People Come (Center for Global Development) relates, simply and unrelentingly, the voluminous data on global migration. If the 30 affluent countries making up the Organization for Economic Cooperation and Development (OECD) were to allow just a 3 percent rise in the size of their labor forces through loosened immigration restrictions, claims a 2005 World Bank report, the gains to citizens of poor countries would amount to about $300 billion. That’s $230 billion more than the developed world currently allocates to foreign aid for poor countries. And foreign aid is a transfer: The $70 billion that rich countries give leaves those countries $70 billion poorer. According to the World Bank study, wealthy nations that let in 3 percent more workers would gain $51 billion by boosting returns to capital and reducing the cost of production.
David R. Henderson writes:

Thanks. I had read that and forgotten it.

TimG writes:

It's more "misleading" to claim that because immigration "may" benefit America on net, that means we should let in more poor people. There is a big difference between a H1B visa holder and semi literate manual laborer. I don't see the argument that the latter is net positive. I also would not call the H1B holder, "poor" in a global sense because they had enough resources to obtain an education, though working in America is likely very beneficial for them.

I also say "may" benefit America, because the linked to article claims a boost to GDP of 36 billion, which is basically in the noise. I also disagree whether GDP is a good metric. The accounting for US born children, criminality, and institutional burden is also contentious.

David C writes:

To second fundamentalist's point, I remember reading through FAIR's primer on immigration, and being struck by how they sounded like a bunch of environmentalists.

"Now that we have a greater population density, our society is more crowded and our ecology less able to sustain more people."

very radical environmentalists too

David R. Henderson writes:

I just went back and reread the Pritchett interview. Wow! I had forgotten how good it was. Thanks again.

MikeP writes:

You're welcome.

I too thought it was a great interview. I was used to arguing the injustice in prohibiting an individual's migrating where he would see a sixfold increase in income in order to save someone else from a marginal decline in income (while the rest of the population sees a marginal gain). But this interview was the first I recognized the enormity of the accumulation of those losses over millions of people.

Steve Sailer writes:

How is importing cheap labor working out in California's Central Valley?


Two Things writes:

Why can you only hire immigrants as servants? There are a large number of unemployed people here now. Why don't you and your friends hire some of them?

Yeah, yeah, I know. The poor people we already have to hand are not humble enough. All the "self esteem" training they got in primary school persuaded them that service jobs are demeaning. Our local unemployed people are incompetent, hostile, and untrustworthy. Many are also black, so if you did employ them, your liberal friends would accuse you of "exploiting" them (even if you and they agreed without coercion on a suitable wage for their labors).

Now tell me: would the children of the immigrants you want to employ as servants make equally-good servants, or would they turn out just like the natives you won't hire?

Tom writes:

As most thing, it's the dosage that counts. The cure can also be the poison.

Rob O. writes:

Consider the tourism income angle... According to statistics released by Mexico's Tourism Secretariat (Sectur), Mexico's economy showed an unprecedented surge in '04 and their tourism industry exceeded $10 million in 2005, with 70% percent of visitors coming from the U.S. Mexico is home to the world's 7th-largest hotel industry. Add to that, the Mexican tourism industry attracted more than $2.29 billion in new investments in '05, representing a 38.5% increase over the previous year's figures. And by the end of 2006, Mexico had attracted $9 billion in new tourism investments.

So it seems easy enough to see that the more fiscally responsible and progressive thing to do — rather than fencing off the U.S.-Mexican border — would be to simply engage in one last bout of empire building. That is... take Mexico.

Yup, seize the country; divvy it up into a few more states; clean up the water; exploit the massive labor pool; tax the snot out of the tourism industry; and end the illegal immigration problem once & for all. Sound extreme? Maybe not so much. After all, do the math: We can SPEND $3-4 billion to build useless border fences or EARN 3 times as much in tourism investment income.

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