Art Carden  

An Economist on Politicians on Immigration: New at

How do you say "Austerity for ... Why My Billion-Dollar Plan Won...

My latest op-ed was published today by In it, I evaluated claims by Senator Jeff Sessions and Rep. Mo Brooks that "we don't have that many jobs" (Sessions) and that "simple economics" says "You increase the supply of anything, it tends to push down the price." Much of my argument centers on Adam Smith's claims in The Wealth of Nations:

The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour.

My main source was Giovanni Peri's article in the Winter 2012 issue of the Cato Journal. That issue features an essay by our very own Bryan Caplan titled "Why Should We Restrict Immigration?"

COMMENTS (4 to date)
Andrew writes:


Why do Borjas and Peri always reach opposite conclusions? This is extremely frustrating; how can two of the today's most prominent labor economists devote the last decade of their research to immigration, and always reach opposite conclusions? It is has been like clockwork that Borjas will publish an anti-immigration study and Peri will counter with a pro-immigration study. To my eye, as Ed Leamer would say, this smacks of "sinning in the basement."

Ghost of Christmas Past writes:

Peri always reaches pro-immigration conclusions because he's not too concerned with veracity. Among his various little tricks: counting GED's as college degrees, and counting high-school juniors and seniors as high-school dropouts.

Actually, the (Cato) Peri article Carden linked to is unusually useful, because Peri admits that low-skilled and high-skilled immigrant cohorts should be analyzed separately (Bryan Caplan, for a counter-example, generally wants to "average" them, which is very misleading). However, though conceding that vital point, Peri misleadingly neglects the way low-skilled immigrants increase (black, most strikingly) native unemployment when calculating their impact on wages of low-skilled natives (the correct procedure would be to "average in" the $0 wages drawn by displaced workers), and omits to mention the essential fact that low-skilled immigrants consume much more tax money than they pay (indeed, often more than their wages!).

Peri's argument, basically, that low-skilled immigrants increase the size of the economy enough to support the low-skilled immigrants themselves with only minor effects on natives, is false because he simply ignores government-mediated transfer payments from natives* (taxpayers) to low-skilled immigrants and their children, along with other externalities imposed by immigrants.

*And high-skilled immigrants.

Curtis Weems writes:

[Comment removed for policy violation. .--Econlib Ed.]

Ken P writes:
"we don't have that many jobs" (Sessions) and that "simple economics" says "You increase the supply of anything, it tends to push down the price."

hmmm... then states with the fewest workers should have the highest median wages??

Comments for this entry have been closed
Return to top