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17 USC 102

Economists, Not Politicians, Should Lead on Immigration Reform

February 23, 2019

 

Politicians have debated and promised the reduction of illegal immigration and stronger border policies for decades. Today, the government is finally open, having been closed for over three weeks over a border wall that has prompted presidential overreach. The arguments against immigration—that immigration reduces jobs for Americans, that they are dangerous, and that they abuse the welfare state—have stayed stagnant. It is puzzling to try and understand the existence of such disdain for immigrants, especially when the majority of those arguments against immigration are proven incorrect by economic and other scholarly studies. When immigration is mentioned, many Americans lose human compassion and focus on the economy or the effects on current citizens. It's important to put aside partisan politics and determine if the positive impacts of immigration outweigh the negative.

 

Based on several studies and previous immigration policy, “kicking out” immigrants does not raise wages for American workers and hurts the economy. In 1962, President Lyndon B. Johnson and a Democratic Congress ended a temporary Bracero Program, that allowed millions of Mexican workers to work in the U.S. agriculture industry temporarily during the later years of World War II, when native workers became the soldiers fighting in Europe and Asia and left labor void at home. The initial idea behind the program’s termination was to reduce immigrant labor and raise working conditions for U.S. citizen farm workers, as well as to increase native wages and the amount of jobs in the economy. The real effect, however, was that the labor demand for undocumented workers decreased due to rising wages for native workers coming home to work similar, if not the same jobs. The agricultural industry started to become more automated. The thing to note here is that the majority of jobs taken by undocumented immigrants are labor intensive and many Americans are not willing to work them for the price immigrants would. According to a study by Dartmouth labor economists Ethan G. Lewis and Michael E. Clements, the “bracero exclusion failed to raise wages or substantially raise employment for domestic workers in the sector.”

 

Another study by economists Mette Foged and Giovanni Peri studied the effect of an influx of immigrants from 1991-2008 on the labor market of Denmark. Foged and Peri found that the immigrants, distributed randomly across Denmark, were forced to take “manual intensive” jobs. The affect immigrants had on the labor market for native-born workers, was that workers increased their “mobility toward more complex occupations” increasing their wages and human capital in the economy. Even the Cato Institute found that immigration has a small long-run effect on wages. There is no doubt that lesser-educated Americans will be the most impacted by immigration, but based on Peri’s study, there is no significant effect on the opportunity for native workers to get jobs. Another study by Peri and Sparber found that lesser-educated workers tend to occupy manufacturing and mining jobs whereas undocumented immigrants fill service and agriculture jobs.       

 

From the Chinese Exclusion Act to the Gentlemen's Agreement, the stance of many politicians and therefore their policies has been that immigrants steal American jobs. In reality, Immigrants create more jobs and add more to the economy than politicians say they take away. Immigrants actually drive entrepreneurship and economic growth. According to The Kauffman Foundation, immigrants started 28.5 percent of all new businesses in 2014 and 25 percent in 2018. In fact, immigrants are twice as likely to start independent businesses than native-born citizens are. Immigrants represent roughly 15 percent of the U.S. workforce, but make up a quarter of all entrepreneurs and investors. The Brookings Institute concluded that the average fiscal burden of an immigrant is $16,000, but second and third generation immigrants have a net contribution of roughly $1,700 based on the average flow of taxes, education benefits, and the cost of public goods including defense, local aid, foreign aid, and state spending. This study also finds that undocumented immigrants as a group have a larger positive fiscal impact than other immigrants because of their age structure. Additionally, undocumented immigrants are not eligible to receive benefits from programs such as the Deferred Action for Childhood Arrivals Program or a temporary visa program. Furthermore, immigrants drive economic growth by buying American goods and working in American businesses (and creating their own) and subsequently increase output. Their collective role leads to an increase in a country’s overall standard of living, and higher wages for native workers.

 

Although it is important to recognize the sadness of any murder and penalize such felonies, but the collective “danger” of immigration is broadly exaggerated by the Trump Administration. President Trump himself claimed in his address in June that 63,000 murders were due to illegal immigrants. He referenced a study by the U.S. Office of Government Accountability, which specifically addresses the amount of undocumented immigrants in prison between July 2008 through June 2009. The study states on page 13 that “of the inmates we analyzed, about 63,000 were SCAAP (State Criminal Alien Assistance Program) illegal aliens and about 28,000 were SCAAP unknown aliens.”

 

The study, which only analyzed criminals, obviously does not address the percentage of undocumented immigrants that have committed felonies. Even the Immigration and Customs Enforcement Agency, or ICE, disagreed with Trump’s claim. Statistically substantive data shows that illegal immigrants are less likely to commit a crime than native born citizens. In Texas specifically, “the homicide conviction rate for illegal immigrants was 16 percent below that of native-born Americans in Texas in 2015,” according to the Cato Institute. Trump has also argued that Mexicans are dangerous because they bring in illegal drugs. The truth is, the vast majority of illegal drugs are transported into the United States through legal points of entry, or checkpoints, at the border. According to CBP enforcement statistics, more drugs are detected at ports of entry than illegal border crossings. Finally, to the notion that undocumented immigrants are a burden on the welfare state: undocumented immigrants contribute $11.6 billion in local and state taxes a year. On average, they pay 8 percent of their income to state and local taxes. Immigrants are less likely than native-born citizens to apply for welfare, because the process of doing so may reveal their undocumented status. Child immigrants are less likely to use cash assistance, SSI, SNAP, or Medicaid. According to Cato, “noncitizens use every welfare program less than natives do.”  

 

I have found that, when it comes to immigration, people believe politicians more than economists. I am not arguing that it is inherently unproductive to debate immigration policy, I am simply saying that based on history and economic and political research, the government should be focusing on other extremely pressing foreign and domestic policies, instead of on holding the government hostage for a border wall. Immigration has more positive effects on the economy than negative. The United States lags behind in many areas including education and prison reform. The current administration should focus on addressing the opioid epidemic (130 americans die a day, according to the Centers for Disease Control—far more than illegal immigrant related deaths), reducing global warming and waste, and focusing on infrastructure, it is important to understand why the debate on immigration is so partisan and the root of many deal breaks in the Obama and Trump administrations.

 

 

Photo credit Tami Heilemann, Creative Commons

 

 

 

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