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Some reasons there is no real value to immigration -
Posted on: January 28, 2017 at 10:36:33 CT
GA Tiger MU
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at least to the host country and economy. To the immigrant, certainly. How about it libbies. Still want 'em?
1. Immigrants are more welfare-dependent than the most frequently quoted statistics indicate, and far more welfare-dependent than the population at large.
If one looks at data from the Census Bureau’s Survey of Income and Program Participation, one finds that 46% of households headed by an immigrant resort to welfare in some form, versus 27% of households headed by an American. Supporters of mass immigration, however, from community organizers to the Wall Street Journal, prefer to use a different and more easily manipulable data set from the Census Bureau’s Current Population Survey, and to arrange it by individuals rather than households. This sounds more…individualistic. It also gives the impression that rates of welfare dependency among newcomers and natives are more roughly comparable. But it is a trick, Borjas shows. If an undocumented single mother from Mexico, say, bears two children after arriving in the U.S. and winds up on welfare, the system shows an increase of one immigrant and two natives. The welfare system is propped up by native households, each of which pays, by Borjas’s estimate, about $470 per year to cover losses from immigration.
2. Competition from immigrants dramatically reduces the wages of the workers whose qualifications most resemble theirs.
This is the sort of common-sense conclusion that you need not ever spend a day in economics class to understand. Yet for three decades economists have clung doggedly to the doctrine that immigrants can offer efficiencies to an economy without lowering the wage in the industries where they work. This is nonsense on the conceptual level: the lowered wages are the efficiencies.
Borjas focuses on a celebrated 1990 study of the Mariel boatlift, by Princeton labor economist David Card. In the course of a few weeks in 1980, 125,000 people—a variety of dissidents, criminals, and ambitious youngsters—were allowed to flee Cuba, and wound up in Florida. Despite what was considered, in the days before China joined the world economy, a massive labor shock, Card found no evidence that the newcomers depressed general wages around Miami. Politicians have thus quoted his study ever since. Barack Obama dredged it up in 2014. It is useful. But it is, Borjas shows, wrong. Card had looked at the workers in metropolitan Miami as a whole. The Miamians with whom the Marielitos competed most directly—high-school dropouts—were effectively “tucked away” inside this larger group. But once poorer workers were isolated, it was easy to show that their weekly wage fell between 1979 and 1985. It fell, in fact, by an astonishing $100 a week. Incantations about diversity do not abolish the laws of supply and demand. After a 2006 raid on a chicken plant in Stillmore, Georgia, which rousted out illegal workers, the plant had to hire locals, and did so at significantly higher wages.
Whether immigrants help or hurt a sector of the economy has to do with whether they enter it as “complements” or competitors. Today’s immigrants are complements for rich people, who tend not to act as their own valets, chefs, gardeners, or maids. Others do those jobs. If the cost of them gets cheaper, rich people’s lives get better, and the number of people who can live like rich people may increase. The lives of the natives who used to perform those tasks get worse. The rule of thumb is that a 10% increase in the workforce of a given sector will result in a 3% fall in wages.
3. The primary effect of immigrants on the country receiving them is a massive regressive redistribution of income and wealth among natives.
This redistributive effect is, for Borjas, “the key insight I have gleaned from decades of research on the economics of immigration.” The main thing about immigration is not wealth creation. It is not entrepreneurship. It is not diversity. It is redistribution from the poor to the rich. That this should be so jarring and implausible-sounding to contemporary sensibilities shows how censored the discussion of immigration economics has been—for this has always been one of the basic consensus conclusions of most economic models of migration.
* * *
Borjas wants us to know that, whenever economists predict vast economic benefits from open immigration, they are using equations devised by individual economists, often with an agenda in mind. In the very simplest model of an open economy, with the world divided into a relatively poor southern hemisphere and a relatively rich northern one, and with no frictions or moving costs, we would find that most of the world does indeed get richer from free movement. But let us consider why this is so. Under such a model the vast majority of the Global South’s workers—billions of them—will move north. That so many people would want to move is not wholly implausible. Almost a third of those born on the island of Puerto Rico—who are American citizens—have moved to the mainland United States. In 2015 the U.S. “diversity lottery” for immigrant applicants drew 15 million applications for 50,000 spots.
According to Borjas, the world gets richer because
the earnings of the North’s native workforce will drop by almost 40 percent, while Southern workers will more than double their earnings. One last redistributive impact is worth mentioning—and again it is one of those nuisance statistics that is swept under the rug: the income of capitalists worldwide will increase by almost 60 percent.
This “basic” model, out of which almost all of our projections of the benefits from immigration come, contains wildly optimistic assumptions. It assumes that the massive inrush of foreign peoples will do nothing to alter the infrastructure, constitutions, or associations that gave the advanced economies their competitive edge. If such things do change—and crowded hospitals, affirmative action, and bilingual education programs are all evidence that they do—then the “gains” from immigration rapidly evaporate. They can even turn into losses.
In 1995, Borjas tried to estimate the actual effects of immigration on the United States, and published his conclusions in the Journal of Economic Perspectives. He found that GDP rose by $2.1 trillion, but virtually all of those gains—98%—went to immigrants themselves. Let us not lose sight that these gains constitute a great addition to the world’s happiness. If we were judging open immigration not as an economic policy but as an international aid program, we might consider it a success.
But we aren’t. When economists talk about “gains” from immigration to the receiving country, they are talking about that remaining 2%—about $50 billion. This “surplus” disguises an extraordinary transfer of income and wealth. Native capitalists gain $566 billion. Native workers lose $516 billion.
The complete article:
article:http://www.claremont.org/crb/article/the-hidden-costs-of-immigration/
Edited by GA Tiger at 10:39:39 on 01/28/17
1. Immigrants are more welfare-dependent than the most frequently quoted statistics indicate, and far more welfare-dependent than the population at large.
If one looks at data from the Census Bureau’s Survey of Income and Program Participation, one finds that 46% of households headed by an immigrant resort to welfare in some form, versus 27% of households headed by an American. Supporters of mass immigration, however, from community organizers to the Wall Street Journal, prefer to use a different and more easily manipulable data set from the Census Bureau’s Current Population Survey, and to arrange it by individuals rather than households. This sounds more…individualistic. It also gives the impression that rates of welfare dependency among newcomers and natives are more roughly comparable. But it is a trick, Borjas shows. If an undocumented single mother from Mexico, say, bears two children after arriving in the U.S. and winds up on welfare, the system shows an increase of one immigrant and two natives. The welfare system is propped up by native households, each of which pays, by Borjas’s estimate, about $470 per year to cover losses from immigration.
2. Competition from immigrants dramatically reduces the wages of the workers whose qualifications most resemble theirs.
This is the sort of common-sense conclusion that you need not ever spend a day in economics class to understand. Yet for three decades economists have clung doggedly to the doctrine that immigrants can offer efficiencies to an economy without lowering the wage in the industries where they work. This is nonsense on the conceptual level: the lowered wages are the efficiencies.
Borjas focuses on a celebrated 1990 study of the Mariel boatlift, by Princeton labor economist David Card. In the course of a few weeks in 1980, 125,000 people—a variety of dissidents, criminals, and ambitious youngsters—were allowed to flee Cuba, and wound up in Florida. Despite what was considered, in the days before China joined the world economy, a massive labor shock, Card found no evidence that the newcomers depressed general wages around Miami. Politicians have thus quoted his study ever since. Barack Obama dredged it up in 2014. It is useful. But it is, Borjas shows, wrong. Card had looked at the workers in metropolitan Miami as a whole. The Miamians with whom the Marielitos competed most directly—high-school dropouts—were effectively “tucked away” inside this larger group. But once poorer workers were isolated, it was easy to show that their weekly wage fell between 1979 and 1985. It fell, in fact, by an astonishing $100 a week. Incantations about diversity do not abolish the laws of supply and demand. After a 2006 raid on a chicken plant in Stillmore, Georgia, which rousted out illegal workers, the plant had to hire locals, and did so at significantly higher wages.
Whether immigrants help or hurt a sector of the economy has to do with whether they enter it as “complements” or competitors. Today’s immigrants are complements for rich people, who tend not to act as their own valets, chefs, gardeners, or maids. Others do those jobs. If the cost of them gets cheaper, rich people’s lives get better, and the number of people who can live like rich people may increase. The lives of the natives who used to perform those tasks get worse. The rule of thumb is that a 10% increase in the workforce of a given sector will result in a 3% fall in wages.
3. The primary effect of immigrants on the country receiving them is a massive regressive redistribution of income and wealth among natives.
This redistributive effect is, for Borjas, “the key insight I have gleaned from decades of research on the economics of immigration.” The main thing about immigration is not wealth creation. It is not entrepreneurship. It is not diversity. It is redistribution from the poor to the rich. That this should be so jarring and implausible-sounding to contemporary sensibilities shows how censored the discussion of immigration economics has been—for this has always been one of the basic consensus conclusions of most economic models of migration.
* * *
Borjas wants us to know that, whenever economists predict vast economic benefits from open immigration, they are using equations devised by individual economists, often with an agenda in mind. In the very simplest model of an open economy, with the world divided into a relatively poor southern hemisphere and a relatively rich northern one, and with no frictions or moving costs, we would find that most of the world does indeed get richer from free movement. But let us consider why this is so. Under such a model the vast majority of the Global South’s workers—billions of them—will move north. That so many people would want to move is not wholly implausible. Almost a third of those born on the island of Puerto Rico—who are American citizens—have moved to the mainland United States. In 2015 the U.S. “diversity lottery” for immigrant applicants drew 15 million applications for 50,000 spots.
According to Borjas, the world gets richer because
the earnings of the North’s native workforce will drop by almost 40 percent, while Southern workers will more than double their earnings. One last redistributive impact is worth mentioning—and again it is one of those nuisance statistics that is swept under the rug: the income of capitalists worldwide will increase by almost 60 percent.
This “basic” model, out of which almost all of our projections of the benefits from immigration come, contains wildly optimistic assumptions. It assumes that the massive inrush of foreign peoples will do nothing to alter the infrastructure, constitutions, or associations that gave the advanced economies their competitive edge. If such things do change—and crowded hospitals, affirmative action, and bilingual education programs are all evidence that they do—then the “gains” from immigration rapidly evaporate. They can even turn into losses.
In 1995, Borjas tried to estimate the actual effects of immigration on the United States, and published his conclusions in the Journal of Economic Perspectives. He found that GDP rose by $2.1 trillion, but virtually all of those gains—98%—went to immigrants themselves. Let us not lose sight that these gains constitute a great addition to the world’s happiness. If we were judging open immigration not as an economic policy but as an international aid program, we might consider it a success.
But we aren’t. When economists talk about “gains” from immigration to the receiving country, they are talking about that remaining 2%—about $50 billion. This “surplus” disguises an extraordinary transfer of income and wealth. Native capitalists gain $566 billion. Native workers lose $516 billion.
The complete article:
article:http://www.claremont.org/crb/article/the-hidden-costs-of-immigration/
Edited by GA Tiger at 10:39:39 on 01/28/17
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Some reasons there is no real value to immigration - - GA Tiger MU - 1/28 10:36:33