Wednesday, June 13, 2007

Everyday Economics: Immigration Economics

University of Rochester economist Steven Landsburg (author of Armchair Economist and More Sex is Safer Sex) poses the following question in his new Slate.com column Everyday Economics:

"How do you justify a border fence? Why is it OK to consign millions of unskilled Mexicans to lives of desperate poverty? I'm told it's because Americans should care more about their countrymen than about a bunch of foreigners. OK, but how much more?


Surely there's some limit; virtually nobody thinks, for example, that Americans should be allowed to hunt Mexicans for sport. So, exactly how much are you willing to hurt a foreigner to help an American? Is a foreigner's well-being worth three-quarters as much as an American's, or half as much, or one-quarter as much?"

Landsburg provides his usual careful economic cost-benefit analysis answering the question, and in the process makes this following point:

"On balance immigrants don't harm Americans; virtually all economists agree that immigration makes us richer, not poorer. Every immigrant is a potential trading partner, a potential employee, and a potential customer. He bids down wages, but that's a two-edged sword: It's bad for his fellow workers, but it's good for employers and good for consumers."

13 Comments:

At 6/13/2007 8:32 AM, Blogger Dennis Mangan said...

Such nonsense is the cause of economists not being taken seriously. If Landburg thinks that importing illiterate serfs for low wage jobs will somehow cause us all to be better off, well, then he ought to get some common sense.

 
At 6/13/2007 10:12 AM, Anonymous Anonymous said...

Hey Dennis,

Its 90 + degrees outside here in southeast ohio and it takes about an hour to mow my lawn. If I can get a "serf" (aka worker) to voluntarily do it for me for say $10 it would make me a hell of alot "better off" (and him also).

MP rules!

 
At 6/13/2007 10:25 AM, Anonymous Walt G. said...

Any student of history would be amused at the current immigration complaints: it's nothing new at all.

Since the United States has been founded, some group has been despised. Everyone from the Chinese, to the Irish, to the Germans. . . have been the source of America's ills.

Different century, different people, but still the same complaints.

A lot of the "illiterate serfs" will know two languages in a few years and be a heck of a lot smarter than some of us are now. We might even end up working for them, so you better be careful who you are calling names!

 
At 6/13/2007 10:33 AM, Blogger Steve Sutton said...

Perhaps if economics were common knowledge, common sense would recognize the validity of Landburg's statements.

 
At 6/13/2007 11:59 AM, Anonymous Sudha Shenoy said...

"Illiterate serf." Thank you very much. And what were _your_ ancestors? Why was it OK for _them_ to pull themselves out of poverty, but not for their equivalents today? Why are we serfs expected to remain eternally poor? Not even medieval lords expected this; a Lord mayor of London was once a serf.

 
At 6/13/2007 12:34 PM, Blogger Adam said...

I guess I will take this literally and ask, "If a border fence is wrong, how come buildings and private homes are allowed to put up gates and have security guards?" I see a difference between a legal immigrant, one that goes through the process, and an illegal immigrant, one who just walks across the border. I have no problem with legal immigrants, be they brilliant scholars or "illeterate serfs," but I do have a problem with illegals. A fence will not consign Mexican workers to a life of poverty any more than a Hollywood celebrity having a fence around his or her home will consign me to a life of poverty.

 
At 6/13/2007 12:40 PM, Anonymous Anonymous said...

Here is what people thought in 1912 about immigration:

http://www.flickr.com/photos/82207382@N00/504090686/

Yet we seemed to have survived, maybe Ricardo's theory of Comparative Adantage actually does work...

A private fence around private property is a fine idea. If private land owners along the Rio Grande want to put in a fence, they should go for it!

On the other hand, government barriers to the free migration of labor is more economy-killing regulation.

 
At 6/13/2007 2:09 PM, Anonymous Bob Wright said...

I believe one difference between most European immigrants and today's Mexican immigrants is that many [most?] Europeans went through Ellis Island and were therefore subject to a "process". This process presumably made them "legal."

Were the Irish and other European immigrants subject to any sort of numerical cap? Did everyone who showed up at our door get admitted?

Does anyone know whether or not the Chinese immigrants to California were "processed" anywhere?

 
At 6/13/2007 4:33 PM, Anonymous Walt G. said...

I am curious what the free-market proponents think about immigration in general (legal or illegal).

By theory, shouldn't wages increase due to an increase in demand and a decrease in supply? Accordingly, the supply and demand curves would meet at a wage that clears the market (even if that’s $20 or $30 per hour).

What we are encountering seems to be an unwillingness of employers to pay market wages to attract workers.

How is bringing in workers instead of allowing the unregulated market to work any different than other market manipulations such as the minimum wage?

Shouldn’t customers be charged an amount that would cover the wages of the employees, and businesses that can’t compete with market wages be allowed to go out of business to favor those who can?

Any ideas to my perplexing questions?

 
At 6/13/2007 9:52 PM, Blogger happyjuggler0 said...

adam,

I am glad to hear you have nothing against legal immigrants. With that assumption taken care of, there is a simple solution to illegal immigrants. Make them legal. With a stroke of a pen the problem is solved.

Next!

 
At 6/14/2007 10:51 AM, Blogger Adam said...

happyjuggler,

We did that once before, about 20 years ago. So if it works, how come there are so many illegals again? I am for the solution, punish the ones here now and then open the door to a quicker, larger amount of visas. We don't need to restrict people coming in, but we shouldn't reward those who ignored the law. I look at it this way. It is like telling a burglar, "Okay, I just want my stuff you stole back and I will not press charges, even though you destroyed my priceless china collection." That is what we need to stop. Unfortunately, that is not the debate we are currently having. We are so focused on Mexico that we forget that we are restricting German and Indian and other immigrants as well, ones who won't be made legal with the stroke of the pen since they have been OUTSIDE the country trying to get in.

 
At 6/14/2007 5:15 PM, Blogger happyjuggler0 said...

adam,

I guess I don't understand the china analogy. What harm are illegal immigrants doing that legal immigrants aren't doing?

It doesn't follow that amnesty will lead to more illegals coming in. They aren't coming in to get a Green Card via surreptitious means. They are coming in to work. So let them in legally, screening for sick people, criminals, and other undesirables.

To put it another way, they are going to keep coming to work regardless of the possibility of amnesty. But if we admit enough legally, they won't risk slipping accross the border.

I am also not sure what the issue is with Germany or India. If they aren't sneaking in, no problem. If we are better off letting them in than keeping them out, then give them Green Cards. Where is the problem?

Everyone seems to be freaking out about the illegallity of them coming in to work, but at least claim they don't mind if they come in legally. Thus it seems they are freaking out over people who break a law that prevents a non-problem. If the onyl thing they are doing wrong is breaking a pointless law, where's the beef?

 
At 6/14/2007 6:11 PM, Blogger Adam said...

happyjuggler,

Actually, I think we agree. The problem with amnesty is that was the argument 20 years ago, legalize them all and no more illegals. Unfortunately, what we are discussing, increasing visas and green cards, is not part of the debate. Congress is so concerned with amnesty that they are ignoring the best solution, more green cards.

By the way, the china analogy was in reference to all the people who live on the border having lifestock killed and other damage from people illegally crossing the border. That shouldn't be tolerated, and yet it is because Congress is so concerned that people are being called "illegal."

 

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