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Economy Immigration Markets Truth

Illegal Immigration Drives Income Inequality

Rod Thomson

Applying some common sense to the immigration debate offers an immense amount of clarity. And it reveals errors at both ends of the argument: Immigration is a powerful engine for economic growth, but wrong immigration can be a recipe for low wages and the bottom end of the scale, high governmental costs and high wages at the top end of the scale.

And there is wrong immigration. We’ve been practicing it for decades and are reaping the results.

The unstated policy of the past 30 years or so has been to have a de facto open border with Mexico that allows somewhere between 11 million and 20 million illegal immigrants — one of many problems is that we just don’t know — to be here and work, live and enjoy the benefits of this country.

But they are allowed to come illegally with a wink and a nod because politicians have opposed enforcing U.S. immigration laws. Yes, we have some fencing and a Border Patrol and we do stop some and send them back — about 250,000 annually. But they come right back again and eventually get through. And apparently we miss most the first time. The proof that the de facto policy is open borders is the 11-20 million people that are here illegally.

In the rest of the picture, we have legal immigration that takes many years and is an arduous and expensive journey. But because we are controlling it, we are getting immigrants that as a batch are capable of not only improving their own lives, but those of other Americans.

In 2014, 29 percent of the 36.7 million immigrants ages 25 and older had a bachelor’s degree or higher, compared to 30 percent of native-born adults. While that lines up nicely with the existing American population, the bottom end still does not: 30 percent of immigrants lacked a high school diploma or GED certificate compared to 10 percent of native-born Americans.

What this overall picture shows is that we allow — legally and illegally — millions of low-end workers into the country, and that has enormous consequences for low-income Americans.

 

Compassion for whom?

Often the defense of keeping quasi open borders is that we are a “compassionate” nation. Well yes, that is indisputable by practically every definition of charity at home and around the world.

But in the case of immigration, compassionate for whom? While letting millions of poor, unskilled, illiterate immigrants in our country may be showing compassion toward them, it is demonstrably not showing compassion toward tens of millions of poor Americans.

Consider: Millions of uneducated, unskilled and illiterate immigrants from south of the border come to America seeking a better life — or for many, just income to send money back “home.” The economics is undeniable: Their very presence depresses the low end of wages. They not only take millions of entry-level jobs, but also keep all those wages low or even lower them.

So the jobs “Americans won’t do” theoretically, are actually only jobs Americans won’t do at the prevailing wages. Without all those immigrants — legal or illegal, but most are illegal — low end wages would rise. Perhaps a lot. They would have to for supply to meet demand. It’s basic economics and the effect trickles up to middle class incomes.

How much? It’s hard to say, but George Borjas, Professor of Economics and Social Policy at the Harvard Kennedy School of Government, writes in Politico: “Wage trends over the past half-century suggest that a 10 percent increase in the number of workers with a particular set of skills probably lowers the wage of that group by at least 3 percent.”

This explains the flattening or declining of wages in real terms of lower skilled American workers with the huge influx of unskilled workers, and it is a minor tragedy that so few understand the reality.

But this also explains a big social bogeyman in American politics: income inequality.

 

A surprising source of income inequality

In a recent fascinating EconTalk podcast, Russ Roberts interviewed Borjas, himself an immigrant and leading expert in the economics of immigration, and Borjas laid out a fascinating case.

First off, immigration has historically increased capital, even with those who bring nothing to the country. They work for companies who provide goods, a percentage of them start and build successful companies, and overall the economy grows and capital is produced. This dynamic, along with a fairly free market capitalism and rule of law, explains the dramatic economic engine that the United States developed into after the Civil War.

If immigration demographics of skill level roughly mirror the makeup of the United States, then the net impact on the country is economic growth and capital growth, without much relative change in distribution between low, middle and upper incomes. Roughly, it’s a win-win-win.

However, if the immigration demographics do not mirror the country, there will be income distribution impacts. In the United States in recent decades we have seen immigration heavily weighted toward the low income end, depressing wages as explained above.

But it also has a converse impact.

Because capital has been expanded with the immigration, the value of people’s skills at the high end of the scale has gone up. This is because there are relatively fewer of these people to provide their services in an environment of both increased demand for them and increased capital due to immigration that is not mirroring the country’s current demographics.

There may be other policies that drive income inequality in a trade-off for another benefit, but there can be little doubt that the millions of illegal immigrants at the low end not only depress low-end wages but drive up high-end wages and create income inequality.

No public policies can alter the laws of economics. They are immutable. But public policies can alter the laws of immigration, which can positively impact the economics and the people in the economy.

That’s a debate worth having.

Categories
Immigration Truth

The Ideological Litmus Test for Immigrants

By Rod Thomson

There has been considerable and legitimate debate over the rightness and efficacy of profiling criminals. Where is the proper balance between good, proactive policing and infringing on Americans’ civil liberties?

But can the same two-sided case be made for profiling visitors and potential immigrants to our country? Not at all. Certainly no case can be made with the same arguments, starting with the fact that they are not American citizens.

Here’s why an ideological test is legitimate and responsible for immigrants and visitors.

  1. It is well accepted that nations have the right and responsibility to control their borders and control who comes and who goes.
  2. Two reasons they have a responsibility to do so are to ensure that people do not enter who want to foment insurrection and topple the legitimate government, or who are known criminals and pose a threat to the population. No one argues that latter, few would argue with the former.
  3. In the case of insurrection, that means that an ideological component must be at work for a nation protecting itself and citizenry. If a person is known to want to create a rebellion against the United States of America, for instance, there will be some sort of ideology driving that desire. And the government has not only a right, but a duty, to keep that person out of the country.
  4. Any ideology that seeks to replace the United States Constitution and its enumerated rights for citizens is by definition an ideology seeking to wholly replace the government of the United States that is derived from that Constitution, and is therefore an ideology of insurrection and subversion.
  5. Sharia law, just as a for instance, is a religious form of government. The Arabic term sharīʿah means a body of religious law derived from prophecy — as opposed to human legislation derived through democracy. Sharia law is set through religion and is governed by religious leaders. As such, it is antithetical to nearly every portion and amendment in the United State’s Constitution — the structure on which the legitimate government of the United States is built. Sharia law is therefore ideologically incompatible with the country and believes in the eventual overthrow of the government by some means.
  6. Therefore anyone who believes in Sharia law for the United States should not be allowed entrance to the country as a visitor or an immigrant.

The same reasoning can be applied to other ideological positions, such as being an anarchist or Mexican “Reconquistas” who believe that the entire Southwest United States should be conquered in some fashion by Hispanics.

This does not mean that if you disagree with an amendment of the U.S. Constitution or oppose with laws and policies you cannot come in — unless your ideology would lead you to criminally oppose them. And it would not apply to heads of state. But if any known or stated ideological belief leads to the overthrow of the United States government, then the government actually has a mandate to keep out people who hold those ideologies.

It is not bigotry. It is not a question of freedom of religion. It is not an affront to freedom of speech. And such ideological profiling does not apply to American citizens. But it is totally defensible as a required filter for visitors and potential immigrants for the sake of American citizens and visitors.

(NOTE: The picture with this post is from Dearborn, Michigan.)

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