The Debate over Immigration

This is a summary of the economic and political issues surrounding the immigration debate by Roger Lowenstein from The New York Times Magazine. It's somewhat long, but it does a good job of summarizing the economic research in this area and is worthwhile reading for anyone interested in immigration issues:

Update: Greg Mankiw and Brad DeLong talk about libertarian, egalitarian, and cosmopolitan explanations for why economists do or do not support immigration. Here's Brad's post:

Greg Mankiw Explains Why Economists Favor Immigration: He does it very very well:

Greg Mankiw's Blog: Why Economists Like Immigration: With members of the House and Senate sparring over immigration reform, it is worth summarizing why most economists are sympathetic with the more welcoming approach of the Senate bill.

The study of economics leaves a person with two strong impulses:

The Libertarian Impulse: Mutually advantageous acts between consenting adults should, absent externalities, be permitted. The ability to engage in such trades is how people in free-market economies achieve prosperity. When the government impedes voluntary exchange, it prevents the invisible hand of the market from working its magic.

The Egalitarian Impulse: The market economy rewards people according to supply and demand, not inherent worth. Markets often fail to provide people the ability to adequately insure themselves against the vicissitudes of life and accidents of birth. We should, therefore, look for ways to help those who end up at the bottom of the economic ladder.

Most economists feel these two impulses to some degree. The difference between right-leaning and left-leaning economists is how strongly they feel each of them. Right-leaning economists have a stronger libertarian impulse, whereas left-leaning economists have a stronger egalitarian impulse.

Although some debates in economics come down to which impulse a person feels more strongly, on immigration the two impulses are reinforcing. The libertarian impulse says, let the American employer hire the Mexican worker, for it is voluntary exchange. The egalitarian impulse takes note that the Mexican immigrant is the poorest person involved in the situation, and he benefits from more relaxed immigration restrictions.

Here is a conjecture: Whenever a policy appeals to both the libertarian impulse and the egalitarian impulse, economists will offer a relatively united view, as they do on the topic of immigration.

I would add a third impulse: the cosmopolitan impulse. Economists tend to think that foreigners are people, and thus that their well-being counts. From the economist's point of view, increasing immigration is a hell of a powerful global economic development policy. The most you can say for restricting immigration is that it is an extremely costly and relatively ineffective domestic anti-poverty policy.

And then, of course, there is George Borjas, who is (a) an economist who is (b) not in favor of immigration from Latin America.

Greg says the libertarian and egalitarian impulses, "are reinforcing" and that is why "economists ... offer a relatively united view ... on immigration," and Brad reinforces this with his cosmopolitan impulse. I would qualify this discussion slightly along Brad's lines. It depends upon your welfare function as well and that is another way to frame the impulse to support, or not to support, immigration. If you are a person, economist even, who cares deeply about the poor anywhere in the world irrespective of borders, the benefits of low-skill immigration will look quite different than they will to someone who believes our allegiance is to our own poor first and foremost (though there are those who argue the costs are low or absent even for low skill domestic workers - see the article below). From a policymaker's perspective, what should U.S. policy address, the welfare of poor anywhere in the world which may represent the preferences of constituents, or should U.S. economic policy attempt only to maximize the welfare of U.S. citizens?:

The Immigration Equation, by Roger Lowenstein, NY Times: The day I met George Borjas ..., the United States Senate was hotly debating what to do about the country’s immigration policy. Borjas professed to be unfazed by the goings-on in Washington. A soft-spoken man, he stressed repeatedly that his concern was not to make policy but to derive the truth. To Borjas, a Cuban immigrant and the pre-eminent scholar in his field, the truth is pretty obvious: immigrants hurt the economic prospects of the Americans they compete with. And now that the biggest contingent of immigrants are poorly educated Mexicans, they hurt poorer Americans, especially African-Americans, the most.

Borjas has been making this case — which is based on the familiar concept of supply and demand — for more than a decade. But the more elegantly he has made it, it seems, the less his colleagues concur. ‘‘I think I have proved it,’’ he eventually told me, admitting his frustration. ‘‘What I don’t understand is why people don't agree with me.''

It turns out that Borjas's seemingly self-evident premise — that more job seekers from abroad mean fewer opportunities, or lower wages, for native workers — is one of the most controversial ideas in labor economics. ...

[Among] economists ..., the consensus of most is that, on balance, immigration is good for the country. Immigrants provide scarce labor, which lowers prices in much the same way global trade does. And overall, the newcomers modestly raise Americans' per capita income. But the impact is unevenly distributed; people with means pay less for taxi rides and household help while the less-affluent command lower wages and probably pay more for rent.

The debate among economists is whether low-income workers are hurt a lot or just a little — and over what the answer implies for U.S. policy. If you believe Borjas, the answer is troubling. A policy designed with only Americans' economic well-being in mind would admit far fewer Mexicans... Borjas, who emigrated from Cuba in 1962, when he was 12 (and not long after soldiers burst into his family's home and ordered them at gunpoint to stand against a wall), has asserted that the issue, indeed, is "Whom should the United States let in?"

Such a bald approach carries an overtone of the ethnic selectivity that was a staple of the immigration debates a century ago. It makes many of Borjas's colleagues uncomfortable, and it is one reason that the debate is so charged. Another reason is that many of the scholars who disagree with Borjas also hail from someplace else .., a surprising number of Ph.D. economists in the U.S. are foreign-born.

Easily the most influential of Borjas's critics is David Card, a Canadian who teaches at Berkeley. He has said repeatedly that, from an economic standpoint, immigration is no big deal and that a lot of the opposition to it is most likely social or cultural. "If Mexicans were taller and whiter, it would probably be a lot easier to deal with," he says pointedly.

Economists in Card's camp tend to frame the issue as a puzzle — a great economic mystery because of its very success. The puzzle is this: how is the U.S. able to absorb its immigrants so easily? After all, 21 million immigrants, about 15 percent of the labor force, hold jobs in the U.S., but the country has nothing close to that many unemployed. ... So the majority of immigrants can't literally have "taken" jobs; they must be doing jobs that wouldn't have existed had the immigrants not been here.

The economists who agree with Card also make an intuitive point, inevitably colored by their own experience. To the Israeli-born economist whose father lived through the Holocaust or the Italian who marvels at America's ability to integrate workers from around the world, America's diversity — its knack for synthesizing newly arrived parts into a more vibrant whole — is a secret of its strength. To which Borjas, who sees a different synthesis at work, replies that, unlike his colleagues, the people arriving from Oaxaca, Mexico, are unlikely to ascend to a university faculty. Most of them did not finish high school....

What economists aim for is to get beneath the anecdotes. Is immigration still the engine of prosperity that the history textbooks describe? Or is it a boon to business that is destroying the livelihoods of the poorest workers — people already disadvantaged by such postmodern trends as globalization, the decline of unions and the computer?

{ The Lopsided-Skill-Mix Problem }

This spring, ... I sampled the academic literature and spent some time with Borjas and Card and various of their colleagues. I did not expect concurrence, but I hoped to isolate what we know about the economic effects of immigration from what is mere conjecture. The first gleaning ... came as a surprise. All things being equal, more foreigners and indeed more people of any stripe do not mean either lower wages or higher unemployment. If they did, every time a baby was born, every time a newly minted graduate entered the work force, it would be bad news for the labor market. But it isn't. Those babies eat baby food; those graduates drive automobiles.

As Card likes to say, "The demand curve also shifts out." ... New workers add to the supply of labor, but since they consume products and services, they add to the demand for it as well... In theory, if you added 10 percent to the population — or even doubled it — nothing about the labor market would change. Of course, it would take a little while for the economy to adjust. People would have to invest money and start some new businesses to hire all those newcomers. The point is, they would do it. Somebody would realize that the immigrants needed to eat and would open a restaurant; someone else would think to build them housing. Pretty soon there would be new jobs available..

But there's a catch. Individual native workers are less likely to be affected if the immigrants resemble the society they are joining — not physically but in the same mix of skills and educational backgrounds. For instance, ... as Borjas asked pointedly of me, what if the U.S. created a special visa just for magazine writers? All those foreign-born writers would eat more meals, sure, but (once they mastered English, anyway), they would be supplying only one type of service — my type. Bye-bye fancy assignments.

During the previous immigrant wave, roughly from 1880 to 1921 ..., the immigrants looked pretty much like the America into which they were assimilating. ... This time it's different. The proportion of foreign-born, at 12 percent, remains below the peak of 15 percent recorded in 1890. But compared with the work force of today, however, the skill mix of immigrants is lopsided. ... [M]any more — including most of the those who have furtively slipped across the Mexican border — don't have high-school diplomas..., and it's those immigrants — the illegal ones — who have galvanized Congress. ...

It baffles some economists that Congress pays so little heed to their research, but then immigration policy has never been based on economics. Economic fears played a part in the passage of the exclusionary acts against Chinese in the late 19th and early 20th centuries, and in the 1920's of quotas (aimed in particular at people from southern and eastern Europe), but they were mostly fueled by xenophobia. They were supplanted in the Civil Rights era by the Immigration and Nationality Act of 1965, which ended quotas and established a new priority based on family reunification. That law, also sponsored by Kennedy, had nothing to do with economics, either. It made the chief criterion for getting in having a relative who was already here.

If economists ran the country, they would certainly take in more immigrants who, like them, have advanced degrees ... and one thing the economists agree on is that high earners raise the national income by more than low earners. They are also less of a burden on the tax rolls.

With the exception of a few border states, however, the effect of immigration on public-sector budgets is small, and the notion that undocumented workers in particular abuse the system is a canard. Since many illegals pay into Social Security (using false ID numbers), they are actually subsidizing the U.S. Treasury. And fewer than 3 percent of immigrants of any stripe receive food stamps. Also, and contrary to popular wisdom, undocumented people do support local school districts, since, indirectly as renters or directly as homeowners, they pay property taxes. Since they tend to be poor, however, they contribute less than the average. ... They are certainly a burden on hospitals and jails but, it should be noted, poor legal workers, including those who are native born, are also a burden on the health care system.

{ Parsing the Wage Gap }

Economists focus on Mexicans not because many are undocumented but because, relative to the rest of the labor force, Mexicans have far fewer skills. And Mexicans and other Central Americans (who tend to have a similar economic background) are arriving and staying in this country at a rate of more than 500,000 a year. Their average incomes are vastly lower than those both of native-born men and of other immigrants. ...

The reason Mexicans earn much less than most Americans is their daunting educational deficit. More than 60 percent of Mexican immigrants are dropouts; fewer than 10 percent of today's native workers are.

That stark contrast conveys, to economists, two important facts. One is that Mexicans are supplying a skill level that is much in demand. It doesn't just seem that Americans don't want to be hotel chambermaids, pick lettuce or repair roofs; it's true. Most gringos are too educated for that kind of work. The added diversity, the complementariness of skills, that Mexicans bring is good for the economy as a whole. They perform services that would otherwise be more expensive and in some cases simply unavailable.

The Americans who are unskilled, however, must compete with a disproportionate number of immigrants. One of every four high-school dropouts in the U.S. was born in Mexico, an astonishing ratio given that the proportion of Mexicans in the overall labor force is only 1 in 25. So it's not magazine writers who see their numbers expanding; it's Americans who are, or would be, working in construction, restaurants, household jobs, unskilled manufacturing and so forth.

That's the theory. But economists have had a hard time finding evidence of actual harm. For starters, they noticed that societies with lots of immigrants tend, if anything, to be more prosperous, not less. In the U.S., wages in cities where immigrants have clustered, like New York, have tended to be higher, not lower. Mississippi, on the other hand, which has the lowest per-capita income of any state, has had very few immigrants.

That doesn't necessarily mean that immigrants caused or even contributed to high wages; it could be they simply go where the demand is greatest — that their presence is an effect of high wages. As statisticians are wont to remind us, "Correlation does not imply causation." ... Maybe without immigrants, wages in New York would be even higher.

And certainly, wages of the unskilled have been a source of worry for years ..., at least if you care about wage inequality. ...[N]ative-born dropouts are earning only a shade more than Mexicans working in this country. But that hardly proves that cheap Mexican labor is to blame. For one thing, economists believe that other factors, like the failure of Congress to raise the minimum wage, globalization (cheap Chinese labor, that is) and the decline of unions are equally or even more responsible. Another popular theory is that computer technology has made skilled labor more valuable and unskilled labor less so.

Also, when economists look closely at wage dispersion, the picture isn't wholly consistent with the immigrants-as-culprits thesis. Look again at the numbers: people at the top (college grads) make a lot more than average but from the middle on down incomes are pretty compressed. Since only dropouts are being crowded by illegal immigrants, you would expect them to be falling further behind every other group. But they aren't; since the mid-90's, dropouts have been keeping pace with the middle; it's the corporate executives and their ilk at the top who are pulling away from the pack, a story that would seem to have little to do with immigration.

This isn't conclusive either, Borjas notes. After all, maybe without immigrants, dropouts would have done much better than high-school grads. Economists look for the "counterfactual," or what would have happened had immigrants not come. It's difficult to tell, because in the real world, there is always a lot more going on — an oil shock, say, or a budget deficit — than the thing whose effect you are studying. To isolate the effect of immigrants alone would require a sort of lab experiment. The trouble with macroeconomics is you can't squeeze your subjects into a test tube.

{ Marielitos in Miami, Doctors in Israel and Other Natural Experiments }

The academic study of immigration's economic effects earned little attention before the subject started to get political traction in the 1980's. Then, in 1990, Borjas ... published a book, "Friends or Strangers," which was mildly critical of immigration's effects.

That same year, David Card realized that a test tube did exist. Card decided to study the 1980 Mariel boat lift, in which 125,000 Cubans were suddenly permitted to emigrate. They arrived in South Florida with virtually no advance notice, and approximately half remained in the Miami area, joining an already-sizable Cuban community and swelling the city's labor force by 7 percent.

To Card, this produced a "natural experiment," one in which cause and effect were clearly delineated. Nothing about conditions in the Miami labor market had induced the Marielitos to emigrate; the Cubans simply left when they could and settled in the city that was closest and most familiar. So Card compared the aftershocks in Miami with the labor markets in four cities — Tampa, Atlanta, Houston and Los Angeles — that hadn't suddenly been injected with immigrants.

That the Marielitos, a small fraction of whom were career criminals, caused an upsurge in crime, as well as a more generalized anxiety among natives, is indisputable. It was also commonly assumed that the Marielitos were taking jobs from blacks.

But Card documented that blacks, and also other workers, in Miami actually did better than in the control cities. ... The only negative was that unemployment rose among Cubans (a group that now included the Marielitos). ... Card concluded, "The Mariel influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers."

Although Card offered some hypotheses, he couldn't fully explain his results. The city's absorption of a 7 percent influx, he wrote, was "remarkably rapid" and — even if he did not quite say it — an utter surprise. Card's Mariel study hit the cloistered world of labor economists like a thunderbolt. All of 13 pages, it was an aesthetic as well as an academic masterpiece that prompted Card's peers to look for other "natural" immigration experiments. Soon after, Jennifer Hunt, an Australian-born Ph.D. candidate at Harvard, published a study on the effects of the return migration of ethnic French from Algeria to France in 1962, the year of Algerian independence. Similar in spirit though slightly more negative than the Mariel study, Hunt found that the French retour had a very mild upward effect on unemployment and no significant effect on wages.

Rachel Friedberg, an economist at Brown, added an interesting twist to the approach. Rather than compare the effect of immigration across cities, she compared it across various occupations. ... She focused on an another natural experiment — the exodus of 600,000 Russian Jews to Israel, which increased the population by 14 percent in the early 1990's. She ... concluded that the Russians hadn't caused wage growth to slacken; they had merely gravitated to positions that were less attractive. Indeed, Friedberg's conclusion was counterintuitive: the Russians had, if anything, improved wages of native Israelis. She hypothesized that the immigrants competed more with one another than with natives. The Russians became garage mechanics; Israelis ran the garages.

{ Measuring the Hit to Wages }

By the mid-90's, illegal immigration was heating up as an issue in the United States... But academics were coalescing around the view that immigration was essentially benign — that it depressed unskilled native wages by a little and raised the average native income by a little. In 1997, a panel of the National Academy of Sciences, which reviewed all of the literature, estimated that immigration during the previous decade had, at most, lowered unskilled-native wages by 1 percent to 2 percent.

Borjas didn't buy it. In 1999 he published a second, more strident book, "Heaven's Door." It espoused a "revisionist" view — that immigration caused real harm to lower-income Americans. Borjas argued that localized studies like Mariel were flawed, for the simple reason that labor markets in the U.S. are linked together. Therefore, the effects of immigration could not be gauged by comparing one city with another. ... Borjas reckoned that immigrants were pushing out native-born Americans, and that the effect of all the new foreigners was dispersed around the country.

The evidence of a labor surplus seemed everywhere. "If you wanted a maid," he recalled of California during the 90's, "all you had to do was tell your gardener, and you had one tomorrow." ... Borjas could calculate that, during the 80's and 90's, ... immigrants caused dropouts to suffer a ... wage loss of 5 percent over those two decades, some $1,200 a year. Other groups, however, showed a very slight gain. To many economists as well as lay folk, Borjas's findings confirmed what seemed intuitive all along: add to the supply of labor, and the price goes down.

To Card, however, what seems "intuitive" is often suspect. He became a labor economist because the field is full of anomalies. "The simple-minded theories that they teach you in economics don't work" for the labor market, he told me. ... In a recent paper, "Is the New Immigration Really So Bad?" Card took indirect aim at Borjas and, once again, plumbed a labor-market surprise. Despite the recent onslaught of immigrants, he pointed out, U.S. cities still have fewer unskilled workers than they had in 1980. Immigrants may be depriving native dropouts of the scarcity value they might have enjoyed, but at least in a historical sense, unskilled labor is not in surplus. America has become so educated that immigrants merely mitigate some of the decline in the homegrown unskilled population. Thus, in 1980, 24 percent of the work force in metropolitan areas were dropouts; in 2000, only 18 percent were.

Card also observed that cities with more immigrants, like those in the Sun Belt close to the Mexican border, have a far higher proportion of dropouts. This has led to a weird unbalancing of local labor markets. For example, 10 percent of the work force in Pittsburgh and 15 percent in Cleveland are high-school dropouts; in Houston the figure is 25 percent, in Los Angeles, 30 percent. The immigrants aren't dispersing, or not very quickly.

So where do all the dropouts work? Los Angeles does have a lot of apparel manufacturers but not enough of such immigrant-intensive businesses to account for all of its unskilled workers. Studies also suggest that immigration is correlated with a slight increase in unemployment. But again, the effect is small. So the mystery is how cities absorb so many unskilled. Card's theory is that the same businesses operate differently when immigrants are present; they spend less on machines and more on labor. Still, he admitted, "We are left with the puzzle of explaining the remarkable flexibility of employment demand."

Card started thinking about this when he moved from Princeton in the mid-90's. He noticed that everyone in Berkeley seemed to have a gardener, "even though professors are not rich." In the U.S., which has more unskilled labor than Europe, more people employ housecleaners. The African-American women who held those jobs before the war, like the Salvadorans and Guatemalans of today, weren't taking jobs; they were creating them.

{ The Personal Is Economic }

Though Card works on immigration only some of the time, he and Borjas clearly have become rivals. In a recent paper, Card made a point of referring to the "revisionist" view as "overly pessimistic." Borjas told Business Week that Card's ideas were "insane." ... Alan B. Krueger, an economist who is friendly with each, says, "I fear it might become acrimonious." Card told me twice that Borjas's calculations were "disingenuous." ...

Card is a political liberal with thinning auburn air and a controlled, smirky smile. His prejudices, if not his emotions, favor immigrants. Raised by dairy farmers in Guelph, Ontario, he remembers that Canadian cities were mostly boring while he was growing up. The ones that attracted immigrants, like Toronto and Vancouver, boomed and became more cosmopolitan. "

Everyone knows in trade there are winners and losers," Card says. "For some reason it doesn't stop people from advocating free trade." ... I honestly think the economic arguments are second order," Card told me when we discussed immigration. "They are almost irrelevant."

Card's implication is that darker forces — ethnic prejudice, maybe, or fear of social disruption — is what's really motivating a lot of anti-immigrant sentiment. Borjas, a Hispanic who has written in blunt terms about the skill deficits of Mexicans, in particular arouses resentment. "Mexicans aren't as good as Cubans like him," Douglas S. Massey, a demographer at Princeton, said in a pointed swipe. ...

{ Immigrants Can Be Complementary }

Economists on Card's side of the debate recognize that they at least have to deal with Borjas's data — to reconcile why the local studies and national studies produce different results. Card shrugs it off; even 5 percent for a dropout, he observes, is only 50 to 60 cents an hour. Giovanni Peri ... at the University of California, Davis, ... replicated Borjas's ... finding that unskilled natives suffer a loss relative to, say, graduates. He made different assumptions, however, about how businesses adjust to the influx of new workers, and as a result, he found that the absolute harm was less, or the gain was greater, for all native-born groups. By his reckoning, native dropouts lost only 1 percent of their income during the 1990's.

Peri's theory is that most of the wage losses are sustained by previous immigrants, because immigrants compete most directly with one another. ... For instance, if you have a big influx of chefs, you can use more waiters, pushing up their wages; if you have a lot of chefs and waiters, you need more Sub-Zeros, so investment will also rise. The only ones hurt, in this example, are the homegrown chefs — the people who are "like" the immigrants.

Indeed, workers who are unlike immigrants see a net gain; more foreign doctors increases the demand for native hospital administrators. Borjas assumes that a native dropout (or a native anything) is interchangeable with an immigrant of the same skill level. Peri doesn't. If enough Mexicans go into construction, some native workers may be hurt, but a few will get promotions, because with more crews working there will be a greater demand for foremen, who most likely will be natives.

Natives have a different mix of skills — English, for instance, or knowledge of the landscape. In economists' lingo, foreigners are not "perfect substitutes." (Friedberg also observed this in Israel.) In some cases, they will complement rather than compete with native workers...

{ Are All Dropouts the Same? }

I talked to half a dozen vintners and a like number of roofing-company owners, both fields that rely on Mexican labor, and frequently heard that Americans do not, in sufficient numbers, want the work. In the case of the vineyards, if Mexicans weren't available, some of the grapes would be harvested by machine...

If you talk to enough employers, you start to gather that they prefer immigrant labor over unskilled Americans. The former have fewer problems with tardiness, a better work ethic. Some of this may be prejudice. But it's possible that Mexican dropouts may be better workers than our dropouts. In Mexico, not finishing high school is the norm; it's not associated with an unsuitability for work or even especially with failure. In the U.S., where the great majority do graduate, those who don't graduate have high rates of drug use and problems with the law.

The issue is charged because the group with by far the highest rate of incarceration is African-American dropouts. Approximately 20 percent of black males without high-school diplomas are in jail. Indeed, according to Steven Raphael, a colleague of Card's at Berkeley, the correlation between wages and immigration is a lot weaker if you control for the fact that so many black men are in prison. But should you control for it? Borjas says he thinks not. It's pretty well established that as the reward for legal work diminishes, some people turn to crime. This is why people sold crack; the payoff was tremendous. Borjas has developed one of his graphs to show that the presence of immigrants is correlated with doing time, especially among African-Americans. Incarceration rates, he notes, rose sharply in the 70's, just as immigration did. He doesn't pretend that this is the whole explanation — only that there is a link.

Card retorts: "The idea that the way to help the lot of African-Americans is to restrict Mexicans is ridiculous." Black leaders have themselves mostly switched sides. In the 20's, A. Philip Randolph, who led the Pullman Porters, spoke in favor of immigration quotas, but the civil rights establishment no longer treats immigration as a big issue; instead it tends to look at immigrants as potential constituents. ...

{ The Limits of Economics }

Economists more in the mainstream generally agree that the U.S. should take in more skilled immigrants; it's the issue of the unskilled that is tricky. Many say that unskilled labor is needed and that the U.S. could better help its native unskilled by other means (like raising the minimum wage or expanding job training) than by building a wall. None believe, however, that the U.S. can get by with no limits. Richard B. Freeman of Harvard floated the idea that the U.S. simply sell visas at a reasonable price. The fee could be adjusted according to indicators like the unemployment rate. It is unlikely that Congress will go for anything so cute, and the economists' specific prescriptions may be beside the point. As they acknowledge, immigration policy responds to a host of factors — cultural, political and social as well as economic. Migrant workers, sometimes just by crowding an uncustomary allotment of people into a single dwelling, bring a bit of disorder to our civic life; such concerns, though beyond the economists' range, are properly part of the debate.

What the economists can do is frame a subset of the important issues. They remind us, first, that the legislated goal of U.S. policy is curiously disconnected from economics. Indeed, the flow of illegals is the market's signal that the current legal limits are too low. Immigrants do help the economy; they are fuel for growth cities like Las Vegas and a salve to older cities that have suffered native flight. Borjas's research strongly suggests that native unskilled workers pay a price: in wages, in their ability to find inviting areas to migrate to and perhaps in employment. But the price is probably a small one.

The disconnect between Borjas's results and Card's hints that there is an alchemy that occurs when immigrants land ashore; the economy's potential for absorbing and also adapting is mysterious but powerful. Like any form of economic change, immigration causes distress and disruption to some. But America has always thrived on dynamic transformations that produce winners as well as losers. Such transformations stimulate growth. Other societies (like those in Europe) have opted for more controls, on immigration and on labor markets generally. They have more stability and more equality, but less growth and fewer jobs. Economists have highlighted these issues, but they cannot decide them. Their resolution depends on a question that Card posed but that the public has not yet come to terms with: "What is it that immigration policy is supposed to achieve?"

Comments

[dryfly]

Sweet Jesus. These morons all miss the point.

It isn't that 'immigration is good' or 'immigration is bad'... its how much immigration, how fast. These guys ALL have their heads up their ass.

We now have approximately 300 million people in the US. There are 6-7 billion on the planet... heading to 10 billion and beyond. The migrations in China prove big numbers can move in a hurry... 30 million people a year will move in an effort to secure a measly $1000 a year job in a cesspool... what hoops would they fly through to land a $10,000 a year job in the west?

Remove gov't immigration hoops what hoops remain? In todays highly mobile world would there be any hurdles without the gov't ones?

I just wish some of these wonks would take a tour of places like rural China or Calcutta or even Juarez, do a fast head count and tell me how many of those 'huddled masses' is too many for us to practically absorb?

Then we talk about cost-benefit once we have a bracket of how many we will be dealing with how soon.

Oh & don't assume the ones we got now are the only ones that we will have to deal with. The actions we take now set the precedent & practices of tomorrow. This is NOT a stable steady state system... we are dealing with some pretty dynamic trends... almost unpredictable.

Damned eggheads.

[save_the_rustbelt]

I was a visiting prof last year at a midwestern university (it is a great school, they were desperate for one year!).

Since I was away from home I spent my evenings reading, writing and blogging in my office. I got to know the cleaning people, who were quite obviously illegals, very well. Nice folks.

When I asked my chairman about it, he said the new all-Hispanic cleaning company had replaced the former company, staffed almost entirely with African-Americans, due to a lower bid. He said the former cleaners mostly when on unemployment and then just had to make due (this particular city had a very high black unemployment rate).

One anecdote, to be sure, but to those of use on the front lines anoft repeated story (when I'm not teaching I'm a consultant and a trainer.

How can anyone in any Ivory Tower come to the conclusion that 6 - 7 million illegals cannot warp the labor market for low skilled labor?

[realpc]

I agree with dryfly. These guys are trying too hard to be cosmopolitan. It might seem like we still have plenty of unpaved areas in the US, but it could disappear faster than you think. We're already worried about the environment -- even conservatives are getting worried! It seems like these cosmopolitan economists haven't even noticed!

You can't just keep having more and more of everything forever.

[johnchx]

STR wrote: "How can anyone in any Ivory Tower come to the conclusion that 6 - 7 million illegals cannot warp the labor market for low skilled labor?"

Indeed. One might also ask how the Ivory Tower came to the conclusion that raising the minimum wage can't reduce employment. :-)

But seriously...it is interesting to compare the reactions to Card's two papers: the one on the New Jersey / Pennsylvania minimum-wage natural experiment on the one hand, and the one on the Mariel boat lift immigration natural experiment on the other. Both yield similar results: empirical observation (in these instances) doesn't support the negative consequences predicted by the theory.

But not everyone seems to find both results equally persuasive. I suspect that most readers will dismiss one result or the other as "not possible," but that few would accept or reject both.

[knzn]

dryfly, You are missing the point. Nobody is seriously suggesting a dramatic increase in the rate of total immigration. Some people might think it’s a good idea, but everyone realizes it isn’t politically feasible. If you look at the proposals being considered by Congress, they have to do primarily with reducing illegal immigration. The main issue is whether or not that illegal immigration should be replaced with legal immigration. It is not a question of how much immigration, how fast. It is a question of whether immigration is bad.

[dryfly]

No knzn - that is NOT true. Congress among other things is considering completely rewriting visa legislation & with it paths for increased immigration. They have been quite clear about this as has Bush. Significant increases are very possible if this legislation ever sees light of day - which I doubt when average folks figure out what it means for them.

Secondly the economists - like the ones in the original entry - discuss cost benefit pro cons of immigration clearly implying either it is good & more is better OR it is not good and less is better. They do this like they were running tests in vitro... when in reality the results will only be known after the tests are run in vivo - real world. It will be tough to get the genie back in the bottle then.

So it isn't out of line to ask the unasked question - how many, how fast? In my mind that is FAR more important than whether legal or illegal.

I think we can handle some illegal immigration as long as the numbers aren't severe. Its undesirable but manageable. On the other hand if we had more legal immigration & the numbers were enormous - say 10 million/year - I think we'd have social & political chaos.

The rate we can absorb bodies effects the quality of life here - QOL is more than aggregate GDP. I realize this is 'selfish'. Lifeboat politics are selfish. But then I didn't advocate we try to support 6 billion plus people on the planet either.

[Movie Guy]

Which subjects are the three original main blog posts really discussing?

ILLEGAL ALIENS / ILLEGAL IMMIGRATION?

LEGAL IMMIGRATION?

U.S. IMMIGRATION POLICY?

Mark Thoma says he is discussing "The Debate over Immigration".

DeLong says "Greg Mankiw Explains Why Economists Favor Immigration".

Mankiw explains "Why Economists Like Immigration".

Uh, huh. Well, which underlying subject and issue are the three posters basing their discussions on? U.S. immigration policy or illegal aliens/illegal immigration? Two different subjects, boys.

Let's look at the bloggers' new media references.

Mankiw: one WaPo article.

Splits Over Immigration Reform On Display From Coast to Coast
Thursday, July 6, 2006
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/05/AR2006070501549.html

Article subject: Illegal aliens/illegal immigration

DeLong: None.

Thoma: one NYTimes Select article.

The Immigration Equation
By Roger Lowenstein
July 9, 2006

Subject(s): "Do illegal immigrants take jobs? Expand the economy? Drag down wages? Create opportunity? Politicians aren't the only ones fighting over the answers." (the subheader lead in line for the NYTimes Select article)

CONCLUSION: The bloggers' supporting news media materials are discussing ILLEGAL ALIENS and ILLEGAL IMMIGRATION along with Congressional legislation to address this problem. Very little language in the legislative proposals deals with other immigration policy considerations.

The ongoing national debate is focused what to do with the present number of ILLEGAL ALIENS in the United States of America and how to slow or stop the flow of ILLEGAL ALIENS. That's the purpose of the Congressional field hearings and legislation in the House and Senate.

If bloggers intend to discuss U.S. immigration policy, they might demonstrate enough intellectual honesty to post information related to such U.S. policy, cite the stats, and explain what they believe should be changed, if anything. Have the posts addressed the specifics of existing U.S. immigration policy? No. Are authorized legal immigration numbers cited? No.

Playing and endorsing a misdirection copout game of explaining "Why Economists Like Immigration" and then "summarizing why most economists are sympathetic with the more welcoming approach of the Senate bill" which is focused on the ILLEGAL ALIENS problem is little more than code for embracing a full force rerun of the 1986 U.S. action which led to subsequent legal status for illegal aliens.

What is being implied (by Mankiw, and apparently embraced by DeLong) is that most economists embrace legal status for ILLEGAL ALIENS, even if the number of ILLEGAL ALIENS is 12 to 20 million or more illegals. If that's the purpose of such misdirection blog posts, then say so instead of hiding out behind the phony titles.

[knzn]

dryfly, I will grant you the point that enforcement actions against illegal immigration are unlikely to be sufficiently effective to offset increased legal immigration under some proposals. But I reiterate, nobody is seriously proposing a dramatic increase in immigration. The INS doesn’t have the resources. The point where “a little bit is good but this is too much” is not a point to which we are going to get.

[Sonia]

Really excellent summary of the research. Why has this topic drawn so much heated and at times intemperate comments on the the Brad Delong and Mankiw blogs?

Is there some degree of consensus that immigrant labor has benefited many of us and probably reduced earnings for low skilled workers by at least a meaningful amount? Can there also be a consensus that sending 10 or 12 million undocumented persons back to their home countries would create a major disruption in some construction and agricultural and service industries and impose a terrible hardship on families? Can we accept a national identity card, provide a path to citizenship, and moving forward provide effective employment enforcement?

[Movie Guy]

knzn - "It is not a question of how much immigration, how fast. It is a question of whether immigration is bad."

Complete nonsense. Dryfly is correct. The rate of immigration growth vs. immigration needs is the issue.

knzn - "But I reiterate, nobody is seriously proposing a dramatic increase in immigration."

I expect that you will have to eat these words later on.

There is little question that we will see a significant ramp up in authorized legal immigrations once the existing U.S. immigration policy is rewritten. Besides, illegal immigration will take off again, and we'll go through a similar drill within 10-15 years but the numbers may be much larger.

[Karl]

"That's the theory. But economists have had a hard time finding evidence of actual harm. For starters, they noticed that societies with lots of immigrants tend, if anything, to be more prosperous, not less."

Why don't they ask the Americans being effected?
These "economists" are too funny.

"In the U.S., wages in cities where immigrants have clustered, like New York, have tended to be higher, not lower. Mississippi, on the other hand, which has the lowest per-capita income of any state, has had very few immigrants."

Well that correlation proves causation! The big immigration crowd is really dancing the two-step.

[Bartolome M Cajas]

Remeber that legal and illegal immigration are two different ways of entering a country. Legal immigration has always been good to any country in particular, but illegal immigration is breaking the laws of another country and should not be tolerated. Otherwise, there will be implications to the country involved. In fact immigration, legal and illegal is now being experienced by many countries of the world. Most who are not successful to enter a country, like the USA, legal or illegal, seek to enter other countries who have lax immigration requirements. The problem is here in our southern border with Mexico where the condition of living is poor. So most of these who enter our border illegaly are not even high school graduates. They will do any work that is avaible to them. The problem is they came here illegally and they have broken our laws. They should never be rewarded for breaking our laws, otherwise more will be coming thinking that there will be another amnesty.

[dryfly]

Sonia do you actually *KNOW* anyone who has crossed the border illegally and made this their home? Are any of them still working at jobs Americans 'won't do'? Cause I do. I've worked with them. I've also met some down in Mexico - far from the border - tell me about their trips up north. They had some strange tales about places I go everyday - but from a different perspective.

You see I'm from an agricultural part of the country that buttresses up against cities with heavy manufacturing. What I see is people come here in droves - legally & illegally - to do the shit jobs you mention, jobs Americans won't do... then as quick as they can they get work doing other things... anything else.

Those jobs are jobs Americans CLEARLY want to do. Jobs like construction & manufacturing which pay pretty well. You can't walk through a factory in Chicago without seeing this process at work everyday.

So the 'fix' we read about (the cards, the amnesty, the citizenship process) will change NOTHING except make the 10 or 12 million 'legal' and permanent and make the need to bring in 10-12 million new underclass as we still won't get the shit jobs done unless we bring in a slug more just like the ones who just came earlier, and the ones who came before them.

Or - and this is a novel concept - pay more for having the shit jobs done. Because many of them - even ugly ones like meat packing - will get done by native born if the price is right. $7/hr to work a pig kill isn't the right price btw.

If we can't 'afford' to kill pigs here maybe the proper answer is to let Mexicans raise the pigs, kill them there & send us the meat.

But the current answers don't fix anything - just push it all out another cycle which brings me back to... how many immigrants, how fast, is too many, too fast?

[dryfly]

"In the U.S., wages in cities where immigrants have clustered, like New York, have tended to be higher, not lower. Mississippi, on the other hand, which has the lowest per-capita income of any state, has had very few immigrants."

Well that correlation proves causation! The big immigration crowd is really dancing the two-step.

LOL. Immigrants might be a lot of things but stupid isn't one of them.... nor are they 'immobile'.

Ask yourself? Where would YOU go under the same circumstances? To a place with crappy wages like Mississippi or some place with some of the highest wages like NYC or Chicago?

I mean they aren't oak trees - they don't have roots holding them down else they wouldn't have come here at all, in the first place. Whats one more move.

Sheeesh.

[anne]

http://www.ksg.harvard.edu/ksgnews/Features/opeds/041806_borjas.html

April 18, 2006

For a Few Dollars Less
GEORGE J. BORJAS - Wall Street Journal

What happens when immigrants enter the labor market? The 1964 edition of Paul Samuelson's influential introductory economics textbook gives the common-sense answer: "By keeping labor supply down, immigration policy tends to keep wages high. Let us underline this basic principle: Limitation of the supply of any grade of labor relative to all other productive factors can be expected to raise its wage rate; an increase in supply will, other things being equal, tend to depress wage rates." Mr. Samuelson wrote this just before the 1965 policy shift that sparked the resurgence of immigration, so he emphasized that restrictions "keep wages high." Today we are concerned with the mirror-image implication: As immigration increases the size of a skill group (such as low-educated workers), the wage paid to that group should fall.

Despite the intuition behind Mr. Samuelson's conclusion, economists have found it surprisingly difficult to document that immigration does, in fact, lower the wage of competing workers. In 1997, the National Academy of Sciences concluded that "the weight of the empirical evidence suggests that the impact of immigration on the wages of competing native workers is small."

Recent research has finally begun to demolish the peculiar (yet influential) notion that an influx of more than 16 million foreign-born workers, which increased the size of the workforce by nearly 15%, had little impact on wages. In part, the problem has been that economists were looking for the wage effect in all the wrong places.

Immigrants cluster in a small number of cities. A third live in three metropolitan areas (New York, Los Angeles and Chicago). In the past, the stereotypical study exploited this clustering by correlating wages and immigration across cities. A negative correlation, indicating that wages are lower in cities penetrated by immigrants, would suggest that immigrants reduce the wage of competing workers. In fact, the estimated correlations bunched around zero, creating the impression that immigrants had little impact.

This inference is not correct for two reasons. First, immigrants are not randomly distributed across cities. If, as seems sensible, high-wage areas attract immigrants, there would be a spurious positive correlation between immigration and wages. This positive correlation could easily swamp any negative wage effect that immigrants might have had.

Natives also respond to immigration. Employers in Michigan, for example, see that Southern California cities flooded by low-skill immigrants pay lower wages to laborers. The employers will want to relocate to those cities to increase their profits. The flow of jobs to the immigrant-hit areas cushions the adverse effect of immigration on the Southern California wage, while slightly worsening conditions in Michigan. Similarly, laborers living in California, who now face stiffer competition, might leave the state to search for better opportunities. These flows of jobs and workers diffuse the impact of immigration across the national economy and tend to equalize economic conditions across localities.

Because local labor markets adjust to immigration, I have argued that the impact of immigration is best measured at the national level. In fact, by examining national wage trends for narrowly defined skill groups for the last 40 years, the wage effects of immigration become quite visible. These trends suggest that a 10% increase in the size of a skill group (for example, a 10% increase in the number of workers who are high school graduates and are around 30 years old) reduces the wage of that group by 3% to 4%.

It turns out that this wage response is roughly what one would have expected....

[anne]

http://select.nytimes.com/2006/03/27/opinion/27krugman.html

March 27, 2006

North of the Border
By PAUL KRUGMAN

"Give me your tired, your poor, your huddled masses yearning to breathe free," wrote Emma Lazarus, in a poem that still puts a lump in my throat. I'm proud of America's immigrant history, and grateful that the door was open when my grandparents fled Russia.

In other words, I'm instinctively, emotionally pro-immigration. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration, and immigration from Mexico in particular. If people like me are going to respond effectively to anti-immigrant demagogues, we have to acknowledge those facts.

First, the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1 percent.

Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration — especially immigration from Mexico. Because Mexican immigrants have much less education than the average U.S. worker, they increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans. The most authoritative recent study of this effect, by George Borjas and Lawrence Katz of Harvard, estimates that U.S. high school dropouts would earn as much as 8 percent more if it weren't for Mexican immigration.

That's why it's intellectually dishonest to say, as President Bush does, that immigrants do "jobs that Americans will not do." The willingness of Americans to do a job depends on how much that job pays — and the reason some jobs pay too little to attract native-born Americans is competition from poorly paid immigrants.

Finally, modern America is a welfare state, even if our social safety net has more holes in it than it should — and low-skill immigrants threaten to unravel that safety net.

Basic decency requires that we provide immigrants, once they're here, with essential health care, education for their children, and more. As the Swiss writer Max Frisch wrote about his own country's experience with immigration, "We wanted a labor force, but human beings came." Unfortunately, low-skill immigrants don't pay enough taxes to cover the cost of the benefits they receive.

Worse yet, immigration penalizes governments that act humanely....

[camille roy]

This sentiment is completely incomprehensible to me:

"If you are a person, economist even, who cares deeply about the poor anywhere in the world irrespective of borders, the benefits of low-skill immigration will look quite different than they will to someone who believes our allegiance is to our own poor first and foremost... From a policymaker's perspective, what should U.S. policy address, the welfare of poor anywhere in the world which may represent the preferences of constituents, or should U.S. economic policy attempt only to maximize the welfare of U.S. citizens?"

Should we care about poor people who are non-Americans? Yes, of course, but NOT at the expense of poor Americans.

This is beyond obvious to me. I really would like an explanation from Prof. Thoma about why tax payers, members of our military, constituents, etc are not more important for American policy makers than poor people elsewhere. Hello?

There is the notion that we are the richest country on earth, so somehow our poor people aren't 'really' poor. Well, that's bogus. 18,000 people die in this country every year simply because they lack health insurance, according to the N.S.F. That number is those whose sole cause of death is lack of health insurance, the number of people where lack of health insurance is a factor may be an order of magnitude greater.

The truth is, the motto of this country could well be, 'Americans treat Americans Like Sh*t.' Or that could be the Republican motto.

For heaven's sake, the lowest wage earners have been losing ground for years. Why not stand up for them, instead of trashing them?

[reason]

What dryfly said, (a little less colourfully):

1. I'm an ex-pat Australian living in Europe so I am both a migrant and the descendent of relatively recent migrants. All people are descendents of migrants (if you go back far enough). So I am not in anyway personally against migration.
2. However, I do see the traditional economists comparitive/static methodology missing something:- costs of adjustment. What in a comparitive static world makes sense may not dynamically make sense. Common sense says that completely open borders causes all sorts of practical problems in a world with large differences in incomes, and lots of costly infrastructure.

[Blissex]

«and moving forward provide effective employment enforcement?»

And a pony for everybody too? :-)

Your summary of the debate is reasonable, but leaves out a bit the sting: the distributional impact on voters is all that matters, or not.

Is it entirely out of charity that The Restaurant Association of America is totally in favour of lifting the incomes of the poor of the 3rd world by allowing them to immigrate to America in whatever numbers? Charity begins at home :-)

The debate about immigration can be summarized even better than you did like this: immigration (like offshoring) have a sharply negative impact on some small groups, and a rather positive impact on most others.

The winners who can vote do vote and contribute to campaigns, the can vote don't vote as much and don't contribute to campaigns.

So the result is: posturing to fool those sore losers, and protection for the interests of the winners.

Something like «effective employment enforcement» is a major, grave step (send to jail American businessmen for improving their profits?) and will only be done if there is an overwhelming electoral advantage in it in terms of votes or campaign contributions. Or ponies of course :-).

[t11]

A Canadian perspective from the Toronto Star

Unless Canada cuts immigrant numbers, our major cities will not be able to maintain their social and physical infrastructures, writes Daniel Stoffman

Jul. 7, 2006. 01:00 AM

It's 2020 and, in Toronto, the days when everyone used the public health-care system are gone. So is the time when a majority of affluent, middle-class parents sent their kids to public schools. In 2020, vast tracts of suburban slums occupy what used to be good farmland on the city's outskirts.

Traffic congestion and air pollution are unbearable. Toronto's reputation as one of North America's most livable cities is a distant memory. It's now known as the " Sao Paulo of the north."

This dystopian vision of the future of Canada's largest city is hardly far-fetched. Toronto is already suffering severe growing pains, the result of the federal government's insistence on maintaining the world's largest per capita annual immigration intake — around 250,000 people a year of whom about 43 per cent come to Toronto. That's more than 100,000 newcomers year after year after year.

It is impossible for any city to maintain its social and physical infrastructure in the face of such relentless population growth.

By 2020, Greater Toronto's population will have ballooned from 5 million to 7 million, or even more if immigration levels are raised higher still.

Every year Mercer Human Resource Consulting ranks world cities according to their liveability. Vancouver always places at or near the top of the list while the other big Canadian cities are among the top 30. Most of the top-ranked cities are relatively small — places like Copenhagen (500,000) and Zurich (340,000).

None of the world's vast urban agglomerations of 10 million or more, such as Sao Paulo and Seoul, is rated by Mercer as desirable places to live. Smaller big cities are more livable because their residents can enjoy the amenities of urban life without the congestion, crime, and pollution associated with sprawling megalopolises.

Canada's livable cities are an unsung national asset. One of the things that makes them special is the presence of immigrants from all over the world who have contributed new energy and cultural diversity. But, in immigration as in everything else, too much of a good thing isn't better. Ottawa's policy of mass immigration, for which no reasonable explanation has ever been offered, risks doing irreparable damage to our cities. This policy of rapid urban growth is being implemented by Ottawa even though it has no jurisdiction over urban affairs and even though the policy has never been stated explicitly.

Yet the impact is already evident.

Highway 401 across Toronto has become the busiest road in North America, the city can't find a place to put its garbage, and its public schools can't afford to provide the English instruction newly arrived children need. In Vancouver, meanwhile, controversy rages over the British Columbia government's plan to expand the Port Mann bridge that links the rapidly growing Fraser Valley suburbs to the city.

Amazingly, the local politicians who have to cope with the results never suggest that perhaps the immigration intake might be lowered from time to time as was standard practice until the late 1980s. To listen to their silence, one would think the relentless influx of huge numbers of new residents was a natural phenomenon like the weather rather than a deliberate federal policy that easily could be changed.

Ottawa might claim it is not to blame for unmanageable urban growth because it just lets the immigrants in, it doesn't tell them where to go. But this would be disingenuous, because Ottawa knows Toronto gets almost half of all immigrants while Vancouver gets 18 per cent and Montreal 12 per cent. Many of those who settle elsewhere at first also eventually wind up in one of the three biggest cities.

Attempts at dispersion are doomed because immigrants want to live where previous cohorts of the same ethnicity are already established. They also want to live in cities for the same reason Canadian-born people do — they are more likely to find jobs there.

The country most comparable to Canada is Australia. Like Canada, it is an English-speaking Commonwealth nation settled in relatively recent history. Like Canada, it has an organized immigration program and has used immigration effectively to enhance population growth and increase the vigour and diversity of its major cities.

Australia's current net migration rate (immigration minus emigration per 1,000 of population) is 3.85. Canada's is 5.85. Before the Progressive Conservative government of Brian Mulroney increased immigration levels and made them permanent during the latter part of the 1980s, a policy continued by the Liberals under Jean Chrétien, Canada had an intake similar, on a per-capita basis, to Australia's.

There is no reason why Canada should have far more immigration than any other country. Canada's existing population is younger than those of most other developed countries and its ratio of working age people to retired ones is higher. If Canada reverted to its traditional, more moderate, immigration program, it could continue to enjoy the benefits of immigration while sparing its cities the problems of unmanageable growth. Immigrants would benefit too. Their economic performance has been in free fall over the past 15 years.

Previously the number of new immigrants varied according to labour market needs. Sometimes it would be cut to give the newly arrived a chance to be absorbed successfully into the economy without intense competition from more new arrivals. Not any more.

An endless stream of newcomers arrives in the big cities with few options but to work in poorly paid jobs such as cleaning houses and driving taxis. Wages of these jobs are thus kept low and the occupants of them have little chance to get ahead.

Previously, poverty levels among immigrants were about the same as those of the Canadian-born. Now they are much worse. According to a report by the Canadian Council on Social Development, whereas the poverty level of those who arrived before 1986 was 19.7 per cent, or slightly lower than that of the Canadian-born, the poverty level of those who came after 1991 was an alarming 52.1 per cent, while that of people born in Canada remained unchanged at around 20 per cent.

If this trend is not reversed, Toronto and Vancouver will by 2020 be home to an entrenched underclass living in slums. Because of gentrification and rising property values in the central cities, these slums will be located in the suburbs, requiring long commutes for those fortunate enough to have employment.

Fan Yang, a reader of the Toronto Star, shrewdly analyzed the impact of federal immigration policy in a letter to the newspaper in 2003. He accused the federal government of "dumping more cheaply acquired labour into the domestic labour pool, regardless of whether there is a healthy demand. Businesses welcome that enthusiastically as they bear no direct cost of unemployed immigrants and only garner the rewards of lower labour costs."

Even skilled workers are doing poorly. According to the 2001 census, male immigrants with a university degree who came to Ontario in the late 1990s were earning after six to 10 years in Canada only 54 per cent of what native-born Canadians with similar qualifications in that province earned.

Remarkably, immigrant labour market performance has declined during a time of increasing shortages of skilled workers. But, as the above data suggest, just bringing in huge numbers of people doesn't solve skills shortages. Mexico has a worse skills shortage than Canada yet it has no shortage of people. The trick is to match immigrants to jobs and our current immigration program doesn't do that well.

Luckily, Canada doesn't need to reinvent the wheel. It merely needs to emulate the solutions that Australia's more successful immigration program has already found, such as requiring the credentials of skilled immigrants to be approved before they come and imposing strict requirements for language skills.

In addition to creating poverty, mismanaged immigration is weakening our public health-care and education systems. By 2020, the huge baby boomer cohort of Canadians will be entering its stage of heaviest reliance on the health-care system. The boomers will not tolerate interminable waits for hip replacements and cancer treatment.

As if the challenge of caring for impatient boomers weren't enough, the presence of millions of new immigrants will intensify the demands on the system. Many of the newcomers will be old because Canada is the most generous country in allowing immigrants to sponsor elderly parents and grandparents.

There is no chance that our health-care system can survive in its current form given the demands on it from these demographic changes. As a result, by 2020 a full-fledged, parallel, private health-care system will be in operation in the major immigrant-receiving cities which are also where most of the boomers live. Private health care will be relied upon not just by the wealthy but by much of the middle class as well.

A similar transformation will occur in education. A report last January conducted for the Elementary Teachers of Toronto said teachers were spending the equivalent of one day a week trying to make up for the lack of English as a second language support for their immigrant students.

"The more time the regular classroom teacher is having to devote to ESL students ... it detracts from the level of service we want for all of our students," union president Martin Long told The Globe and Mail.

In other words, the lack of support for ESL students is hurting all students. This is certainly not the fault of the immigrant children. It is the fault of rash and ill-conceived federal policy. As a result, by 2020 most middle-class families will have abandoned the public system. This will be an unfortunate development because the public schools are where immigrants and Canadian-born get to know each other. They are an important force for social cohesion.

A seemingly plausible argument for boosting the population of at least one Canadian city to 10 million or more would be that the truly great cities of the world are very big. But London and Paris grew to their current size gradually over hundreds of years and their greatness is the result of the wealth of the empires of which they were the capitals.

You don't build London and Paris by adding millions of bodies over a short period of time. That's how you build Mumbai and Mexico City.

Ontario's environment commissioner, Gord Miller, issued a warning last year about what the future holds for Toronto given current trends:

"The environmental impacts of this magnitude of growth ... will compromise the quality of our lifestyle to a stage where it will be unrecognizable," he said. "We already have trouble dealing with our waste right now ... What about another 4 million tonnes a year? What about another 4 million cars?"

The new Conservative government's immigration minister, Monte Solberg, told a House of Commons committee in May that he was concerned about the "huge burden" high immigration levels place on our major cities. He thus became the first immigration minister in at least two decades to show any sensitivity to the impact of immigration policy on the urban environment.

Now it's the turn of local officials to abandon their ostrichlike refusal even to mention immigration when discussing urban growth. Perhaps they fear being branded "anti-immigrant" if they do.

But Pierre Trudeau, in his last year as prime minister, cut immigration by 25 per cent and no one called him anti-immigrant. In that case, good management trumped politics. It's an example the Conservative government would do well to follow

[save_the_rustbelt]

What Dryfly and Movie Guy said.

[Nelson]

Capturing externalities...

I think more people would be in favor of more low skill immigrants if the costs were covered. And I think it would be possible to capture these costs with a bond. If people are willing to spend one or two thousand dollars to hire someone to help get them here illegally, would they not spend that same money to come here legally?

I say charge anyone who wants to come $10,000. This money would be used in case that person were injured and needed emergency health services or if they commited a crime and needed to be deported. If this money wasn't used then they would get $9800 back upon return to their home country, with the remaining $200 used for documentation and administrative costs. Where would they get the $10k from? From loans of course. With a $10k loan @ 10% annual interest that comes to $1000 per year, which is easily earnable in the United States, even at minimum wage.

To me this seems like a fair way to realize the positive aspects of increased immigration without the costs that usually come with it.

[Blissex]

On the usual idea of asking immigrants to pay for the privilege of working in the USA:

«a $10k loan @ 10% annual interest»

Hahahahahahaha! a 10% rate on a $10,000 unsecured load to a foreign citizen without assets and no job security earning at less than minimum wage! And a complimentary pony too of course!

«like a fair way to realize the positive aspects of increased immigration without the costs that usually come with it.»

Hehehehehehe, another very funny joke, because an idea like an immigrant tax to be collected by loan sharks has a cost: it raises the cost of employing immigrants; such a bond as you propose is in effect is a tax on employing immigrants, and its incidence would be on employers via higher immigrant wages.

Current illegal immigrants are the best deal possible for employers: they have no legal rights, they can be paid ex-tax at less than minimum wage, and whatever they get is determined by competition with an ever greater stream of other illegal immigrants.

Given that the wages for illegals are close to the meanest that they can get and still survive, any increase in their cost of living will reflect in higher wages and reduces offer of labour, and it is employers that will pay the cost of the entry bond scheme.

Every time a desperately poor and abused illegal immigrant goes to something like an emergency room a businessman smiles and hears ''ka-ching'', because the profit of employing someone at a wage that cannot afford health care is his, while the cost is socialized.

Never mind that imposing a penalty like a bond on legal immigrants would just drive more of them to become illegals.

Because of course before getting illegals to pay such a bond you would have to catch them, which is something businessmen are in no hurry to see happen.

[Lord]

No wonder economists are confused. When the result doesn't support the preferred policy then there must be something wrong with the result. Thus the need for the confusion.

Externalities are the name of the game. If you don't value the environment, the culture, the society, and the values, no amount of immigration is bad or could be bad. Move to a third world country and leave the rest of us alone.

[Nelson]

Such a bond as you propose is in effect is a tax on employing immigrants, and its incidence would be on employers via higher immigrant wages.And how is this a bad thing?

[Blissex]

«Such a bond as you propose is in effect is a tax on employing immigrants, and its incidence would be on employers via higher immigrant wages.
And how is this a bad thing?»

Whether it is bad or good (and for whom) is irrelevant compared to the notion that it is a futile dream. You might as well wish for a pony for everybody.

It is a futile dream for two reasons:

* The employer lobby is far more influential and powerful than that of those who are damaged by immigration. They are going to resist very successfully any attempt to lower their profits by raising their labour costs.

* Anyhow, a tax on employing immigrants is not going to work when it comes to illegal immigrants, who operate in the cash economy, and for many legal immigrants there is always the option to become illegal.

The only practical way to stop illegal immigration is to start jailing the beneficiaries of the illegality, that is the businessmen, and middle and upper class families, who employ them, and that is simply unthinkable.

Can you jail 10m illegals or even a small fraction? No. But if you jail a few thousand businessmen and rich ladies, that is going to make the rest a lot more cautious. But again, it is simply unthinkable.

The big immigration problem is not poor desperate immigrants, it is their exploiters, who powerfully influence the political process. For an example of how this works, a case about labour by people who are paid better and have more rights than illegal immigrants, which is convicts on forced labour:

http://WWW.DanielGross.net/archives/2006/07/02-week/index.html#000933

«The prison system converts a substantial segment of the population into a commodity that is in desperately short supply — cheap labor — and local-jail inmates are integrated into every aspect of economic and social life. [ ... ] Nowhere else would sheriffs have so many inmates readily at hand, creating a potent political tool come election time, and one that keeps them popular in between.»

Just like for illegal immigrants the key points are «cheap labor» and «a potent political tool come election time».

[Nelson]

The only practical way to stop illegal immigration is to start jailing the beneficiaries of the illegality, that is the businessmen, and middle and upper class families, who employ them, and that is simply unthinkable.Sure man. The only practical way ... is unthinkable. I like my compromise solution better. It may not be perfect, but it would go a long way to bringing the undocumented into the regular economy and it's a lot more practical and cost effective than putting anyone in jail.

[Blissex]

«Basic decency requires that we provide immigrants, once they're here, with essential health care, education for their children, and more.»

Theoretically speaking -- as these welfare provisions are not even a right, in theory or practice, of poor citizens. There is little «basic decency» about the immigration debate or the class war against the ''parasitic and exploitative'' poor by the USA upper and middle classes.

[ ... ] Unfortunately, low-skill immigrants don't pay enough taxes to cover the cost of the benefits they receive.»

This is very contentious and probably wrong, and depends critically on matters of definition, because if there is a difference it is small either way.

First of all illegal immigrants most likely pay far more in taxes (both directly and indirectly) than the nearly non existent benefits that they receive (at best charity usually).

Secondly, as to legal immigrants, a lot of their children are born citizens, and anyhow legal immigrants have no right to even basic health care, and pay taxes without being able to vote. Whatever health care they have is either employer provided, or purchased by themselves, or it is mere charity, not an entitlement. Otherwise a lot of poor citizen would rather pass off as immigrants...

Also, the vast majority of legal immigrants are by design relatives of citizens, and thus are politically protected (all the votes of their relatives protect them).

Anyhow, most immigrants are young and healthy, and almost all welfare is spent on the old and infirm, and young and healthy immigrants are a bargain.

But broadly speaking, given the desperate competition for jobs among both legal and illegal immigrants, any subsidy to them would be a subsidy to their employers.

Every time free health care is provided charitably to these desperates, a business is saving money thanks to lower wages. Ka-ching!

[Nelson]

A tax on employing immigrants is not going to work when it comes to illegal immigrants, who operate in the cash economy, and for many legal immigrants there is always the option to become illegal.I don't know which of us is right on this point. I believe illegals would be willing to pay a modest fee to work here legally. And I also believe that if they covered themselves as far as incarceration and health costs were concerned, it would be a lot easier politically to increase the quantity of illegal->legal status for immigrants.

[dryfly]

Nelson - you know what would make it easier for Americans to accept immigrants & guest workers here?

Reciprocity.

Do you know how difficult it is for Americans to get a job in say Mexico without a North American sponsor all but threatening to shut the place down if they don't get adequate 'outside support'?

Not all Mexico is a hell hole. I have friends who live down there now & they love it. Their pay is less but cost of living is SO MUCH LESS as to more than make up for it. I've visited them - didn't want to go home at first. We toured an industrial park & the process engineer inside me was buzzing.

But it is VERY difficult to to almost impossible to get a visa unless your skills are 'unique' and you have an angry sponsor threatening to raise hell... makes our H1b process look like a cake walk.

FM3 Visa Process

And believe me there are lotsa underemployed people here with skill sets the Mexicans could use in SPADES - tool makers, machinists, engineers, quality assurance inspectors, teachers, health care workers... on and on.

Not everyone would take 'advantage of the opportunity' but more than you might think. I'd be a whole lot more open to guest workers & immigration HERE if it was more of a two way street. It is anything but that right now.

[Nelson]

Of course they should let Americans in to work and buy property. It would help their economy heaps. And I'd be for any treaty that would allow it. But if they don't want to, that shouldn't stop us from trying to bring our underground Mexican work force above ground.

[dryfly]

But if they don't want to, that shouldn't stop us from trying to bring our underground Mexican work force above ground.

Nelson - I'm actually not against doing that PROVIDED real reforms are in place so that it doesn't bring in another huge wave of illegals. I don't see that happening. And even if our 'competent leaders' say this time is different - they'd have to prove it first. Show me.

And in the future - illegals aren't just going to be Mexicans. Chinese, Indians, Middle Easterners... they can move too. Planes & boats work as well as sneakers running across the desert. We are going to see increasing numbers of undocumenteds from around the world unless we start enforcing laws.

And there are billions of them out there.

And I'm not opposed to some increased immigration in principal.

But I do want limits maintained. And standards o who we let in. And then see to it those limits & standards are enforced with real policy.

That is why I ask anyone who says 'immigration is good' if a billion immigrants is still good? If so how about two billion?

Many pooh-pooh that like it couldn't happen. Hell it couldn't. Maybe not in a year but in a half century with modern transportation & lax enforcement - absolutely it could happen. What's stopping it except 'law' and 'enforcement of law'?

Given bad policy, lax enforcement and modern transportation we could be buried in a surprisingly short amount of time.

Reciprocity would help ease some of my angst. It would tell me our 'partners' are willing to take some of the risks we are willing to take. Some of them move here, some of us move there... kinda like a marriage.

But even then there still has to be limits & enforced procedures.

[Nelson]

That is why I ask anyone who says 'immigration is good' if a billion immigrants is still good?I'm not sure. Perhaps our private property based capitalistic free market system allows people to become assets to an economy rather than a liability. My guess is if China had our system of laws and government, they'd be the most powerful nation on the planet.

[Sam]

This debate is not complete without addressing the cost of housing and the cost of education. On our East and West Coasts, increased housing costs has changed the lives of young families forever. Also, the collapse of our public schools has made things even harder for young families. I suspect many Americans are foregoing having families altogether.

Not all immigrants are poor and destitute. Certainly not in Los Angeles. Los Angeles collects the wealthy from all over the world. To buy a place here, you are competing with wealthy Persians (Iranians), Brazilians, Taiwanese, Chinese, etc., etc. Plus, you are competing with second generation Americans who have moved up the ladder.

A Harvard professor at their Center for Housing Studies, Nicolas Retsinas, has done studies on the effects of immigration on housing costs. He found that immigration has caused a jump in housing costs. The media has keyed in on how low-skilled immigrants hurt our poor. It has not caught on how it hurts the lives of our middle and higher-income families.

Something must be done fast. The reality is, given the Supreme Court's interpretation of the 14th Amendment, if the illegal immigrants here are allowed to stay another 10 years, they will have already birthed a new generation of American-born babies of similar numbers. Our population surge will never dissipate. Nor will difficulty of housing, educating, policing so many people.

Someone on the national political scene needs to start asking, "How many people is enough?" The American people are all thinking the same thing.

[Lord]

so that it doesn't bring in another huge wave of illegals

This is the real meaning of amnesty or not. It is not a question of priviledge or payment or punishment, but of whether the situation will be improved or worsened a decade hence. So much for a path to citizenship. One already exists.

[Blissex]

«That is why I ask anyone who says 'immigration is good' if a billion immigrants is still good?
I'm not sure. Perhaps our private property based capitalistic free market system allows people to become assets to an economy rather than a liability.»
«Someone on the national political scene needs to start asking, "How many people is enough?" The American people are all thinking the same thing.»

Well, in terms of physical capacity, a population of a 1.3 billion in the USA is entirely feasible without strain, and probably 2 billion is not a big deal either. From an European point of view the USA is a huge empty and underutilized place, never mind from an Indian or Chinese one.

In economic terms, an extra billion immigrants would mean a *fabulous* time for the majority of today's citizens who own real estate or who are business owners or have government or government licensed jobs.

About 200m out of the existing 300m would be at the top of a much larger pyramid, where their assets (from real estate to government licences) would be far more valuable in an economy where demand has suddendly expanded several times.

To them would go the benefit of having several hundred million destitute rightless immigrants to compete for jobs, for the opportunity to be servants or workers, and paying dearly for being accomodated a dozen to a room.

All those 200m existing citizens could award themselves lifetime government jobs and pensions and luxury health care to be paid by the profits and taxes on the work of those healthy, young, hard working drones.

In an economy of 1300m people, those 200m would be the top 15%, and it is to those in the top 15% that most of the benefits of immigration would flow, just like currently is the case.

The snag is that the existing 15% of the american population are perfectly happy with the current mix of fairly high immigration and fairly high offshoring to achieve the same effect.

It is a bit as if instead of several hundred million indians or chinese emigrating to the USA, a few states or regions of India or China were annexed by it as territories at the same time as a few dozen million latinos come streaming in.

It is absolutely fantastic to be an asset/business owner when the potential markets are growing so much thanks to the integration of large ex-socialist countries into the western system.

[Blissex]

«A Harvard professor at their Center for Housing Studies, Nicolas Retsinas, has done studies on the effects of immigration on housing costs. He found that immigration has caused a jump in housing costs.»

To the 70% of citizens (and their heirs) who own real estate (often supported by debt) that looks like a very good thing....

Higher house prices is a human right of the middle classes. :-)

BTW, that story is not news: one or two decades ago, another paper predicted a collapse in the housing market (and difficulties funding baby boomer retirements as a consequence) following shrinking demand for first homes by the baby bust generation after the baby boom.

The authors revisited the paper recently to explain why the collapse did not happen, and the biggest effect was the exogenous shock of lots of new immigrants more than compensating for the lower baby bust numbers.

Now, rising house prices are just (as The Economist pointed out) a transfer of wealth from non-homeowners to homeowners, and it just happens that most homeowners are older, wealthier, voting citizens, while a significant proportion of non-homeowners are young, poor, nonvoting immigrants.

Note: sure, there are citizens too that are not homeowners. Too bad for them, they are a minority of citizens and anyhow they mostly don't vote either. The American way is like in many other countries to exploit immigrants as hard as possible (''there is a queue outside''), and if a citizen has a profile similar to that of an immigrant, well, unfortunate.

What's not to like? In effect via higher house prices all those immigrants are helping fund the retirement of citizens.