Illegal Immigration Fallacies

[Ron Paul]

I keep hearing this argument that immigration lowers wages. In one sense, obviously, it does, if immigrants are willing to do a job for less, then residents must accept lower wages (although they will on average be paid at least some premium for things like speaking the language that lower their total cost of employment relative to immigrants).

The problem with this argument, of course, is the central fallacy of all bad economic arguments, that it considers only the consequences of some policy (open borders would be the policy here) on one group (domestic workers that immigrants compete with), and only considers the short term effects of that policy.

The segment of the population that the vast majority of illegal immigrants compete with represents a minority of the labor pool. There are almost no illegal immigrants doing white collar work. Most of the service jobs they take are created by their presence; illegal immigrants tend to provide services for other immigrants for a number of reasons, language, culture, fear of law enforcement, etc. The jobs they compete with Americans for are typically low skilled or unskilled labor, as well as some skilled manual labor such as craftsmen. They do compete with domestic labor for some service jobs, of course, typically housekeeping, child care, landscaping, etc.

Meanwhile, the consumers of the products produced by illegal immigrants is a much larger fraction of the populaton, most notably in food production (farm workers, food processing plants, etc.) and construction.

So while the "costs" of illegal immigration and competition are concentrated on a fraction of domestic workers, the benefits are spread out, gained by nearly everyone. But let us not forget, this is the action of the free market. Labor flows from where it is in great supply with low demand to where it is in low supply and greater demand. To attempt to prevent this to protect domestic workers from that competition is simply that, protectinism: favoring a minority at the expense of everyone else.

But it is worse than this. You might be able to convince people that they would be willing to pay 20% or 30% (or whatever) more so that their fellow Americans would not have to suffer hardship, and hence justify violently preventing the free flow of labor. But the problem is that it misses the big picture.

The big picture is that the only way that real wages can rise relative to prices is by increasing productivity. It is precisely by reducing costs, including labor costs, that allows productivity to go up. Lowered costs yield more profits that can invested into expanding production (increasing supply and hence lowering consumer prices) or into completely new lines of production (creating new products and services that were previously unavailable).

Real wages rise over time because of increased productivity. Wages within a particular industry might fall, or jobs might be lost, but over time newer, better jobs are created because capital can be accumulated that would earlier have been spent on labor costs. The accumulated capital allows more productive lines of production, typically that require higher skilled labor, which in turn necessitates higher wages. Displaced domestic workers eventually move into these industries, and in the long term their lot is improved, both in terms of their own real wages, and their increased purchasing power and increased quantity, quality, an kind of goods and services available to them.

Anyne who does not understand this need only to look at agriculture in the United States. At the advent of the 20th century, 40% of Americans worked in agriculture. Because of steady improvements in farming technologies and techniques, that figure is now 3%. Do we have 37% unemployment? Are we starving from lack of food production? No, of course not. Do the 37% that would be working in agriculture, as well as the 3% who still are, lead better lives or worse lives because of the changes? Better. Far, far, far better.

If it helps you, think of an illegal alien as a machine. He is a piece of equipment that can do a job cheaper than an American laborer can, or maybe is willing to. This is clearly a short term hardship on the minority of Americans with whom these new machines compete for work. However, in the long run, those workers will move into better jobs, at higher wages, and reap the benefits of the increased productivoty created by lowering labor costs.

Those who advocate preventing free labor flow to protect a minority of producers might as well be advocating we outlaw tractor and fertilizers.

This is but a scratch on the surface of immigration fallacies I hear every day. Maybe some more will come out in the thread.

[TomCollins]

The biggest problem most people have with illegal immigrants is the drain on social services. They can afford to come to this country, start families, and live well because they are subsidized by everyone else. Whether or not this cost is greater or less than the benefit of having cheap labor is unclear.

[ConstantineX]

Most reputable economists that I've read believe that immigrants pay more in taxes than they receive in services. Most of those immigrants that do in fact receive lots of government services reside in the very large mega-cities, think LA and NYC. The best arguments against immigration IMO are social disconnection, maybe a future propensity to vote themselves those future provisions, and "national security". Of course, I suspect that again the grandstanding by most Republicans and some Democrats is just political demagoguery designed to exploit the xenophobia prevalent in many parts of the Rust and Bible Belts.

[bobman0330]

Guess the author?

[ QUOTE ]


The recent immigration protests in Los Angeles have brought the issue to the forefront, provoking strong reactions from millions of Americans. The protesters’ cause of open borders is not well served when they drape themselves in Mexican flags and chant slogans in Spanish. If anything, their protests underscore the Balkanization of America caused by widespread illegal immigration. How much longer can we maintain huge unassimilated subgroups within America, filled with millions of people who don’t speak English or participate fully in American life? Americans finally have decided the status quo is unacceptable, and immigration may be the issue that decides the 2008 presidential election.

We’re often reminded that America is a nation of immigrants, implying that we’re coldhearted to restrict immigration in any way. But the new Americans reaching our shores in the late 1800s and early 1900s were legal immigrants. In many cases they had no chance of returning home again. They maintained their various ethnic and cultural identities, but they also learned English and embraced their new nationality.

Today, the overwhelming majority of Americans – including immigrants – want immigration reduced, not expanded. The economic, cultural, and political situation was very different 100 years ago.

We’re often told that immigrants do the jobs Americans won’t do, and sometimes this is true. But in many instances illegal immigrants simply increase the supply of labor in a community, which lowers wages. And while cheap labor certainly benefits the economy as a whole, when calculating the true cost of illegal immigration we must include the cost of social services that many new immigrants consume – especially medical care.

We must reject amnesty for illegal immigrants in any form. We cannot continue to reward lawbreakers and expect things to get better. If we reward millions who came here illegally, surely millions more will follow suit. Ten years from now we will be in the same position, with a whole new generation of lawbreakers seeking amnesty.

Amnesty also insults legal immigrants, who face years of paperwork and long waits to earn precious American citizenship.

Birthright citizenship similarly rewards lawbreaking, and must be stopped. As long as illegal immigrants know their children born here will be citizens, the perverse incentive to sneak into this country remains strong. Citizenship involves more than the mere location of one’s birth. True citizenship requires cultural connections and an allegiance to the United States. Americans are happy to welcome those who wish to come here and build a better life for themselves, but we rightfully expect immigrants to show loyalty and attempt to assimilate themselves culturally. Birthright citizenship sometimes confers the benefits of being American on people who do not truly embrace America.

We need to allocate far more resources, both in terms of money and manpower, to securing our borders and coastlines here at home. This is the most critical task before us, both in terms of immigration problems and the threat of foreign terrorists. Unless and until we secure our borders, illegal immigration and the problems associated with it will only increase.



[/ QUOTE ]

[Ron Paul]

[ QUOTE ]
The biggest problem most people have with illegal immigrants is the drain on social services. They can afford to come to this country, start families, and live well because they are subsidized by everyone else. Whether or not this cost is greater or less than the benefit of having cheap labor is unclear.

[/ QUOTE ]

Another great fallacy. The fallacy here is that the huge costs of "social services" are not because there are immigrants, but rather because there are "social services", i.e. handouts and freebies, that are given to them.

Here is an exercise you can try. Tomorrow, go stand on a street corner and see how many people come up and ask you for money. Perhaps a few bums will hit you up for change. Then take an ad out in the paper saying you will be standing on the same corner next week handing out $100 bills. You will be astonished how many people line up on the corner with their hands out demanding "their" $100 bills.

Stop handing out the money, and people will stop lining up with their hands out.

[Ron Paul]

[ QUOTE ]
Guess the author?

[ QUOTE ]


The recent immigration protests in Los Angeles have brought the issue to the forefront, provoking strong reactions from millions of Americans. The protesters’ cause of open borders is not well served when they drape themselves in Mexican flags and chant slogans in Spanish. If anything, their protests underscore the Balkanization of America caused by widespread illegal immigration. How much longer can we maintain huge unassimilated subgroups within America, filled with millions of people who don’t speak English or participate fully in American life? Americans finally have decided the status quo is unacceptable, and immigration may be the issue that decides the 2008 presidential election.

We’re often reminded that America is a nation of immigrants, implying that we’re coldhearted to restrict immigration in any way. But the new Americans reaching our shores in the late 1800s and early 1900s were legal immigrants. In many cases they had no chance of returning home again. They maintained their various ethnic and cultural identities, but they also learned English and embraced their new nationality.

Today, the overwhelming majority of Americans – including immigrants – want immigration reduced, not expanded. The economic, cultural, and political situation was very different 100 years ago.

We’re often told that immigrants do the jobs Americans won’t do, and sometimes this is true. But in many instances illegal immigrants simply increase the supply of labor in a community, which lowers wages. And while cheap labor certainly benefits the economy as a whole, when calculating the true cost of illegal immigration we must include the cost of social services that many new immigrants consume – especially medical care.

We must reject amnesty for illegal immigrants in any form. We cannot continue to reward lawbreakers and expect things to get better. If we reward millions who came here illegally, surely millions more will follow suit. Ten years from now we will be in the same position, with a whole new generation of lawbreakers seeking amnesty.

Amnesty also insults legal immigrants, who face years of paperwork and long waits to earn precious American citizenship.

Birthright citizenship similarly rewards lawbreaking, and must be stopped. As long as illegal immigrants know their children born here will be citizens, the perverse incentive to sneak into this country remains strong. Citizenship involves more than the mere location of one’s birth. True citizenship requires cultural connections and an allegiance to the United States. Americans are happy to welcome those who wish to come here and build a better life for themselves, but we rightfully expect immigrants to show loyalty and attempt to assimilate themselves culturally. Birthright citizenship sometimes confers the benefits of being American on people who do not truly embrace America.

We need to allocate far more resources, both in terms of money and manpower, to securing our borders and coastlines here at home. This is the most critical task before us, both in terms of immigration problems and the threat of foreign terrorists. Unless and until we secure our borders, illegal immigration and the problems associated with it will only increase.



[/ QUOTE ]

[/ QUOTE ]

Ron Paul. It's one of the few issues I disagree with him on. Although note, he acknowledged that lower labor costs are good for the economy, and the real problem is the hand outs. He also is big on illegal immigration as a pure security issue; since he is a constitutionalist, he views the federal government's job to be pretty much exclusively national defense and some miscellaneous stuff like the mail and patent office.

[Nielsio]

What? Does he really feel the state should do the mail? That would blow my mind.

[DVaut1]

[ QUOTE ]
The biggest problem most people have with illegal immigrants is the drain on social services.

[/ QUOTE ]

Is this even true? In the 1990s, close to two-hundred billion dollars was collected by the Social Security Administration against bad/fraudulent social security numbers. Something close to 75% of this money is estimated to have been paid by illegal immigrants:

http://www.nytimes.com/2005/04/05/busine...ner=rssuserland

I assume most illegal immigrants rent, so their rent costs likely have various local and state property taxes rolled into their rental fee by their landlords, so they bear that burden as well, at least indirectly. I don't think illegal immigrants are avoiding various sales taxes, either.

Even if they illegal immigrants aren't paying federal or state income taxes, most probably make so little in income that they'd have been refunded whatever was collected anyway.

So I have my doubts the "illegal immigrants are a huge drain" narrative corresponds with the observable reality.

[bkholdem]

I know dozens of illegal immigrants, the overwhelming majority are paid by company check (and it is commonplace for them to have 2-3 jobs) where federal, state, ss, etc taxes are taken out. None of them file taxes whereby if they were legal and did they would be getting all the state and federal tax money back in refunds.

When I was a kid you could claim 'exempt' with your employer so that fed and state taxes were not deducted. You would be responsible for filing quarterly or whatever if you were going to owe taxes at the end of the year, but if you were a minimum wage teenager it would work out so that you did not owe taxes, hense you did not have to have them taken out weekly.

They did away with that I think so people are 'forced' to have the taxes deducted weekly. So all the immigrants are paying and govt is keeping and using it, whereby their legal counterparts are filing returns and getting fat refund checks.

[The once and future king]

Even though it may cause damage to the nature of time and space itself, I agree totally.