Economists know immigrants don’t take citizens’ jobs

Real economists emphatically dispute the claims of Undocumented Economists (who have no economics degree) that immigration hurts any part of the economy.

Economists who actually majored in economics in college, and who publish research that is published in economics journals, find that whether there is little immigration or much, the impact of immigration on jobs and citizens’ wages is so close to zero that some studies say it is slightly above zero and others say slightly below. But the impact on the economy, and on our national deficit, is clearly positive.

By Dave Leach. This is part six of a series. The Spanish translation will hopefully be published in El Enfoque, The rest of the series is posted, with the Spanish translation, at www.CafeConLecheRepublicans.com/Libertad-divertido. There you will find links to documentation, to Youtube bilingual videos, and to a free ebook.

David Roodman economist

Economist David Roodman – immigration’s impact on jobs is not a zero sum game

One way to know this is to read a study of several studies. One such is “The Domestic Economic Impacts of Immigration” by David Roodman, published September 7, 2014. He was hired by Givewell, a charity deciding whether to help immigration.

Roodman showed that immigration is not “like a pie, with a set number of jobs, so that one person’s employment gain is anothers’ loss”, but like a “church congregation, which one person can join to experience communion and fellowship without costing anyone else the same.”

Even when immigration increases by 10%, the most pessimistic studies say natives’ earnings drop only 2%, while other studies say natives’ earnings increase by that much. He says “The economies of destination countries largely appear flexible enough to absorb new arrivals, especially given time.”

Undocumented Economists oppose immigration because, they say, immigrants compete with natives for jobs. But Roodman points out that “The group that appears most vulnerable to competitive pressure from new low-skill migrants is” not citizens but “recent low-skill migrants.” For example “a newly arrived Mexican with less than a high school education competes most directly”not with blacks but “with an earlier-arrived Mexican with less than a high school education.” But “The scarcity of evidence for great pessimism stands as a fact.” And letting more immigrants come legally might reduce the economic ghettoization of immigrant low-skill workers and diffuse their competitive impacts more evenly.”

He said “one way to cushion the impact of low-skill migration on low-skill workers already present is to increase skilled immigration in tandem” because “a migrant inflow that mirrors the receiving population in skills mix is likely to have the most benign effects.”

Everyone who takes a job also creates a job by purchasing the services of others in order to live. As Roodman put it, “ immigrants are consumers as well as producers. They increase domestic demand for goods and services, perhaps even more quickly than they increase domestic production.” When demand increases faster than supply, that creates more jobs at higher wages. “They expand the economic pie even as they compete for a slice.”

It is when immigration is unpredictable that wages can drop for citizens, because it takes time for investors to build the tools and factories needed to put the new migrants to work. “The accepted rule of thumb… is that a sudden, unexpected 10% rise in labor supply reduces pay by 3% in the short term…But in the long run… the US labor pool has doubled many times since 1776, and [investment] capital has more than kept up.”

Between 1990 and 2006, a roughly 100% increase in the immigrant [population] is estimated to have raised wages slightly for natives while reducing them about 10% among less-educated earlier immigrants.” Of course, that is after those earlier immigrants had tripled their income by coming here.

Roodman points out that wages don’t tell the whole economic story. When people produce more with the same hours of work, paychecks can buy more even without a raise. “Productivity…is ultimately driven [increased] by innovation”, and immigrants are on average more innovative than natives. Not only that, but an interesting study of German chemists illustrates how immigrant inventors influence natives to become more inventive.

Inventions don’t just give us more of what our parents had. They give us luxuries and delights our parents never imagined. Roodman reports “skilled foreign workers are extremely important in technology industries”. When we contemplate the long list of inventions of immigrants which we enjoy today, which make our nation the economic powerhouse of the world, we see that the economic contribution from immigrants is dramatic.

But our technology needs all immigrants, not just inventors. Roodman emailed me, “It is true that a huge brain pool is required to support today’s technologies.” That’s because technology needs not just inventors, but salesmen, repairmen, secretaries, and janitors. And not just for new technology, but old technology that we still need. Citizens who vote to limit immigration are voting to limit their own prosperity.

Related articles:

http://www.cafeconlecherepublicans.com/immigration-economics-the-crucial-but-ignored-issue/

http://www.saltshaker.us/HispanicHope/ImmigrationSolution.pdf

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