Why all Americans should be in favor of immigration reform

posted 29 November 2012, updated 29 November 2012

I got my green card last Saturday. It's been a long wait -- my first application for a work visa to the US was in November of 2006, and started applying for a green card in 2008. Since I got it, I've been trying to think of a constructive way to discuss my feelings about the US immigration process. Specifically, I've been talking to dozens of friends, trying to come up with a reason any citizen should be in favor of immigration. My thoughts finally crystallized tonight in a thread on Hacker News about a recent immigration bill.

Immigration is an economic phenomenon

Fundamentally, immigration is a market response. Demand for labor inside of a country exceeds supply -- or, more accurately, the demand for labor in the receiving country exceeds the demand in the sending country.

One of the biggest political problems with immigration in America is people who do not understand this fact. There is a sense that America, as the greatest, best country God has ever given man on the face of the earth, is a magical paradise that everyone in the world is dying to get into under any circumstances. The immigration system is set up to treat immigration as a privilege to be grudgingly bestowed.

It's not. America has immigrants because there are jobs, and when there are no jobs, there are no immigrants. During the recent recession, net immigration dropped to zero, including illegal immigrants, and may have actually reversed. When there are no jobs to be had, there is no flood of people trying to get in. It happens automatically, without needing to build alligator-filled moats.

Immigration is a win-win

The trade in labor that immigration represents is good for all the same reasons that any other trade is good: the commodity (labor) goes for the best price for the supplier to those who will most benefit from it, as indicated by their being willing to pay the most. As in all good trades, both parties benefit. Win-win. Simple!

It gets a little more complicated in the case of immigration, for a bunch of reasons. Firstly: are the suppliers and sellers in this transaction nations, or individuals? It can be looked at both ways.

If the parties in the trade are nations, then the benefit is rather lopsided to the receiving country: they get a new, productive worker, and any money they give that worker is mostly spent inside the receiving country, boosting that economy further. The sending country gets nothing -- even though it spent money educating that worker, providing them with healthcare, etc.. In practice, many immigrants send money back to family in their home country, a substantial flow of money known as remittances, but the majority of the benefit goes to the host country.

If the parties in the trade are individuals, the win-win nature is also obvious: the company gets a worker that they would otherwise have been unable to afford, and the worker gets a better-paying job than they would have got in their home country.

But there's a third way of looking at it, and this is where things get tricky.

Above, I could also have phrased what I said as "the company can hire an immigrant for less than a native would have been willing to work for". In practice, that's not usually how it works. Hiring an immigrant is generally more expensive and inconvenient than a native, and there are regulations in place that stipulate that an immigrant must be paid the same amount as similarly-qualified workers in equivalent jobs elsewhere in the country. If a company could find a native worker to do the same work for the same salary, it would be cheaper and easier to do so. However, the ability to hire immigrant workers at that salary does to some extent prevent the company from raising the salary it's willing to pay.

More simply: while the company wins, and the immigrant wins, a third party worker in the receiving country has, in one sense, lost: they could have got the job if they were willing to work for the same price as the immigrant, but not if they wanted more.

Immigration holds down labor prices, and this is where the trouble starts, because the connection between lower labor prices and greater prosperity for all is indirect and poorly understood.

Cheaper labor makes everybody richer

When labor is cheaper, the goods those workers make can be sold for less (and, in a competitive market, will be). This means anybody buying those products is directly better off -- immigration has saved them money. They will then take that money and spend it on other things, and those sellers will spend it again on yet more things, until eventually somebody gets around to buying the goods being made by the third-party worker. He sells more of those goods, and so makes more money than before.

So from the perspective of an individual worker, immigration freezes or marginally lowers your numerical salary. In exchange, you -- and everybody else in the country -- get goods that are a little better, or a little cheaper. Even though the actual number of dollars in your salary stays the same, the amount of stuff you can buy with it gets bigger.

In addition, the total value created in the country as a whole is greater than if the immigrant had never arrived, because now there are two workers producing economic value instead of one.

If you want to fix the economy, fix immigration

Resistance to immigration is, fundamentally, an acknowledgement of the selfish impulse to be personally better off -- I want a higher salary for me -- rather than making the whole nation richer. That makes it a huge and obvious good economically, and a tough sell politically.

I have a lot more to write about immigration -- in particular, refutations of common arguments against it -- but I wanted to keep this quick and simple. But basically, if you love your country, you should be lobbying to make immigration easier.

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