Are President Obama’s proposed immigration reforms enough? About 11 million undocumented workers live in the U.S. today, with more entering daily. Many people are worried about the economic consequences of immigration, but are their concerns valid? According to professional economists, immigration requirements ought to be loosened because immigration is an overall gain for our economy.
Much of the debate surrounding the issue of immigration is marked by a discussion of the impacts of immigration on the U.S. economy. Many of these conversations suffer from shortsighted economic reasoning, or a simple lack of knowledge about the intricacies of how the economy works. Several “myths” subsist, endlessly perpetuated around grills during summer barbeques, despite being entirely incorrect.
The first fairytale in need of an economic fact-check is that immigration takes away American jobs. Professor Benjamin Powell of Suffolk University elucidates the problem with this myth, arguing that it is a “fallacy of the seen and the unseen.” It may be easily noticeable when a local construction crew goes from being mostly domestic workers to all immigrant workers, but what is not obvious is that the increased number of people shopping at the local grocery store opens up another position there. Simply put, the greater demand for goods at local businesses, driven by the larger number of people shopping there, creates new jobs at those local businesses.
A second common fable is that because immigrants are willing to take low wages, they will drive down the salaries of American workers. This claim is factually wrong according to data put together by Giovanni Peri of the University of California. His research found that immigration from 1990 to 2006 actually increased real wages by 2.86 percent. Even the few economists who are skeptical of immigration’s positive effect on wages, notably Professors Lawrence Katz and George Borjas of Harvard, agree that in the long run immigration has positive effects.
The last propaganda piece pointed to by opponents of immigration is that immigrants are a drag on the U.S. economy. Here, as with the other myths, an examination of the economic information is invaluable to determine what really happens because of immigration. Economists Angel Aguiar and Terrie Walmsley modeled the effects of different policy options the U.S. could pursue in order to deal with immigrants. Predictably, they found that removing immigration restrictions increases the United States’ GDP by .53 percent, while deportation would decrease the nation’s GDP by .61 percent. In essence, more people working means more production; it’s as simple as that.12 comments on this story
Putting statistical features aside, numerous studies conclude immigrants, especially skilled immigrants, are a key component of innovation. According to the Kauffman Foundation, foreign-born entrepreneurs account for about 25 percent of patent applications and 26 percent of start-up businesses. The idea that immigrants come to the U.S. in order to leech off of the government is clearly misguided.
The economic arguments against allowing freer immigration are all flawed. There’s no risk to jobs or wages, and fewer restrictions on immigration will help stimulate the economy. President Obama’s current legislation is not enough because the limits it imposes are still too stringent. Limits on immigration need to be removed in order to help our economy thrive.
Josh Smith is studying economics and political science at Utah State University.