Instead of Cutting Legal Immigration in Half Over a Decade, Let’s Increase It

 

I want to make sure I understand this. President Trump is supporting an immigration bill from GOP Senators Tom Cotton and David Perdue that would replace, as The New York Times explains, “a system that favors family ties in deciding who can legally move to the United States with one based on skills and employability.”

So more a merit-based system that gives an edge to those who have advanced skill and restricts those who don’t.

The end result here, according to The Wall Street Journal paraphrasing a Cotton aide, is that “the legislation would decrease overall immigration to about 638,000 in its first year—a 41% drop—and to about 540,000 by its 10th year—a 50% reduction. The number of employment-based green cards issued each year would remain at 140,000.”

A few things:

First, the US is hardly an immigration outlier here, whether it’s the average annual inflow of immigrants as a percent of population or the stock of immigrants as a percent of the population.

Second, it’s not unreasonable to suggest that “the impact of immigration on average native-born workers remains small and inconsistent, with no evidence to show a large detrimental impact on less-educated workers.”

Third, economists strongly agree that the average US citizen would be better off if a larger number of highly educated foreign workers were legally allowed to immigrate to the US each year.

Fourth, a demographic-driven slowdown in US labor force growth means real GDP growth is likely to be slower in the future than in the past.

Fifth, slower labor force growth means we need faster productivity. And “evidence also shows that immigrant scientists and entrepreneurs play a disproportionate role in driving the technological advances that power productivity growth in the United States.”

So given all that, isn’t this bill off point? How about a bill to sharply boost overall immigration with an emphasis on attracting many, many more immigrant scientists and entrepreneurs? This from McKinsey: “The nation could generate tremendous impact on productivity in the near term and beyond 2020 by increasing the annual flow of high-skilled immigrants.”

And as I have also noted:

Roughly half of U.S.-based unicorns — technology startups worth at least $1 billion — were founded by immigrants, with India the top nation of origin. As venture capitalist Paul Graham tweets, “This is a good time to remember that without immigration the U.S. will only have 5 percent of the top people in each field.” And more to the point regarding the Trump ban, as The Atlantic notes, “Iranian-Americans founded or hold leadership positions at Twitter, Dropbox, Oracle, Expedia, eBay, and Tinder.”

If a smart person with a good idea wants to do great things, shouldn’t America be the place that helps make that ambition happen?

Published in Economics, Immigration
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  1. NYLibertarianGuy Inactive
    NYLibertarianGuy
    @PaulKingsbery

    Ekosj (View Comment):

    NYLibertarianGuy (View Comment):
    You have completely ignored the impact of immigration on the demand side. If both supply and demand increase, the wages would not be reduced.

    Indeed. I’ve ignored the impact of increasing amounts of low wage unskilled labor on the demand for low wage unskilled labor. I’ve done so because I don’t know any low wage unskilled people who employ other low wage unskilled laborers. If the supply of unskilled labor called forth its own demand then there would be no impetus for immigrants to leave their homes.

    Off the top of my head I can think of four categories:  Grocery stores. Restaurants.  Movie theaters.  Child care.

    • #31
  2. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    Robert McReynolds (View Comment):

    Jamie Lockett (View Comment):

    Ekosj (View Comment):

    NYLibertarianGuy (View Comment):
    But if you restrict immigration, you are essentially imposing a form of price control on labor that artificially increases prices,

    This is true. And I’m OK with that. As a worker, I don’t want wages driven to zero … Capital mis-allocation be damned.

    In what world would wages ever be driven to 0? Oh, I know, a world where wages are artificially inflated and workers are replaced with machines.

    Are we not already there to some extent? In fact haven’t people like James been telling us that robotics are going to come anyway? What are we to do with all these immigrants when robotics in the workforce increase? What of the native born?

    Indeed what of the native born who pay higher prices because of wage protection and capital misallocation? A great man once said that the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. It never ceases to amaze me how people throw this basic economic idiom out the window when it jeopardizes a dearly help belief. Conservatives recognize that folly of price controls when it comes to say oil, but all of a sudden think those rules don’t apply to labor.

    • #32
  3. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    Ekosj (View Comment):
    Think of it this way. Let’s suppose I could demonstrate that slavery represented a more efficient allocation of capital than human freedom. Certainly Southern plantation owners were making that very argument. You going to support that because it represents a more efficient allocation?

    If you want to attempt this go ahead, the evidence is against you.

    • #33
  4. NYLibertarianGuy Inactive
    NYLibertarianGuy
    @PaulKingsbery

    Ekosj (View Comment):

    Jamie Lockett (View Comment):

    Ekosj (View Comment):

    NYLibertarianGuy (View Comment):
    But if you restrict immigration, you are essentially imposing a form of price control on labor that artificially increases prices,

    This is true. And I’m OK with that. As a worker, I don’t want wages driven to zero … Capital mis-allocation be damned.

    In what world would wages ever be driven to 0? Oh, I know, a world where wages are artificially inflated and workers are replaced with machines.

    Like that’s not coming anyway.

    Think of it this way. Let’s suppose I could demonstrate that slavery represented a more efficient allocation of capital than human freedom. Certainly Southern plantation owners were making that very argument. You going to support that because it represents a more efficient allocation?

    Slavery is an affront to basic human rights.  Individuals don’t have any Constitutional right to exclude competition from other workers.  There’s no equivalence here.

    • #34
  5. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    Bigfoot (View Comment):

    James Pethokoukis: the impact of immigration on average native-born workers remains small and inconsistent,

    I am so glad you mentioned this. My unemployed IT friends who have been replaced by H1B holders at 60% of the former prevailing wage do not know the impact is small. They are also unwilling to give up their families and live crammed with 7 other people in a two bedroom apartment. When their time is up they go back to India with a nest egg to start their own firm and a new batch of H1B holders replaces them.

    How does this example apply to the points system as outlined in the Cotton/Perdue legislation since skills based immigration would favor those making more than those already here?

    • #35
  6. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    NYLibertarianGuy (View Comment):

    Ekosj (View Comment):

    Jamie Lockett (View Comment):

    Ekosj (View Comment):

    NYLibertarianGuy (View Comment):
    But if you restrict immigration, you are essentially imposing a form of price control on labor that artificially increases prices,

    This is true. And I’m OK with that. As a worker, I don’t want wages driven to zero … Capital mis-allocation be damned.

    In what world would wages ever be driven to 0? Oh, I know, a world where wages are artificially inflated and workers are replaced with machines.

    Like that’s not coming anyway.

    Think of it this way. Let’s suppose I could demonstrate that slavery represented a more efficient allocation of capital than human freedom. Certainly Southern plantation owners were making that very argument. You going to support that because it represents a more efficient allocation?

    Slavery is an affront to basic human rights. Individuals don’t have any Constitutional right to exclude competition from other workers. There’s no equivalence here.

    Except that by advocating for wage price controls the people here are saying that they have a right to my money through increased prices. So…

    • #36
  7. NYLibertarianGuy Inactive
    NYLibertarianGuy
    @PaulKingsbery

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Anti-immigration folks have been repeating that mantra since 1875.

    • #37
  8. Mike LaRoche Inactive
    Mike LaRoche
    @MikeLaRoche

    NYLibertarianGuy (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Anti-immigration folks have been repeating that mantra since 1875.

    They were, and are, right.

    • #38
  9. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    Mike LaRoche (View Comment):

    NYLibertarianGuy (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Anti-immigration folks have been repeating that mantra since 1875.

    They were, and are, right.

    This American and immigrant is glad you are so very very wrong.

    • #39
  10. crogg Inactive
    crogg
    @crogg

    I agree with the post, particularly the part about demography. The US fertility rate is the lowest since records were kept:

    http://www.zerohedge.com/news/2017-03-08/us-fertility-rate-lowest-point-cdc-started-keeping-records-1909

    We are not having enough children to sustain growth and our lifestyle.  Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?  I, for one, want my children to have the opportunity to do better than my wife and me.  If the best and brightest from around the world are willing to emigrate to the US, and in return the US is able to negate its fertility problem, then I see this as a win-win.

    Using the merit-based system of the immigration bill to permit the best and brightest to emigrate to the US makes sense to me, but I am wary of decreasing immigration levels to the point of negatively impacting economic growth. It is not clear to me whether the proposed immigration levels in the bill will do this.

    • #40
  11. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    The slow slide of the American Right on immigrants:

    I’m against illegal immigration

    I’m against low skilled immigration

    I’m against immigration

    • #41
  12. Viruscop Inactive
    Viruscop
    @Viruscop

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    • #42
  13. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    crogg (View Comment):
    We are not having enough children to sustain growth and our lifestyle. Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?

    I’m all in favor of a “Make More Babies!” campaign to counter our nation’s Fecundophobia.

    • #43
  14. NYLibertarianGuy Inactive
    NYLibertarianGuy
    @PaulKingsbery

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    Mr. LaRoche is a Nationalist.  He doesn’t think immigration is “replenish[ing]” the country’s own population.  He views it as a form of invasion.  If most Americans thought that way going back to the Founding, most of the country wouldn’t exist.  We wouldn’t have companies like Apple or Amazon, our economy would have stagnated in the 1870s, and we would not have been able to defeat Germany in WWII.

    • #44
  15. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    There’s an easy solution to that.

    • #45
  16. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    DrewInWisconsin (View Comment):

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    There’s an easy solution to that.

    You going to force people to breed?

    • #46
  17. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    Jamie Lockett (View Comment):

    DrewInWisconsin (View Comment):

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    There’s an easy solution to that.

    You going to force people to breed?

    You leftists always think in terms of “force” don’t you? The natural totalitarianism always comes through.

    • #47
  18. Robert McReynolds Member
    Robert McReynolds
    @

    NYLibertarianGuy (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Anti-immigration folks have been repeating that mantra since 1875.

    Before then.

    • #48
  19. NYLibertarianGuy Inactive
    NYLibertarianGuy
    @PaulKingsbery

    Robert McReynolds (View Comment):

    NYLibertarianGuy (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Anti-immigration folks have been repeating that mantra since 1875.

    Before then.

    Probably, but there was no federal immigration law before 1875.

    • #49
  20. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    DrewInWisconsin (View Comment):

    Jamie Lockett (View Comment):

    DrewInWisconsin (View Comment):

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    There’s an easy solution to that.

    You going to force people to breed?

    You leftists always think in terms of “force” don’t you? The natural totalitarianism always comes through.

    I’m a leftist?

    • #50
  21. crogg Inactive
    crogg
    @crogg

    DrewInWisconsin (View Comment):

    crogg (View Comment):
    We are not having enough children to sustain growth and our lifestyle. Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?

    I’m all in favor of a “Make More Babies!” campaign to counter our nation’s Fecundophobia.

    Me too!  But that alone will not reverse a 70 year slide in fertility rates.

    • #51
  22. James Golden Inactive
    James Golden
    @JGolden

    I’m in favor of increasing almost all legal immigration.  Let both relatives and skilled workers in. There’s no reason it has to be one or the other.

    Those against this concept will argue that the immigrants will move in solely to receive the benefits of the welfare state.  Rather than restricting legal immigration, I’d cut back to the welfare state.  Also, I believe the theory that legal immigrants are excessive consumers of the welfare state has been debunked.  (I’m not up on the latest studies so I could be wrong on this last point.)

    • #52
  23. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    crogg (View Comment):

    DrewInWisconsin (View Comment):

    crogg (View Comment):
    We are not having enough children to sustain growth and our lifestyle. Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?

    I’m all in favor of a “Make More Babies!” campaign to counter our nation’s Fecundophobia.

    Me too! But that alone will not reverse a 70 year slide in fertility rates.

    Which is why we need to start today. Gosh! Obama famously said “We can’t drill our way to lower gas prices” and we proved him wrong. We can do that with fertility, too!

    • #53
  24. outlaws6688 Member
    outlaws6688
    @

    Jamie Lockett (View Comment):

    DrewInWisconsin (View Comment):

    Jamie Lockett (View Comment):

    DrewInWisconsin (View Comment):

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    There’s an easy solution to that.

    You going to force people to breed?

    You leftists always think in terms of “force” don’t you? The natural totalitarianism always comes through.

    I’m a leftist?

    Yes. You and Jim Acosta would be great pals.

    • #54
  25. outlaws6688 Member
    outlaws6688
    @

    NYLibertarianGuy (View Comment):
    Mr. LaRoche is a Nationalist

    Oh no. Not the Nationalist (Nazi) virtue signal. If you don’t believe in the leftist narrative on immigration you must be a Hitler disciple.

    • #55
  26. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    DrewInWisconsin (View Comment):

    crogg (View Comment):

    DrewInWisconsin (View Comment):

    crogg (View Comment):
    We are not having enough children to sustain growth and our lifestyle. Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?

    I’m all in favor of a “Make More Babies!” campaign to counter our nation’s Fecundophobia.

    Me too! But that alone will not reverse a 70 year slide in fertility rates.

    Which is why we need to start today. Gosh! Obama famously said “We can’t drill our way to lower gas prices” and we proved him wrong. We can do that with fertility, too!

    I can’t wait to see that ad campaign advocating “drilling our way to higher fertility”!

    • #56
  27. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    Miffed White Male (View Comment):

    DrewInWisconsin (View Comment):

    crogg (View Comment):

    DrewInWisconsin (View Comment):

    crogg (View Comment):
    We are not having enough children to sustain growth and our lifestyle. Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?

    I’m all in favor of a “Make More Babies!” campaign to counter our nation’s Fecundophobia.

    Me too! But that alone will not reverse a 70 year slide in fertility rates.

    Which is why we need to start today. Gosh! Obama famously said “We can’t drill our way to lower gas prices” and we proved him wrong. We can do that with fertility, too!

    I can’t wait to see that ad campaign advocating “drilling our way to higher fertility”!

    You’re welcome.

    • #57
  28. crogg Inactive
    crogg
    @crogg

    DrewInWisconsin (View Comment):

    crogg (View Comment):

    DrewInWisconsin (View Comment):

    crogg (View Comment):
    We are not having enough children to sustain growth and our lifestyle. Our fertility rate is way below the replacement level and has been for a long time.

    If current US citizens are not having enough children, then how are we to sustain growth and our lifestyle?

    I’m all in favor of a “Make More Babies!” campaign to counter our nation’s Fecundophobia.

    Me too! But that alone will not reverse a 70 year slide in fertility rates.

    Which is why we need to start today. Gosh! Obama famously said “We can’t drill our way to lower gas prices” and we proved him wrong. We can do that with fertility, too!

    I have 4 kids. How many do you have?

    • #58
  29. Jamie Lockett Member
    Jamie Lockett
    @JamieLockett

    Moderator Note:

    You've all just about exhausted this line of argument. Start another one, please.

    outlaws6688 (View Comment):

    Jamie Lockett (View Comment):

    DrewInWisconsin (View Comment):

    Jamie Lockett (View Comment):

    DrewInWisconsin (View Comment):

    Viruscop (View Comment):

    Mike LaRoche (View Comment):
    America does not need more immigrants.

    Yes it does. It can’t even replenish its own population by natural births.

    There’s an easy solution to that.

    You going to force people to breed?

    You leftists always think in terms of “force” don’t you? The natural totalitarianism always comes through.

    I’m a leftist?

    Yes. You and Jim Acosta would be great pals.

    Lol okay buddy.

    • #59
  30. DrewInWisconsin Member
    DrewInWisconsin
    @DrewInWisconsin

    crogg (View Comment):
    I have 4 kids. How many do you have?

    Only two, but we got a late start.

    • #60
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