The Economic Consequences of Immigration
Simon, Julian L.
D erhaps the most striking and even .1 the most important thing about economist Julian Simon's new book on immigration is, simply, its embarkation point. Most discussion of the issue in Congress...
...In previous books, and numerous magazine and newspaper articles, he has assailed the limits-togrowth ethos in a number of its manifestations...
...In The Economic Consequences of Immigration, Simon defends with solid and extensive data his refreshing counter-thesis: that, in general, immigrants add more to our stock of capital, and maybe even our pool of physical resources, than they subtract...
...One by one, with always-ample footnoting and usually-ample explanations of economic models, the myths fall...
...And this at a time, as author and scholar Ben Wattenberg has noted, when U.S...
...smorgasbord, with the U.S...
...Asked what level of immigration would be most favorable to the U.S...
...One is a reliance on solid, scholarly data, as opposed to the sketchy numbers available on post-reform immigration...
...Almost never,though, will they find it short of evidence...
...No fighter looks good against a weak opponent...
...only the question of how negative these economic effects are is open to discussion: the trick, given our commitment to freedom of emigration, racial pluralism, and other goals, is to mitigate this necessary evil as much as we can...
...iron puts the whole range of immigration's effects into needed perspective...
...Immigrants are employed at about the same THE ECONOMIC CONSEQUENCES OF IMMIGRATION Julian L. Simon/Basil Blackwell/399 pp...
...standard of living now, 56 percent said "more," 33 percent said "same number," and, again, none said "fewer...
...Indeed, several years ago Simon polled top economists, asking, "On balance, what effect has twentieth-century immigration had on the nation's economic growth...
...N ow, at times, the resulting shadowboxing goes a bit far...
...Upon arrival, they earn less than native workers: about 12 percent to 18 percent less for men, 10 percent to 14 percent less for women...
...The law also offers social benefits to legalized immigrants and (some services) even to illegals—making it more likely that many Hispanic families will fall into the welfare-dependency trap, as Sharon Brown noted recently in a study of the law's impact for the Alexis de Tocqueville Institution...
...39.95 Gregory A. Fossedal THE AMERICAN SPECTATOR FEBRUARY 1990 45 rate as natives, or at slightly higher rates when corrected for demographic peculiarities in the immigrant population...
...In part, precisely because Simon and others have made an irrefutable case for the generally positive effects of immigration, the move is now on for U.S...
...Hence, immigrants can hardly be accused of immediately snatching away the most desirable jobs...
...In Simon's case, there simply isn't a scholarly counterpart to his work for the book to tangle with...
...The opposition, and it is powerful, comes from an unusual political coalition of moderate Republican and Democratic politicians, backed by a curious consensus of reporters and editorialists who seem unusually credulous on this issue...
...Among these is the simple notion that immigrants arrived in the U.S...
...economy...
...Data from Israel, Britain, and Canada confirm that immigrants are a net plus: "When looked at as an investment, similar to such social capital as dams and roads," Simon calculates, "an immigrant family is an excellent investment worth somewhere between $15,000 and $20,000 in 1975 dollars...
...Far from sucking up welfare and other social services, he argues, immigrants tend to use them less, and they more than replace their "cost" to the economy with the value of their production, consumption, and tax payments...
...in record numbers in the 1980s...
...But he does note a 1980 Census Bureau paper by a Mr...
...Most discussion of the issue in Congress and the press starts from the notion that people entering this country are at least something of a new drain on our wealth...
...Like genetic engineering at the cellular level, such efforts to skim the talent crop of other countries for their most desirable people may carry severe unintended consequences for the U.S...
...Whether it hurts a little or a lot, it's still like visiting the dentist...
...In 1974, he finds, abstracting from government data, a typical immigrant cohort used $1,400 in services (compared to $2,300 by a typical native) while paying $3,200 in taxes...
...Similarly, several chapters consider in detail the impact of immigrants on domestic labor markets—concluding again, and again with persuasive evidence, that immigrants generate jobs as much as they "take" them...
...Analysis of the effects of immigration, and of immigration policies, thus becomes more of a trip to the Gregory A. Fossedal is media fellow at the Hoover Institution and chairman of the Alexis de Tocqueville Institution...
...and Western birthrates are relatively low, too...
...Nor does Consequences confine itself merely to battling the negative (if self-contradictory) conventional wisdom of immigrants as either lazy, service-slurping loafers or wealth-seizing opportunists...
...Simon spends some pages discussing the idea of setting up an immigration auction plan—literally selling passage through the golden door to the highest bidders—even though he admits such a plan is not fair, probably not healthy socially, and almost certainly not politically relevant...
...Yet, within a few years, most immigrant groups tend to be out-earning their native counterparts...
...Hence, immigrants are working their way up the ladder—the most spectacular case being that of Asians...
...These matters may be especially important as the immigration question moves to what may be its next political phase...
...happily choosing among a plenitude of positive options...
...By penalizing firms that hire undocumented aliens, the new law weakens the incentive and ability of immigrants to work...
...Such findings buttress a wealth of anecdotal evidence that immigrants tend to be small-business starters...
...Also, Simon might have expanded an important appendix that eyes skeptically (if too briefly) the notion that whatever its economic effects, a high flow of immigration promotes racial tensions, political instability, even war...
...Yet to do these things would have diluted, at least a bit, the book's central strengths...
...Anyone who doubts this is invited to take a look at my own file of some of the racialist mailings put out by generally far-right anti-immigrant groups in recent years...
...On these points, Simon suffers a bit from the lack of any academic opposition...
...Actually, our immigration levels, as Simon notes from Immigration and Naturalization Service statistics, are relatively low---about 0.2 percent of the U.S...
...Among the book's most important sections are those that consider phenomena usually left out of the debate altogether—such as the generally positive effect immigrants seem to have on economic innovation...
...policy, in effect, to shop very selectively—letting lots of people in, but searching carefully for persons with the best educational backgrounds, the most capital, even the "right" ethnic characteristics...
...Simon is not new to the debunking business...
...Never overstating his case, Simon admits that the scholarly data on this point are wanting...
...resident population per year, compared to a historical range generally between 0.4 and 1.4 percent per year...
...They tend, according to several studies cited by Simon, to catch up and pass native earnings in ten to fifteen years...
...This is critical, for as numerous studies have now shown, firms with twenty employees or fewer generate somewhere between 51 and 80 percent of the net new jobs in the U.S...
...after passage of a 1986 reform bill that makes welfarization, tragically, a greater likelihood for present and future immigrants, while making work harder to come by, and discrimination against aliens more likely...
...T. Sullivan, which found that immigrants were "slightly more likely than the U.S.-born to be employed by their own corporation...
...However understandable such a policy, one wonders whether it would really be healthy for us in the long run—i.e., whether it is really in the "national interest...
...Each cluster of people added—certainly within the relevant levels of, say, 500,000 to two million immigrants a year—is a net plus, not a minus...
...Eighty-nine percent said "very favorable," 19 percent, "slightly favorable," and none answered "slightly unfavorable" or "very unfavorable...
...The other is a relentless focus on economics, the issue on which the immigration debate—at least the explicit, respectable debate—has centered...
...Readers accustomed to that breezy, Heritage Foundation "Back-grounder" style will find Consequences more difficult reading...
...economy .and our broader social fabric...
...Simon probably should have given more discussion to the very different effects immigration may now have in the U.S...
Vol. 23 • February 1990 • No. 2
