Teens and Immigrants

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A CIS study notes the decline in summer employment among teens and blames it on immigration:

While this summer is shaping up as one of the worst ever for teen employment, a new report from the Center for Immigration Studies (CIS) finds that American teenagers (16-19 years old) have been leaving the labor force for some time, starting long before the current recession. The findings show that competition with immigrants accounts for a significant share of the decline in teen employment. The decline is worrisome because a large body of research shows that those who do not hold a job as teenagers often fail to develop the work habits necessary to function in the labor market, creating significant negative consequence for them later in life.

Many of the states where immigrants are the largest share of workers are also those with the lowest teenage labor force participation, including California, New Jersey, New York, Nevada, Florida, Hawaii, Texas, and Arizona.

Here’s more. The study is poorly reasoned. It suffers from the “lump of labor” fallacy, the fallacy that the number of jobs is somehow exogenously fixed. If that were true, of course, it would seem fairly inevitable that more jobs for immigrants would be fewer jobs for teenagers. But the number of jobs employers are willing to offer varies, depending on, among other things, the wage. Since the wage also affects the willingness of workers to work, so it can move to equilibrate supply and demand. Immigration might mean teenagers earn less, but it shouldn’t cause unemployment. It might cause some teenagers to leave the labor force because working isn’t worth their while. But if the point is just to develop “work habits” and put a line on their resumes, it hardly matters how low the wage is. Mom and Dad are feeding them anyway.

Ah– the immigration critic might reply– but you’ve forgotten the minimum wage! American teens can’t compete with more experienced and mature immigrants by offering their services for lower wages, because the minimum wage puts a floor under that kind of competition. So yes, we have a problem. Which solution seems more liberal, humane, just, etc.– (a) deport millions of foreigners, separating families, depriving people of their best opportunity to work for a better future, deprive businesses of their best workers, and so on, or (b) cut the minimum wage?

For more background reading about the effect of immigrants on the wages and employment opportunities of natives in the United States, see the US-specific suppression of wages of natives page on this website.

Redistribution and immigration

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A student alerted me to this extraordinarily tight and well-argued post by Paul Krugman, entitled “Notes on the Political Economy of Redistribution.” Krugman:

Mitt Romney is getting beaten up, and rightly so, for claiming that redistribution is un-American. Of course we redistribute, and we’ve been doing it on a substantial scale for generations. Medicare, for example, is in effect a strongly redistributive program: it’s supported by a payroll tax (and other revenue) in which the amount you pay in depends on your income, but it supplies a benefit that depends only on your medical costs. From each according to his ability, to each according to his needs!

So no, Obama isn’t a radical for suggesting that we should continue to do what we’re already doing; the real radicals are the people on the right who want to declare much of what our government has been doing these past three generations illegitimate.

The real question – arguably the central question of political economy – is how much to redistribute. And it’s both interesting and important to try to understand how that decision gets made.

There’s a substantial literature (see, for example, the references here (pdf)) that makes use of something like the following model:

1. The government levies taxes on everyone – say, as a constant proportion of income
2. It uses that revenue to pay for a benefit that everyone receives
3. Voters choose parties based on which offers a tax/benefit program closest to the one that maximizes their own utility
4. The end result reflects the preferences of the median voter

This kind of model suggests that the median voter will in fact want redistribution as long as his or her income – median income – is less than average income, because in that case he’ll have more to gain than to lose from a bit of redistribution. And this condition is always met, because income distribution is skewed to the right (there are people with incomes $1 million above the median, but none with incomes $1 million below the median).

But in that case, won’t the median voter favor complete redistribution, with all income taxed away and then handed out as benefits? No, because of incentives: too high a tax rate will discourage effort and reduce overall incomes. So there’s a tradeoff that leads to some equilibrium level of redistribution…

In particular, imagine yourself as a hired gun for the right tail of the income distribution. What would you do in an effort to stop the median voter from realizing that she would benefit from a more European-style system? Well, you’d do everything you can to exaggerate the disincentive effects of higher taxes, while trying to convince middle-income voters that the benefits of government programs go to other people. And at the same time, you’d do everything you can to disenfranchise lower-income citizens, so that the median voter has a higher income than the median citizen.

So far, efforts along these lines have been remarkably successful. But operatives on the right are clearly worried that their three-decade run of success may be coming to an end. Indeed, the whole panic about the lucky duckies and all that can be seen as reflecting a great fear on the part of the right that any day now the median voter will realize where his true interests lie, and start supporting much more redistributionist policies.

Of course, I want to distance myself from the unchivalrous innuendos of the “hired gun” line. Needless to say, most advocates of small government and free markets are conscientious people who are if anything sacrificing personal gain to advocating what they think is right for the country as a whole. But that’s not the point I wanted to make. One might also object to Krugman’s assumption that taking other people’s wealth by force is morally unproblematic, but that’s not what I want to stress, either.

Since I started thinking about open borders at age 19 or so, the moral value that people attach to redistribution has become unintelligible to me. It’s obvious that the really poor do not live in America, but in India, Pakistan, Africa, Haiti, and so forth. Domestic redistribution is at best from the very-rich to the relatively-rich. I can see how democratic politics might cause that to happen; but what serious reason could anyone have to approve of it?

The best thing America could do for the poor is to open the borders. Nothing else comes close. Failing that, the next best thing America could do is just to grow the economy as fast as possible, boosting our demand for the rest of the world’s products and increasing the rate of innovation. That’s why I would reduce domestic redistribution to a minimum. Whether international redistribution is a good idea is an interesting question. There I can see a moral case on both sides. But to think there’s any moral upside to domestic redistribution seems to me a function of not having thought through the logic of open borders.

Final point: the crude median-voter model seems to underlie much of the opposition to immigration.

A Few Responses to Critics

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My co-blogger Vipul Naik is better than I am at reading sources on the other side of the immigration issue. I sometimes like to learn by debating, to know what the other side thinks, and to take their claims and arguments and talking points as a jumping-off point for my own thoughts. Sometimes the other side convinces me and I reverse my views, e.g., on natural rights, which I disbelieved in at the age of 25 but believed in by the time I was 30 or so. But on other issues, including immigration, the truth is more lop-sided, and to read the other side just frustrates me with bad logic and pollutes my brain with false facts. To be fair, I think there are a few needle-in-a-haystack decent arguments on the other side, but to find them I’d have to read so much rubbish that it’s not worth the effort.

So I was glad to read the comments section of Bryan Caplan’s post “Vipul Naik and the Priority of Open Borders,” (a follow-up on Vipul’s post open borders and the libertarian priority list: part 1) because it aggregates a lot of objections to open borders in one place, succinctly stated, and informed by at least some familiarity with Caplan’s arguments. I’ll quote and address them in the order that they appeared. Continue reading A Few Responses to Critics →

Has the era of mass migration come to a close?

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Thomas Sowell’s Migrations and Cultures is an excellent book. Whether talking about Indian immigrants in Uganda or Jews or overseas Chinese, Sowell demonstrates page after page how anti-foreign bias combined with standard restrictionist arguments lead to harrassment and intimidation of market-dominant minorities, mostly immigrants and their descendants. And he shows, with one example after another, how these actions ultimately hurt the natives themselves once the market-dominant minorities pack up and leave, or are forcibly expelled.

Given the contents of the book, I furrowed my brow that the most salient review blurb was from US restrictionist (and himself an immigrant from Canada) Peter Brimelow (author of Alien Nation and founder-cum-editor of VDARE). Here’s what the blurb says (emphasis mine):

Thomas Sowell is one of the wonders of the American intellectual world…Not only is the book crammed with detailed research that even experts will find instructive, but it is willing to look unflinchingly at evidence that suggests migration can be bad as well a good — and even that the era of mass migration may be coming to a close.

So I thumbed back to the conclusion of the book. The last few pages of the conclusion seem to be informed speculation about the future on Sowell’s part, rather than a summary of the book’s contents. So, agreement or disagreement with these could be quite independent of agreeing or disagreeing with the historical analysis presented by Sowell. Continue reading Has the era of mass migration come to a close? →

Why put people behind doors?

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The high versus low skill distinction in the immigration debates is back in the news. A recent bill that would reallocate US visas from a diversity lottery to people with STEM degrees failed to pass in the US House of Representatives on Thursday (September 20). In response, pro-immigration economist Alex Tabarrok wrote a blog post Still the No Brainer Issue of the Year linking back to his earlier piece The No Brainer Issue of the Year. Tabarrok quoted his own earlier piece:

Behind Door #1 are people of extraordinary ability: scientists, artists, educators, business people and athletes. Behind Door #2 stand a random assortment of people. Which door should the United States open?

Tabarrok is considering a hypothetical: suppose there were a limited number of people that the United States could offer admission. What people should it pick?

I think that, from the viewpoint of global benefits, particularly the innovation case for open borders, Door #1 is the right choice. However …

The dilemma posed by Tabarrok is fundamentally artificial. Alex Nowrasteh has pointed out in many blog posts (here and here) that the fundamental problem with immigration systems is not who gets to immigrate, but how many. In other words, there are artificial quantity restrictions on immigration that should be lifted or relaxed. Nowrasteh makes this point in the context of comparing auctions and tariffs as means to regulate immigration, and his argument is that auctions don’t make sense because the quantity restriction is artificial. Donald Boudreaux makes an important point in favor of low-skilled immigration here and Bryan Caplan makes another interesting observation here (more at the high versus low skill page).

Tabarrok’s dilemma reminds me of the many problems of lifeboat ethics. Lifeboat ethics dilemmas usually go as follows: you have a single lifeboat, and can only rescue a subset of people who are in danger of dying. What subset should you choose? How much value should you place on the lives of different people? Lifeboat ethics questions are fascinating and yield important moral insights, but they are hard precisely because they do not describe the ordinary real world. The equivalent to the Tabarrok context would be that there are enough lifeboats to rescue everybody but somebody for some reason decided to deploy only one of the dozens of lifeboats, and forbade other people from deploying the other lifeboats. (see also the killing versus letting die distinction).

Stepping back from the lifeboat analogy to the closed doors analogy, it strikes me as questionable that people should be getting put behind closed doors in the first place. Why build two doors, and then ask a third party to pick? This, after all, is not a reality show game of picking between cars and goats. The people behind the doors are real people with aspirations, dreams, and rights. If there were a genuine lifeboat-type situation where only a certain number of people could be allowed to immigrate, then Tabarrok’s arguments are valid and important. But the first point of order should be to question the premise of quantity restrictions, not to solve a constrained optimization problem.

I should close by saying that it isn’t Tabarrok himself who advocates the quantity restrictions. Tabarrok is in favor of expanded immigration of all sorts — see here and a more complete list here. So, when he chooses the lesser of two evils, it would not be appropriate to blame him. He may also be right that shifting existing visas to high-skilled workers may be the only politically realistic goal in the United States at present (though it seems that that, too, isn’t quite working out). But it’s also important to question the premise of quantity restrictions.

PS: A bunch of links with speculation on what would happen if the United States lifted all quantity restrictions on immigration is available at the swamped page of this website.

UPDATE: Alex Tabarrok responds with a tweet here saying “Yeah, I tend to agree. My pt. is that high-skill imm. is a no-brainer for people in US and if we can’t agree on that… “

"The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP" — Bryan Caplan