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Institutional Immigrant Assimilation
Ala Don Boudreaux’s style at Cafehayek, below is a letter I sent to the Wall Street Journal last week:
Jason L. Riley’s “Keep the Immigrants, Deport the Multiculturalists” (May 15) expertly describes the optimistic reality of immigration while castigating multiculturalists who wish to destroy the American assimilation machine. To aid in assimilation and increase the economic benefits of immigration many millions more should be admitted.
According to the 2006 census, 43% of the U.S. foreign born population has at least some college education. Generally, the more educated and wealthy an immigrant is, the faster he will assimilate. But the present immigration system severely restricts the entry of educated foreigners through the labyrinthine H-1B visa system.
Uneducated immigrants should be welcomed, but the institutionalized masochistic insanity of our present immigration system which incentivizes illegality while punishing the educated and law-abiding, needs desperate reform. Multiculturalism is a social cancer which could erode the benefits of immigration. However, the only cure to this cancer is not closed borders, but to liberalize, simplify, and dramatically increase legal immigration.
Alex Nowrasteh
Policy Analyst
Competitive Enterprise Institute
Americans will be made poorer if immigration is further restricted, but one of the greatest casualties of more restrictive immigration policy will be our institutions which assimilate new comers.
Immigrants Help the CIA
This story reveals a startlingly obvious fact: immigrants help American intelligence agencies.
“The intelligence agencies lack people who can speak the languages that are needed most, like Arabic, Farsi and Pashtu. More importantly, the agencies lack people with the cultural awareness that allows them to grasp the nuances embedded in dialect, body language and even street graffiti.”
The U.S. government is still dealing with a massive backlog of intercepted terrorist communications (read here, here, and here) and is unable to translate them. Part of that problem is that many of the qualified speakers cannot obtain a security clearance for very good reasons. But another part of the problem is the dearth of speakers.
Allowing trustworthy immigrants who speak these languages to move to the U.S. will give more choices to U.S. intelligence agencies. There are millions of Christians in Iraq, Egypt, Lebanon, Iran, and Jordan who not only speak Arabic, but who are also well-acquainted with Middle Eastern culture. These individuals fear Islamic jihad and many would probably welcome a chance to immigrate to the U.S. if the door was open to them. This is a large pool of people who can greatly aid us in the War On Terror, but aren’t allowed to because of our restrictive immigration policies.
Either we can trust foreigners who have nothing to lose if they become double agents or we can trust immigrants who have moved themselves and their families to America. Although neither choice is perfect, it’s plain that we should trust the immigrant who brings his family here and places them under the watchful protection of American police over the person who remains a foreigner.
Whether it’s fighting a War On Terrorism or growing our economy, people remain the most valuable resource.
They Took Our Jobs!
This Wall Street Journal article about Ben Bernanke’s “Bubble Laboratory” is a fascinating look at economic bubbles and the changing nature of the Federal Reserve Board. But what caught my eye was that the three economists selected by Bernanke to research and advise on this topic are all immigrants.
Does anyone think that Americans are made poorer because these immigrants are “took our jobs?”
Immigrant Assimilation
The Manhattan Institute study about immigrant assimilation attempts to measure civic values of immigrants. Participation in the naturalization process and military service are used to gauge this metric. But the study admits that this is problematic:
“Changes in civic assimilation could, in theory, reflect either changes in immigrant civic attitudes or changes – perhaps even anticipated changes – in policy” (4).
Many in the anti-immigration crowd complain about a lack of immigrant assimilation. Although immigrant assimilation into American society has never been quicker or more widespread, our terrible immigration laws encourage many to forgo civic assimilation. This is a clear case of unintended consequences.
This comment raises two obvious questions:
1) Are there any better metrics to gauge immigrant civic assimilation?
2) How much does government hostility toward immigration prevent assimilating?
Globalization and Immigration
Here’s a common question I hear when debating immigration and globalization:
“If the world is becoming so much wealthier due to globalization, then why are so many people from nations with rapid economic growth immigrating to the U.S.? Shouldn’t they stay in their native countries if they are truly developing?”
The answer, I think, is that a rural Chinese peasant with an income of $100 per annum cannot possible afford to move to the United States. But if that peasant’s income rises to $5000 per annum due to accelerating economic growth, he can suddenly afford to move to a place where he can increase his income even further.
How many immigrants do you know from desperately poor places like Sub-Saharan Africa or other places untouched by globalization? Probably not many (if any). But how many do you know from places impacted by globalization like China, India, Brazil, or Mexico? Probably quite a few.
As economic growth picks up, we should expect to see more immigration at first, then to see decreasing rates of immigration as incomes rise beyond a certain threshold. Increasing incomes give people more options, not just for consumption or investment, but also for immigration.
Immigration Is Good for the Economy 2: Inventions
The falsely praised THE FISCAL COST OF IMMIGRATION by Edwin Rubenstein doesn’t even mention “patents” or “entrepreneurship” anywhere in his study. This oversight (I don’t want to accuse Edwin Rubenstein of intentionally misleading his readers) casts real doubt on the sincerity of this report.
Focusing on skilled immigration, Professor Jennifer Hunt in this study states:
“Twenty-six percent of U.S.-based Nobel Prize recipients from 1990-2000 were immigrants (Peri 2007), as were twenty-five percent of founders of public venture-backed U.S. companies in 1990-2005 (Anderson and Platzer n.d.), compared to a foreign-born population of 12% in 2000” (Hunt, 1),
and that:
“Immigrants account for 24% of patents, twice their share in the population” (Hunt, 3),
and:
“A one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 8-22% . . . the state-level results mean that the 1990-2000 increase in the population share of this group from 2.2 to 3.5% increased patents by 10-29% . . . I find that immigrants have more than double the impact on innovation that natives do” (Hunt, 4).
Immigrants are more inventive than natives. Period.
Another World Bank working paper on foreign graduate student by Chellaraj, Maskus, and Mattoo computes:
“That the sensitivity of patents activity with respect to foreign graduate students is more than four times larger than that with respect to skilled immigration” (18). “A marginal impact of another foreign graduate student [is] around .63 patent applications” (20).
While some patents turn out to be totally worthless, some have radically improved human welfare. The point is that the next Carnegie or Einstein could be wasting away in an undeveloped nation instead of filing patents in America. How much tax revenue has been collected due to the enormous number of patents filed by foreign student or immigrants? How many thousands of firms make more money because of these inventions? Also, how many billions of dollars in value have been created by ventures where one of the founders was an immigrant? Google, Yahoo!, and eBay were all co-founded by Americans who immigrated as children.
All of these revelations and more show THE FISCAL COST OF IMMIGRATION by Edwin Rubenstein is a work of political ideology with a thin veneer of sincerity.
Immigration Is Good for the Economy 1
These comments made yesterday have prompted me to write a series of blog posts. I only hope that zeezil or other commentators decide to respond to my specific points instead of pasting cookie cutter commentary.
THE FISCAL COST OF IMMIGRATION by Edwin Rubenstein is a fatally flawed study which uses poor methodology. Rubenstein claims that tax revenue was lower than expected because of immigrant competition driving down wages. That claim assumes two things: 1. Wages have decreased and 2. Immigrants decreased them. Neither of those assertions is true. As Professors Russ Roberts and Don Boudreaux at George Mason University are fond of pointing out on cafehayek, statistics which purport to show a decrease in wages since the 1970s do not include factors such as overestimation of inflation, increased paid vacation time, healthcare benefits, dental care, and employer matching savings plans. Considering those factors, wages have risen substantially since the 1970s.
Far from decreasing wages, immigrants have INCREASED the wages of 92% of Americans between 1970 and 2000. The 8% of Americans negatively impacted by immigration are those who failed to earn a high-school degree. RETHINKING THE GAINS FROM IMMIGRATION: THEORY AND EVIDENCE FROM THE U.S. by Ottaviano and Peri clearly and concisely reports these facts. Far from hurting our economy and decreasing tax revenue, immigrants fill the government’s coffers.
Immigration Assimilation
The Manhattan Institute released a fantastic study called Measuring Immigrant Assimilation in the United States. As the title suggests, it sets forth a clear statistical methodology for measuring the economic and civic assimilation of different immigrant groups. One interesting passage is:
“The slow rates of economic and civic assimilation of Mexicans apart from other immigrants, and may reflect the fact that the large numbers of Mexican immigrants residing in the United States illegally have few opportunities to advance themselves along these dimensions.”
Could it be that the Federal government’s policy toward immigration has the unintended negative consequence of slowing assimilation? If entire groups of people are legally restrained from using the courts and are constantly afraid of being deported, it makes sense that they will stick to their ethnic and cultural communities. Legalization is the only way to turn recalcitrant illegal immigrants into Americans.
On the positive side, assimilation rates for Mexican immigrants since 1995 seems to be increasing, just as other ethnic immigrant groups have done. Despite the government’s best intentions and a few laggards, immigration to the United States is a stunning success.
Some Advice For Pro-Immigration Protestors
Many of the problems affecting America’s modern pro-immigration movement were evident during the recent May Day rallies. Unless addressed, they will condemn immigration efforts to failure. Since I sympathize with the activists’ overall goals, I would like to offer some advice.
One, be pro-American. Whatever you do, do not wave Mexican, Guatemalan, or any other flag at your protests. Remember, you want to stay in the United States, not go back to your native countries.
Two, reject the political Left’s multiculturalist propaganda. The United States is a melting pot that has melded a uniquely American culture from myriad national influences. American culture is dynamic because newcomers do their best to assimilate. Americans are keenly aware of multiculturalism’s balkanizing influence in some European nations. They do not want it here.
Three, do not deride America as bad and unjust. No doubt, immigration raids and deportations are traumatic and devastating. But if your goal is to stay in the U.S. to work and provide for your family, blame the government’s policies, not the nation.
Four, appeal to Americans’ self interest. Explain why immigration is good for America. Highlight the stories of immigrant entrepreneurs like Metin Ozen, founder of Ozen Engineering. Or the fact that 40 percent of U.S. science and engineering Ph.D.s are foreign-born. Or that 24 percent of all international patents filed form the U.S. listed a foreign worker as an inventor or co-inventor. Or that immigrants pay more in taxes than they receive in government benefits.
Five, make it clear that you want to follow the law. Without a doubt, America’s immigration laws are broken. For most illegal immigrants, sneaking into the country is the only way to get here. But Americans, rightly, have great respect for our laws and institutions. Point out that immigrants commit fewer crimes, on average, than native born Americans. This should be easy to do—the U.S. is enjoying its lowest crime rates since the 1950s.
Six, don’t blame the free market, and focus on reforming bad immigration laws. Capitalism is the reason America is a rich desirable place to live. Were entrepreneurs allowed to operate freely and without restraint, they would be able to hire anybody they want from anywhere in the world.
Ignore these simple truths, and you will fail to reform America’s broken immigration regime. The late economist Julian Simon rightly called people “the ultimate resource”—and that is true regardless of national origin. A steady flow of immigrants, and their labor, ideas, and innovations, will help reinvigorate America’s economy, as those immigrants help themselves.
Ethanol Subsidies Increase Illegal Immigration? Yes
Public policy is rife with unintended consequences. The newest is that soaring food prices caused by ethanol subsidies in the U.S. are causing food prices to skyrocket in Mexico. While this is old information, what’s news is how this is contributing to civil disorder and other acts of violence in Mexico.
Brigadier General Greg Zanetti believes that ethanol subsidies combined with a slowing American economy and continued drug violence on the border could contribute to a massive flow of refugees, not migrants, across the border. Chalk this up to another unintended consequence of bad public policy. A subsidy which is intended to “get us off of our foreign oil addition” (Their words, not mine) and help our national security could cause a flood of refugees across the American border. Perhaps it’s time that our government focuses more on this hemisphere than some other ones I could name.
Ethanol certainly won’t power our cars, but it could fuel chaos south of the border.
Christmas Card Arrives 93 Years Late
We all know the Post Office is a lackadaisical and inefficient behemoth, but I never thought it was this bad!
Who Needs A High Tech Industry?
There’s a lot of political anger associated with the recent immigration debate. But with all the attention paid to unskilled immigrants from Mexico and the rest of Latin American, most people ignore the large number of highly skilled and educated workers who are also trying to work in the United States.
Engineers, computer scientists, and other scientists undeniably help the U.S. economy. About 25 percent of the technology and engineering companies launched in the past decade had at least one foreign-born founder.
H-1B visas, three year work visas which companies use to sponsor foreign workers, are limited to only 65,000 per year. These visas are also the most sought after by foreign skilled laborers. In April 2007, the first day that companies could apply for such visas, the government was swamped by 133,000 applications!
If the U.S. government wants a thriving technology industry to expand, it must grant many more H-1B visas to foreign skilled labor. The Lou Dobbs’s of the world simultaneously decry U.S. losses to competition yet want to restrict the flow of all highly skilled people into the United States. I guess protecting the jobs of a few steel workers is worth sacrificing the high tech industry. Too bad Mr. Dobbs wasn’t President 100 years ago . . . we’d still be using the horse and buggy if he had his way.
Ala carte is not on the menu
Frank Ahren’s “FCC Moves to Place Restrictions on Cable TV” was highly misleading in its description of a “largely unregulated cable television industry” that raises prices for consumers. Contrary to Mr. Ahren’s claim, cable television is highly regulated by local and state governments, which routinely grant geographic monopolies to influential cable companies.
Local government place heavy burdens on industry that can be more destructive than federal regulations. Despite the methodological problems of comparing the price for services across decades, where the basic cable service today is much better than the best service 20 years ago, there is no basis to conclude that market competition results in higher prices. Free and open competition results in savings to consumers and better services.
Even if Americans are paying more for cable (is the FCC’s measurement in real or nominal terms?), would anyone say that the cable service today is worse than it was 10, 20, or 30 years ago?
Also, many people are upset that cable television does not offer enough channel choices. However, they also demand a la carte cable services. Bundled cable is the only reason why we have such a wide diversity of channels. The channels that are in high demand, such as ESPN and Fox effectively “subsidize” those that aren’t in such high demand, like Spike TV (which I love, by the way). Because of this “subsidy,” we have great channel-surfing choices we wouldn’t otherwise have. Tonight, I can probably find at least three channels with a version of “Law and Order” playing and at least two with a version of “CSI.” What great diversity in the face of so much regulation! Imagine what wouldn’t exist without it.
Carter-Era Rationing, Now for Water!
It’s always humorous to read stories of outrage during periods of rationing. The same people outraged by the water shortage in the Southeast don’t realize that shortages are a government made phenomenon. Instead of getting mad at football field owners and water park proprietors, perhaps they should protest city hall?
From the “timber shortage” in America at the turn of the twentieth century to the oil shortage during the 1970s, every single shortage was caused by government mismanagement or price controls. The situation in the Southeast is no different. Will people ever learn? Governments cause shortages, not capitalists.
Anti-Market Bias or Bad Economics?
Reuters released a story today about Professor Eric Maskin, one of three American economists to receive the Nobel prize for economics. In it Maskin is quoted as saying that he “to some extent” takes issue with free-market orthodoxy.
This is not news. Maskin is just repeating a chapter that everyone reads in any microeconomics text book about public goods. Sure, the market MAY not be able to efficiently provide a military, courts, or other public goods because of the free rider problem. Although there is evidence to the contrary about certain public goods, such as Coase’s famous lighthouse example, Medieval Icelandic law, and private enforcement of criminal bails, but public goods theory and the free rider problem are still convincing and pervasive throughout the economics profession.
Market imperfections are not news to anyone who has studied economics, but this winner’s statement is flawed in some ways. As Tyler Cowen, professor and blogger at marginalrevolution pointed out, his style of economics is fading. This Nobel winner looked at the market as static rather than dynamic. It’s easy to look at a time slice of any dynamic process and come to the conclusion that it is failing. What takes real economic genius and insight is to look at an unfinished and dynamic market process and understand why it is working. That’s one insight that this Nobel winner seems to lack.
But maybe this story reveals more about Reuters’ anti-market bias. As Bryan Caplan points out in his book The Myth of the Rational Voter, many people think that economists are free market fundamentalists. The truth is that the average economist is a moderate Democrat who believes that free trade and outsourcing are good for the economy. Economists are not free market fundamentalists. In fact, every theory of market failure developed has come from economists.
I don’t want to sound too critical of Maskin. His and his colleague’s work on mechanism design has greatly aided in making auctions more efficient, minimizing agency costs, and aligning incentives with wealth maximizing ends. His work has impacted business and government handling of certain affairs is surely deserving of recognition.
In case Maskin or the other Nobel laureates have been too consumed with their work to pick up a new micro book in the last twenty years, many texts now have sections devoted to government failure. Since government is often posited as a solution to supposed market failures, it’s good to know how often and how completely governments fail in handling their basic tasks.
Market failure is a real phenomenon. But market failure works better than government failure.
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