North of the Border

Paul Krugman is conflicted on immigration. In fact, I would say that he is confused--and probably wrong:

North of the Border - New York Times: by PAUL KRUGMAN: I'm instinctively, emotionally pro-immigration. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration, and immigration from Mexico in particular. If people like me are going to respond effectively to anti-immigrant demagogues, we have to acknowledge those facts.

First, the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1 percent.

Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration -- especially immigration from Mexico.... George Borjas and Lawrence Katz... estimate that U.S. high school dropouts would earn as much as 8 percent more if it weren't for Mexican immigration. That's why it's intellectually dishonest to say, as President Bush does, that immigrants do "jobs that Americans will not do." The willingness of Americans to do a job depends on how much that job pays -- and the reason some jobs pay too little to attract native-born Americans is competition from poorly paid immigrants....

Mexican immigration, says the Borjas-Katz study, has played only a "modest role" in growing U.S. inequality. And the political threat that low-skill immigration poses to the welfare state is more serious than the fiscal threat: the disastrous Medicare drug bill alone does far more to undermine the finances of our social insurance system than the whole burden of dealing with illegal immigrants. But modest problems are still real problems, and immigration is becoming a major political issue. What are we going to do about it?

Realistically, we'll need to reduce the inflow of low-skill immigrants. Mainly that means better controls on illegal immigration.... We need to do something about immigration, and soon. But I'd rather see Congress fail to agree on anything this year than have it rush into ill-considered legislation that betrays our moral and democratic principles.

I think that we should focus on: "the net benefits... from immigration, aside from the large gains to the immigrants themselves, are small." Particularly, we should focus on the "large gains to the immigrants themselves." The net benefits from immigration including the large gains to the immigrants themselves are enormous. We shouldn't forget that.

We should be taking steps to equalize America's income distribution: more progressive tax brackets, more public provision of services, a more generous Earned Income Tax Credit, a higher minimum wage, a greater focus on education. But tight restrictions on immigration are a really lousy anti-poverty policy: one with enormous excess burdens measured in money, and truly mammoth excess burdens measured in utility.

Comments

[NeilS]

But this point by Krugman is both obvious and important: "... the reason some jobs pay too little to attract native-born Americans is competition from poorly paid immigrants...." My adopted son is bipolar and has several other cognitive difficulties. He will never get a college degree so he will have to compete with unskilled labor. Living in Colorado we have a pretty steady flow of this labor from Mexico and Central America. Is he doomed to live in poverty? The advantages to many Americans in having cheap labor to tend their lawns and serve their food is pitted against the needs of other citizens who only have the sweat of their brow to offer.

[T.R. Elliott]

I've been saying the same thing on other blogs addressing this issue. I believe governments have the right and should regulate the borders to ensure market imbalances don't arise. Imbalances can take many forms. I support legal immigration. I do not believe someone who happens to live south of the US border should have the right of immigration over someone who, because of cost and accessibilty, must follow due process.

Economic gains to immigrants are large. Granted. But isn't labor itself subject to the law of supply and demand?

An immigration policy based upon humanitarian and economic priciples, taking into account unemployment, should be possible.

I don't think the issue should be immigration. It should be illegal immigration.

[Jason]

I have to agree with Krugman on this one. The amount of cheap and essentially disposable labor latino immigrants provide drive down the wages (gains) of unskilled domestic workers. The gains to the immigrants are huge, so self interest strongly compels them to venture North (legally or illegally). None of this will help lower skill workers here; given the political climate, most of the measures you suggest as remedies are DOA as "redistributist" or "socialist".

[Jonathan Lundell]

Stiglitz's FEER piece (Mark Thoma has an extended excerpt via http://pragmatos.net/?p=76 (his URL is too long)) strikes me as directly relevant here. He writes:

"That Mexico has done so poorly under NAFTA has not helped the case for liberalization. If there ever was a free trade agreement that should have promoted growth, that was it, for it opened up for Mexico the largest market of the world. But growth in the decade since has been slower than in the decades before 1980, and the poorest in the country, the corn farmers, have been particularly hurt by subsidized American corn."

If NAFTA in particular and trade liberalization in general were delivering what they promised, the incentive for Mexicans to cross the border illegally (often at great cost and risk) would be considerably reduced. But how many Republicans or Democrats are working to reduce ag subsidies instead of engaging in anti-immigrant demagoguery?

[Winslow R.]

Brad wrote:

"We should be taking steps to equalize America's income distribution: more progressive tax brackets, more public provision of services, a more generous Earned Income Tax Credit, a higher minimum wage...."

How about a job for everyone willing to work, or would that just be too inflationary? We really would like you to address everyone in Neil S.'s son situation.

Hey, cheers to Krugman for poking a stick into the hornet's nest. I'm liking his new 'attitude'.

[paulo]

Does the "net benefits" include the value to consumers of having so much low-cost labor to build houses cheaper, mow lawns and wash windows and handle child care? I can't imagine that this impact is that small.

[anne]

http://select.nytimes.com/search/restricted/article?res=F20812FC34580C708CDDAA0894DB404482

March 3, 2003

Why Mexico's Small Corn Farmers Go Hungry
By Tina Rosenberg

MEXICO CITY - Macario Hernández's grandfather grew corn in the hills of Puebla, Mexico. His father does the same. Mr. Hernández grows corn, too, but not for much longer. Around his village of Guadalupe Victoria, people farm the way they have for centuries, on tiny plots of land watered only by rain, their plows pulled by burros. Mr. Hernández, a thoughtful man of 30, is battling to bring his family and neighbors out of the Middle Ages. But these days modernity is less his goal than his enemy.

This is because he, like other small farmers in Mexico, competes with American products raised on megafarms that use satellite imagery to mete out fertilizer. These products are so heavily subsidized by the government that many are exported for less than it costs to grow them. According to the Institute for Agriculture and Trade Policy in Minneapolis, American corn sells in Mexico for 25 percent less than its cost. The prices Mr. Hernández and others receive are so low that they lose money with each acre they plant.

In January, campesinos from all over the country marched into Mexico City's central plaza to protest. Thousands of men in jeans and straw hats jammed the Zócalo, alongside horses and tractors. Farmers have staged smaller protests around Mexico for months. The protests have won campesino organizations a series of talks with the government. But they are unlikely to get what they want: a renegotiation of the North American Free Trade Agreement, or Nafta, protective temporary tariffs and a new policy that seeks to help small farmers instead of trying to force them off the land.

The problems of rural Mexicans are echoed around the world as countries lower their import barriers, required by free trade treaties and the rules of the World Trade Organization. When markets are open, agricultural products flood in from wealthy nations, which subsidize agriculture and allow agribusiness to export crops cheaply. European farmers get 35 percent of their income in government subsidies, American farmers 20 percent. American subsidies are at record levels, and last year, Washington passed a farm bill that included a $40 billion increase in subsidies to large grain and cotton farmers.

It seems paradoxical to argue that cheap food hurts poor people. But three-quarters of the world's poor are rural. When subsidized imports undercut their products, they starve. Agricultural subsidies, which rob developing countries of the ability to export crops, have become the most important dispute at the W.T.O. Wealthy countries do far more harm to poor nations with these subsidies than they do good with foreign aid.

While such subsidies have been deadly for the 18 million Mexicans who live on small farms -- nearly a fifth of the country -- Mexico's near-complete neglect of the countryside is at fault, too. Mexican officials say openly that they long ago concluded that small agriculture was inefficient, and that the solution for farmers was to find other work. ''The government's solution for the problems of the countryside is to get campesinos to stop being campesinos,'' says Victor Suárez, a leader of a coalition of small farmers.

But the government's determination not to invest in losers is a self-fulfilling prophecy....

[tedm]

I agree with the professor that the gains to the immigrants themselves must be included if cost/benefit analysis is employed.

However, my own point of view does not rest on efficiency grounds and so the resulting calculation would not sway my opinion one way or the other.

There are some opinions I hold even if they are inefficient. For example, perhaps someone will show that unregulated dating behavior is inefficient because of (insert list of market failures such as information problems). I would still be against community restrictions on dating, even to correct inefficiencies, because my conception of human dignity requires that I respect each person's choice of mate. I don't care if the winners can potentially compensate the losers.

For myself, that same approach applies to both trade and immigration. Just as I reject the notion that we as a community have the right to bar a person from dating a foreigner, I also reject the notion that we as a community have the right to bar a person from signing a contract with a foreigner. This includes a contract to exchange goods or an employment contract.

I recognize that my view is in the minority.

[anne]

There is need to better promote jobs and protect workers at all but elite levels in America, and part of the protection must involve understanding and better regulating immigration. This however involves being sensitive to the pressures driving immigrants and the needs involved. Criminalizing assisting illegal immigrants, which is the Congressional approach, is not a proper response.

[anne]

http://www.nytimes.com/2006/03/22/opinion/22mahony.html?ex=1300683600&en=9f99cb0fa4fe6762&ei=5090&partner=rssuserland&emc=rss

March 22, 2006

Called by God to Help
By ROGER MAHONY

Los Angeles

I'VE received a lot of criticism for stating last month that I would instruct the priests of my archdiocese to disobey a proposed law that would subject them, as well as other church and humanitarian workers, to criminal penalties. The proposed Border Protection, Antiterrorism and Illegal Immigration Control bill, which was approved by the House of Representatives in December and is expected to be taken up by the Senate next week, would among other things subject to five years in prison anyone who "assists" an undocumented immigrant "to remain in the United States."

Some supporters of the bill have even accused the church of encouraging illegal immigration and meddling in politics. But I stand by my statement. Part of the mission of the Roman Catholic Church is to help people in need. It is our Gospel mandate, in which Christ instructs us to clothe the naked, feed the poor and welcome the stranger. Indeed, the Catholic Church, through Catholic Charities agencies around the country, is one of the largest nonprofit providers of social services in the nation, serving both citizens and immigrants.

Providing humanitarian assistance to those in need should not be made a crime, as the House bill decrees. As written, the proposed law is so broad that it would criminalize even minor acts of mercy like offering a meal or administering first aid.

Current law does not require social service agencies to obtain evidence of legal status before rendering aid, nor should it. Denying aid to a fellow human being violates a law with a higher authority than Congress — the law of God.

That does not mean that the Catholic Church encourages or supports illegal immigration. Every day in our parishes, social service programs, hospitals and schools, we witness the baleful consequences of illegal immigration. Families are separated, workers are exploited and migrants are left by smugglers to die in the desert. Illegal immigration serves neither the migrant nor the common good.

What the church supports is an overhaul of the immigration system so that legal status and legal channels for migration replace illegal status and illegal immigration....

Roger Mahony is the cardinal archbishop of Los Angeles.

[Winslow R.]

But the government's determination not to invest in losers is a self-fulfilling prophecy....

I would add, the neo-liberal economists that aid in the 'determination' are very much to blame.

[turquoise]

Probably for the first time, Brad DeLong seems to disagree with Paul Krugman! It is interesting to see that both liberals and conservatives are divided on this issue. It does not happen often.

[Charles]

Externalities, Brad.

Example: Foreign scientist comes to US. Does not know anything about US lab practices, suppliers, etc. Requires huge investment of time, probably working months of time, by other students in the lab. That time investment is invisible to the head of the lab, but subtracts from either their work or their home life. However, to the economist, his labor is slightly cheaper than the American grad student, so he benefits the economy.

The guy is really good and is one of the 30% or so of foreign scientists who actually get a job in science (the time investment in the others is essentially wasted as far as the US economy is concerned). And, because we have streamlined the process, he no longer has to bribe an immigration judge to do it, as happened routinely for decades.

As an immigrant, he's in a tenuous situation. If he gets fired, he may lose his right to work in the country. He has no family support network and meager savings. So, when the boss comes to him and tells him to do something that is illegal or unethical, he doesn't have much choice.

But the immigrant is a really standup guy. He believes what we tell the world about America and he decides to refuse to engage in the illegal/unethical act. Pretty soon, he's on the plane back to his country of origin. Or selling shoes.

But the saga continues. His American colleague sees that Americans are being forced out in favor of completely expendable foreigners. So, the American also feels coerced to compromise on ethics.

Arriving home, the guy finds employment in his home country precisely because he has acquired valuable knowledge: detailed information about how US industry functions, down to FDA requirements for installation protocols for milling machines and USP tests for ingredients.

You (the generic reader of this post) find out about this when you open your paper and learn that the FDA is reviewing the status of Vioxx, or whatever. On page B2, you learn that Dr. Reddy's is growing at an absolutely phenomenal rate, while MRK is down 50% and financial analysts are wondering whether it will ever really recover. If it should go bust, the exit costs are not negligible. As we see with GM, taxpayers may be stuck with pension costs, unemployment, etc. Whole communities could be financially devastated.

You (the generic economist reading this post) never connect the wonderful benefit that immigrants are providing through their cheap labor with the externalities.

America is a nation of immigrants. It should control but not seal its borders. However, immigration *as it is practiced* is done largely for the purpose of driving down American wages and social standards. Add up *all* the externalities, including social dislocation, and the economic benefits of immigration *as it is practiced* are illusory.

The right answer is to help our neighbors develop. Labor and environmental standards for all trade agreements. An end to subsidized agricultural exports that wipe out small farmers. A commitment to provide basic vaccines and compassionate medicine to end illnesses that cripple the Third World. Full legal rights for all immigrants, just as our Constitution promises.

And especially, no more coups.

Not one more g********d coup, if you will pardon my asterisks.

[anne]

But we must invest in development, in worker protections and well-being, here and abroad, and part of the terrible price we have paid for the war in Iraq is a neglect of what should be developmental investment here and in Latin America.

[liberal]

tedm wrote, "For example, perhaps someone will show that unregulated dating behavior is inefficient because of (insert list of market failures such as information problems). I would still be against community restrictions on dating, even to correct inefficiencies, because my conception of human dignity requires that I respect each person's choice of mate. I don't care if the winners can potentially compensate the losers."

The community also bars me from using "your" land without your say-so. To be consistent, such a bar shouldn't be allowed, and I should be allowed to use it without your say-so.

[Winslow R.]

turquoise wrote:

"Probably for the first time, Brad DeLong seems to disagree with Paul Krugman! It is interesting to see that both liberals and conservatives are divided on this issue. It does not happen often. "

I would suggest Krugman has a plan and is implementing it just in time to affect the Fall election. This is the time things are likely to 'happen'. Brad has some 'catch up' to do. I am waiting for an article in Project Syndicate to expose his true concern for mankind.

[bakho]

Our nativist immigration policy is partly responsible for some of the outsourcing. If companies can't bring in talent to work in the US, they will outsource the whole project to Asia where the talent is located. My Canadian Uncle was thrown out of the US by Reagan and had to leave his house empty because he couldn't sell it and couldn't live in it.

The real problem is that the labor is paid too low a wage and the social costs are borne by the rest of us. This is not the fault of the laborers. It is the fault of the corporations that underpay them and expect the rest of us to cover the social costs. It is the fault of the politicians that can't manage to spread the health care risk premium across the entire US population and cannot manage to pass living wage laws.

[Karmakin]

To continue on what Charles said, it needs to be recognized that for 2nd world countries to develop the infrastructure, both physical and educationally to become 1st world countries, they will probably need to take steps that look an awful lot like socialism.

These in fact, should be encouraged, as long as basic human rights are looked after.

And I suspect with the US keeping their mitts out of things, Democratic Socialist countries will be able to..not be so paranoid of having everything stolen from them at a minutes notice. (See Cuba for a great example of that)

[wml]

I think/hope on a normative level Krugman agrees with you Brad, but that he thinks on a practical/political level some restrictions on immigration is going to have to be accepted. Part of the reason is that there's a split on the Left. Some people care about unfairly disadvantaged Americans because they are one/have family. Some other people care about the disadvantaged because of abstract philosophical principles (such as utilitarianism.) On most issues the two groups agree, but on immigration the former will tend to be pro-restriction and the latter will tend to be for as much openness as possible.

So I'm guessing Krugman is calling for the common ground platform for the Left: everyone on the Left can agree, regardless of their core value systems, that whatever policy Bush comes up with will be bad, so we should reject it for the time being until we have control of government :) Then we can work out for ourselves some compromise or bargain.

[theorajones]

Exactly right.

The issue really isn't that there are too many people fighting over the smallest slices of the pie. The problem is that a very tine elite is taking most of the pie. And they take a bigger proportion of it every year.

Screwing over immigrants won't change that fundamental and very big problem. On the whole, immigrants make as much pie as they take, and from a moral standpoint they're a hell of a lot more entitled to their piece of pie than the elites are. It's profoundly un-American to declare open season on people who are working hard and contributing their fair share. It's especially perverse to do that while handing out massive tax breaks to the rich.

Neil, your son can't compete his way to a decent life. Stacking the deck in his favor by keeping out immigrants won't really help him, and it'll come at a huge cost. It makes a HELL of a lot more sense to advocate for a more robust safety net that he should be entitled to as a human being, and the financing for that net should come from those who already control far more than their fair share.

Immigrants, both legal and illegal aren't responsible for the increasing wealth inequality in the US. Let's not make them scapegoats in order to protect the people who really are responsible.

[anne]

http://www.nytimes.com/2006/03/27/opinion/27mon2.html?ex=1301115600&en=5f51c92899cfbb78&ei=5090&partner=rssuserland&emc=rss

March 27, 2006

A Civil Debate

Something powerful pulled more than half a million people onto the streets of Los Angeles on Saturday, turning 26 downtown blocks into a pulsing sea of white T-shirts and American flags. A veteran police commander said that in 38 years he had never seen a march so huge. Its target was a harsh immigration bill passed by the House that would erect a wall on our Southern border and turn 12 million illegal immigrants — and any who give them aid — into a nation of felons.

The demonstrations have been timed to a climactic showdown for immigration reform in the capital. Today the Senate Judiciary Committee has scheduled debate and a vote on a bill offered by its chairman, Arlen Specter. Unlike the House bill, it seeks comprehensive overhaul of immigration laws — not just tighter borders and stricter enforcement, but also a sensible path to legal status for illegal workers already here and others who want to come.

Mr. Specter and his colleagues are working under intense pressure, since the Senate majority leader, Bill Frist, has threatened to put forward a hard-line enforcement bill if the committee fails to complete its work today. Senate staffs were racing over the weekend to nail down compromises before today's deadline. Anti-immigrant forces, meanwhile, stand ready to try to torpedo anything other than a strictly get-tough approach.

That would be an awful outcome for immigrant advocates and for President Bush, who has long argued for comprehensive reform and tried, with limited success, to steer his party away from the one-note harshness of the wall-building crowd....

[turquoise]

Krugman would probably oppose subsidies to promote trade, but he does not mind if subsidies are given to poor Americans (and not to the Mexicans who swim the Rio Grande river) to maintain an exclusive social safety net here at home.

If Brad DeLong is right, why is he partial to the Mexican immigrants? Can the Africans come too?

[Peter Rousmaniere]

This posting argues for an incremental approach to solving the core problem: lousy jobs.

The illegal immigration issue is a big issue only because there are several tens of millions of jobs in the U.S.which do not, and most likely will not, require much of any education. Illegal workers, which I estimate at 7.5 million today, include one half of all workers with less then 8th grade education. If we did not have these jobs waiting to be filled, we would not have such a huge illegal immigration workforce.

Will these jobs evaporate? It appears that absent productivity improvements these jobs will be just as numerous in 2016 as today.

Is it in the interest of the country to delete as many of these jobs as feasible by productivity improvements? Yes! How do with do that? Probably one strategy for each major industry -- starting with meat processing. The meat processing industry has transformed itself in the past 15 years as a low trained immigrant hiring machine.

Another: redesign the entire process of residential roof construction and repair.

One by one by one........

[anne]

Immigration to America is international:

http://www.nytimes.com/2005/02/21/nyregion/21africa.html?ex=1266728400&en=6a8081504c2631f4&ei=5090&partner=rssuserland

February 21, 2005

More Africans Enter U.S. Than in Days of Slavery
By SAM ROBERTS

For the first time, more blacks are coming to the United States from Africa than during the slave trade.

Since 1990, according to immigration figures, more have arrived voluntarily than the total who disembarked in chains before the United States outlawed international slave trafficking in 1807. More have been coming here annually - about 50,000 legal immigrants - than in any of the peak years of the middle passage across the Atlantic, and more have migrated here from Africa since 1990 than in nearly the entire preceding two centuries.

New York State draws the most; Nigeria and Ghana are among the top 20 sources of immigrants to New York City. But many have moved to metropolitan Washington, Atlanta, Chicago, Los Angeles, Boston and Houston. Pockets of refugees, especially Somalis, have found havens in Minnesota, Maine and Oregon.

The movement is still a trickle compared with the number of newcomers from Latin America and Asia, but it is already redefining what it means to be African-American....

[Winslow R.]

"Something powerful pulled more than half a million people onto the streets of Los Angeles on Saturday, turning 26 downtown blocks into a pulsing sea of white T-shirts and American flags"

Someone flipped the swith, was it the Catholic Church...? Will they be the next target for destruction now union power is gone?

[tedm]

Liberal wrote

"The community also bars me from using "your" land without your say-so. To be consistent, such a bar shouldn't be allowed, and I should be allowed to use it without your say-so."

I happen to think property rights are essential to human dignity and precede formal government. I'm willing to bet that you consider the toothbrush that you use in the morning to be "yours" and would object strenuously if your neighbor used it to clean the tires of his car.

There is nothing inconsistent between respecting my neighbor's choice of companions and respecting my neighbor's property.

[Anonymous]

I don't understand why everyone here keeps confusing the notion of immigration with the idea of illegal immigration. I don't know any working-class Americans who have a problem with legal immigration. But I can introduce you to dozens of (formerly) skilled tradesmen who now make far less money doing something other than their trade. This is because of ILLEGAL immigration.

The elites of both parties need to realize the social tsunami heading there way in regards to working-class resentment of ILLEGAL immigrants. And suggesting that we simply modify a few laws to make those who are here illegally suddenly legal is not going to mollify the growing anger coming from those who, through no fault of their own, are losing their livelihoods to illegal labor.

And Brad's ideas simply aren't going to cut it. Raising the minimum wage is only going to drive more employers to use illegal labor. Another addition to the earned income tax credit is frankly insulting. Working Americans want fair pay for a fair job... not a government hand out. The same goes for education. Why shouldn't we be able to support a class of skilled tradesmen in America? Must we all have a college degree to work in the exploding service industries? Again... this is almost insulting to working-class Americans who have skills that few of us college-educated types could imagine. We (the college-educated) simply refuse to pay these skilled laborers for their skills. Preferring instead to look the other way while imported, illegal labor puts extra dollars in our wallets. Why should a trained, skilled mason who once made $50K/year now be required to compete with illegal labor willing to do the same job for 1/3 the price?

We've got a serious problem here America. The working class is being crushed.

[anne]

No doubt Cardinal Mahony's call was emboldening:

http://www.nytimes.com/2006/03/27/opinion/l27immig.html

Illegal Immigrants, Duty and Law

To the Editor:

I am a university professor who volunteers at a Catholic charity in Houston that distributes food and clothing to Hispanic immigrants, most of them illegal.

Each week, I help distribute about four tons of food to 250 indigent families in southwest Houston, mostly people from Mexico and Central America.

Some weeks, I also help distribute clothing.

Why do I do this? As Cardinal Roger Mahony pointed out, it is a central tenet of the Catholic faith to feed the hungry, clothe the naked and welcome the stranger.

If the illegal immigration control bill becomes law, my volunteer work will become a felony, but I will continue to do it.

Richard Fossey
Houston, March 22, 2006

[anne]

Yes; there is a profound distinction between legal and illegal immigration, but both relate to the opportunities for and well being of workers when we do not have anyway near the focus on worker needs that became a New Deal legacy.

[JRossi]

Sure, immigration provides benefits to the immigrants, but at the expense of Americans and not only low-income Americans. And where does it end? At European population densities? Asian population densities? I don't know about you, but I don't feel lonely in this country.

[ogmb]

As a shorthand for political ideologies lefties have the tendency to overestimate the effect of externalities while righties underestimate them. What Krugman does here is to remind those on his own side that the other side's argument has some validity. Nothing confused or wrong about it.

[ken melvin]

Good comments all. By the measure of their inability to provide for their people, economies all over the world are failing. Mexico's has long since been a failure as evidenced by the millions living in abject poverty there and the more than 10 million illegally in the US. Albeit better concealed, the US economy has long since failed to provide for our people; most notably since the 80s. An example of how it has come to be in America: In the 80s the meat packing unions were busted and their workers replaced with illegals. Per BLS, the number of people working stayed the same, perhaps rose, but US workers were displaced from jobs that payed a living wage, jobs that allowed them to educate their children. In the US, just as in Mexico City, homelessness and poverty grew. Millions of US citizens have effectively disappeared. If the US employment to population ratio is ~65% and 11 million of these employed are illegals then the employment to population ratio of US citizens is ~62% and the real unemployment rate of US citizens is ~12%. For the ~11 million illegals holding jobs 11 million US poor are unemployed and those who do have a job are working for about half what they should be paid. Illegal immigration has the same effect as offshoring. And, what evidence that Mexico is the better off for this illegal immigration?

[Matt]

Of course. Your comment implies that there should be no restrictions whatsoever on immigration, or at least until the gains in utility to those who come match the loss in utility for the population already here. But no nation is a charitable enterprise, and every nation has the right to control its borders. Deciding that we want to have an eventual population of 375 rather than, say, 550 million is perfectly legitimate. Worries about the effect of continued high immigration on the incumbent population is perfectly legitimate. Wanting to make sure that the immigration that does occur occurs legally is perfectly legitimate. If illegal immigration is not brought under control, the eventual political outcome will be the victory of the new Know Nothings.

[a different chris]

Anne, be careful with that article -- it twists and bites like a snake. Note this little slight-of-hand:

>American corn sells in Mexico for 25 percent less than its cost.
>The prices Mr. Hernández and others receive are so low that they lose money with each acre they plant

Note how they never mentioned what Mr. Hernandez's "cost" was? Because it would blow the hell out of their "anti-subsidy" tirade. If Americans sold their corn for cost+ they would still undersell Mr. Hernandez by a good margin. Therefore, if we remove the subsides Mr. Hernandez doesn't benefit, but Mexican corn customers, at least in neo-lib theory, suffer. I personally think that small, local farms are
a great benefit to a country that isn't properly measured by any econometric yet devised, but I'm just a wackjob.

A glimmer of the truth *was* in the opening:

>people farm the way they have for centuries, on tiny plots of land watered only by rain,
>their plows pulled by burros.
.....
>raised on megafarms that use satellite imagery to mete out fertilizer.

Read that and wonder how the hell SUBSIDIES could possibly be the sum problem. Burros vs. satellites, that's the problem. BTW, we can guide tractors thru GPS, too. Try that with a donkey.

Note the farmers are a bit smarter than our economics professors:

>But they are unlikely to get what they >want: a renegotiation of the North American >Free Trade Agreement,
>or Nafta, protective temporary tariffs and >a new policy that seeks to help small >farmers
>instead of trying to force them off the >land.

Note they DIDN'T ask for the ending of subsidies (again, they can't compete even without them), they asked for tariffs.

They know how this game is gonna work - the borders first are opened. Then the highly efficient First World ag industry crushes them, subsidies or no subsidies. Once off the farm, said Ag Giants buy the land and now farm it themselves free from First World labor or environmental polices.

And nobody on this freaking weblog can see it. Amazing, you are all smart people. Go ahead, drop ag subsidies - I'm the first to admit that they are totally, totally messed up in current execution. But don't buy the BS on how they're killing farmers like Mr. Hernandez. What's killing them is what will kill rickshaw makers in China in a few years ... 19th century products and production methods losing to 21st century replacements.

One more time, if you don't believe me: Why didn't they give you a number for Mr. Jernandez's cost to compare to the American's cost? Go try and find out. Learn that it's a pattern with these articles -- slippery, slippery slippery.

We have ag subsidies for two reasons:

1) Vote buying.
2) To fight off other First World farmers (ask what Austrialian farmers think of our subsidies).

If you believe in Ricardo then the Mexican government is right: let the campesinas die, and take the ag subsidies as a welcome gift. I don't happen to think that's a good idea, but at least I'm consistent. Can you guys really make that argument?

[Phoenix Woman]

If the Wal-Mart shoppers who whine about brown-skinned folks "taking their jobs" really are interested in saving these jobs for "Americans" (and not just being racist pigs), I have three words for them:

SEIU, SEIU, SEIU!

http://www.seiu.org

Organize service-industry workers, and suddenly jobs that no one can survive on in America (unless they're living fifteen to a room in an apartment, or are close enough to the border that they can slip back to Mexico and its lower cost (and standard) of living) become sufficiently desirable to US citizens that they take the jobs.

Amazing how that works!

But of course, that would require breaking people of the Wal-Mart habit, as Wal-Mart in the last four decades has taken away more decent-paying US jobs than all the illegal immigrants in US history.

[liberal]

a different chris wrote, "A glimmer of the truth *was* in the opening:

">people farm the way they have for centuries, on tiny plots of land watered only by rain,
">their plows pulled by burros.
".....
">raised on megafarms that use satellite imagery to mete out fertilizer.

"Read that and wonder how the hell SUBSIDIES could possibly be the sum problem. Burros vs. satellites, that's the problem. BTW, we can guide tractors thru GPS, too. Try that with a donkey."

The real problem isn't even technology, but something more basic: economies of scale.

My admittedly vague impression reading around on the internet is that a long time ago Mexico "solved" some of its wealth inequality problems by dividing up land into small plots. But this is pretty inefficient (econ. of scale issues). Much more efficient is to tax land extremely heavily rather than divide it up.

[Charles]

A different Chris, I think you're missing the externalities.

When the farmer whose food is "too expensive," is displaced from his ancestral lands, where does he go? What does he do?

Thanks to mass unemployment and low wages, Mexico is rife with drug smuggling and crime. Living standards have fallen over the last decades.

But it can get worse. In Iraq, idle young men turn to terrorism. In the worst case, you end up with a failed state.

Subsidies to agriculture are much larger than you may imagine. There are not just direct subsidies, but tons of indirect subsidies. The whole biotech industry exists because of subsidies. Water projects that serve primarily corporate customers. Unenforced environmental laws that pay for cheap food with damage to the health of Americans.

And yet, despite the huge subsidies the US provides, it is turning into a food *importer.*

Getting a proper accounting of the costs involved in the way we do business is much, much more difficult than many people seem to think.

Look at the crises we are facing: global warming, ozone depletion, collapse of species diversity, etc. These are all the bill from past "economically efficient" decisions.

We may not be able to pay *that* one.

[anne]

Phoenix Woman has quickly pointed to the importance of unions as a prime worker protection and ultimately social integrator :)

[anne]

Chris, Liberal, Charles, your comments are telling :)

http://www.nytimes.com/2004/12/28/international/americas/28guatemala.html?ex=1261976400&en=fd8a7c7a170acbf5&ei=5090&partner=rssuserland

December 28, 2004

Supermarket Giants Crush Central American Farmers
By CELIA W. DUGGER

PALENCIA, Guatemala - Mario Chinchilla, his face shaded by a battered straw hat, worriedly surveyed his field of sickly tomatoes. His hands and jeans were caked with dirt, but no amount of labor would ever turn his puny crop into the plump, unblemished produce the country's main supermarket chain displays in its big stores.

For a time, the farmer's cooperative he heads managed to sell vegetables to the chain, part owned by the giant Dutch multinational, Ahold, which counts Stop & Shop among its assets. But the co-op's members lacked the expertise, as well as the money to invest in the modern greenhouses, drip irrigation and pest control that would have helped them meet supermarket specifications.

Squatting next to his field, Mr. Chinchilla's rugged face was a portrait of defeat. "They wanted consistent supply without ups and downs," he said, scratching the soil with a stick. "We didn't have the capacity to do it."

Across Latin America, supermarket chains partly or wholly owned by global corporate goliaths like Ahold, Wal-Mart and Carrefour have revolutionized food distribution in the short span of a decade and have now begun to transform food growing, too.

The megastores are popular with customers for their lower prices, choice and convenience. But their sudden appearance has brought unanticipated and daunting challenges to millions of struggling, small farmers.

The stark danger is that increasing numbers of them will go bust and join streams of desperate migrants to America and the urban slums of their own countries. Their declining fortunes, economists and agronomists fear, could worsen inequality in a region where the gap between rich and poor already yawns cavernously and the concentration of land in the hands of an elite has historically fueled cycles of rebellion and violent repression.

"It's like being on a train with a glass on a table and it's about to fall off and break," said Prof. Thomas Reardon, an agricultural economist at Michigan State University. "Everyone sees the glass on the table - but do they see it shaking? Do they see the edge? The edge is the structural changes in the market."

In the 1990's supermarkets went from controlling 10 to 20 percent of the market in the region to dominating it, a transition that took 50 years in the United States, according to researchers at Michigan State and the Latin American Center for Rural Development in Santiago, Chile.

Brazil, Argentina, Chile, Costa Rica and Mexico are furthest along. While the changes have happened more slowly in poorer, more rural Central American countries, they have begun to quicken here, too. In Guatemala, the number of supermarkets has more than doubled in the past decade, as the share of food they retail has reached 35 percent.

The hope that small farmers would benefit by banding together in business-minded associations has not been borne out. Some like Aj Ticonel, in the city of Chimaltenango, have succeeded. But the evidence suggests that the failure of Mr. Chinchilla's co-op is the more common fate.

Its feeble attempts to sell to major supermarkets illustrate how the odds are stacked against small farmers, as well as the uneven effects of globalization itself....

[jerry]

Free trade vs. fair trade.

I am for legal immigration. I am for raising the quality of living across the world. This means fair trade with countries not free trade. Free trade with Mexico et. al., gives the individual the incentive to illegally immigrate here. Free trade is a race to the bottom. Fair trade raises wages and the quality of living every where.

Free Trade places wage gains, workplace safety, vacation, pensions, medical benefits, retirement, environmental safety all on the chopping block.

Fair Trade protects.

Krugman understands this. Sadly Brad DeLong and Tom Friedman do not.

[Tyrone Slothrop]

I don't see where Krugman is "wrong" here -- I see dueling analytical frameworks, with a sort of endowment effect involved.

http://allintensivepurposes.blogspot.com/2006/03/endowment-effect-immigration-style.html

[SamChevre]

The community also bars me from using "your" land without your say-so.

Actually, liberal, you are entirely mistaken. I, not the community, bar you from using my land without my permission; that's what dogs and guns are for. The community bars me from using YOUR land without YOUR permission, even if I have a shotgun and you don't.

[anne]

http://www.calvorn.com/gallery/photo.php?photo=6292&u=99|7|...

Downy Woodpecker and House Sparrow Having a Dispute
New York City--Central Park, The Ramble.

Thoughtful comments, and I too am with Paul Krugman :)

[Esq.]

Professor,

You are the economic history professor. I was taught that much of the reason we have a middle class is a long history (1640ish-197?) of the most expensive labor force in the world, largely as a consequence of labor shortages. Now we have German and Japanese firms building factories here as low wage alternatives. That 8% increase in wages for unskilled labor would have a huge multiplier effect on the rest of the economy as that money was spent or invested. Think of the Henry Ford effect.

Every time I see a carwash with a group of guys hand drying the cars, I can't but help think that iit is a tragic waste and how this country is in desperate need of a unskilled labor shortage. No normal person should be able to afford that service, and business should be forced to invest (by economics, not law) in capital machinery to accomplish the task.

Instead, we have entire industries where illegal immigration has replaced the working class and an underclass that has no hope of employment because employers prefer immigrant day laborers for cultural and economic reasons.

Why on earth should American politicians "focus on the 'large gains to the immigrants themselves'"?

[NinjaPlease]

Why all the fuss about border fences & policing immigrants.

The solution is simple:

Take away the incentive to hire illegal aliens:

mutliply the fines for hiring an illegal by a factor of x10 and directly local / county / state law enforcement to actively police people who hire them.

You'll see a night and day difference immediately--no fences involved.

Local service jobs can't be globally sourced, so, companies skirt the laws here to get large profits. Illegal immigration doesn't seem like a big issue to most people now, but remember, in the globalized economy, the jobs they are performing are the only jobs which will be left, since they are immobile. If they could be globally sourced, they would have been by now.

The new mantra from the far right is as follows:

1) It's so awful that michigan and ohio have so many people that are unemployed

2) People need to take responsibility for themselves and their own wellbeing and need to stop relying on the government to help them.

3) Apparently there is an "entitlement mentality" among workers today.

4) Stop complaining about the economy because we're better off than many people in the world, we have running water, electricity, heat, a home (which we had in the 1920s, I guess we haven't gained in 90 years and that's ok,) also it means apparently we're spoiled and don't appreciate shit.

I'm saying it now: Spring time is coming, plan for an early planting in May. Plant enough food for your family, the shit is going to hit the fan when housing prices begin to tumble. Housing sales dropped 10% Most of the new jobs created were releated to home construction / remodelling. The Fed is going to raise interest rates again to act as a brake on the "booming" economy of profits being fed back to shareholders as dividends that are only taxed at 15%.

Yes, as a Ninja, let me be the first to tell you, the sky is falling, the sky is falling!

[J.Goodwin]

tedm:

What if your neighbor's choice of companion is your wife, or your 13 year old daughter, or if he was a priest, and he was interested in your adolescent son?

There are limits on everything, legal limits, and social limits. Even dating.

[Andrew]

Gentlefolk,

Let us back up a bit and look at resource issues. How large a population can America support? (Currently, due to immigration, America has the highest population growth rate of any developed nation.) Some resources, such as water, do not have replacements. Can America afford to keep growing its population at its current rate and still have enough water to drink and irrigate its farms? If we do not slow our population growth, is this an America you want to live in?

Looking at our energy issues, we import 60% of our oil and 20% of our natural gas. Since domestic production in both commodities is declining, population pressures will drive the increase of those imports. Is it in our national security interests to pursue immigration policies that increase our dependence upon foreign fossil fuels?

I deplore the anti-immigration bill because it addresses the wrong problem, illegal immigration, and does not attack the root cause, lawbreaking employers of illegal aliens. Immigrants will stop coming the moment opportunity does not compensate them for the risk. We need to ask ourselves, does America need to increase its population of unskilled laborers? If so, why? If not, why are we not enforcing our exisitng employment laws?

In an outsourcing, globalizing world these population issues will, in many ways, determine how America faces the coming resource and competitive challenges.

Andrew

[BC]

The system needs to be completely overhauled. The illegals that are here now need to be turned into legal immigrants.

Employers that only hire illegal aliens should be put out of business.

All the temporary working visas and the green card program should be scrapped for a point based system.

People working here temporarily should be able to earn points so that they can switch jobs, and get credits towards staying here permanently.

People with family here should get points. People that have been working here for a long time should get points.

Employers who hire non-permanent workers should have to pay taxes in inverse relation to the number of points the worker has. So employers bringing in fresh immigrant workers will pay a premium over hiring permanent residents.

The government can control the rate of immigration easily by setting up the rules for granting points, and also by setting the rate at which employers have to pay into the pool.

[John Emerson]

"That Mexico has done so poorly under NAFTA has not helped the case for liberalization."

Understatement of the year?

Shouldn't we have expected wages to race to the bottom once the labor pool was global? Shouldn't we have expected this trend to have continued until global unemployment was less than 10%? And shouldn't we have realized that there's labor cheaper than Mexican labor, and that Mexico has its own Mexicos to fear? And isn't this all relatively elementary logical thinking, not requiring a lot of advanced math or advanced training in economics?

If I'm wrong, someone please tell me where and how.

[MDtoMN]

I think Krugman's point does suggest one thing - we should NOT have a guest worker program. Either immigration is worth it for the benefits it provides to the immigrants - benefits which are greatly increased if they are working on gaining citizenship. Or immigration is not worth it because it depresses the wages of Native Born Americans, in which case we should reduce immigration and increase wages. A guest worker program seems to benefit neither group at all.

[Bruce Ferguoson]

Oh come on folks. What is the simplest solution to competing with third world cheap labor? Reduce the cost of labor here. What is the simplest way to solve the Social Security problem? Import more workers so that the Baby Boomers are not the majority. While I agree the questions about illegal versus legal immigration are important, the only reason for the illegal immigration is that the legal immigration can not meet the demands of the country.
You can grow an economy faster with more people than you can grow an economy with better widgets.
All of us with a house and two kids need to realize that had we just had more kids and spent less time going on vacation we might have solved this problem ourselves.
Remember this if you gave every household in the USA an acre of land you still wouldn't fill the state of Texas.

Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed, to me:
I lift my lamp beside the golden door.

[tedm]

response to

"What if your neighbor's choice of companion is your wife, or your 13 year old daughter, or if he was a priest, and he was interested in your adolescent son?"

If my neighbor's choice is my wife - and she agrees, she can divorce me over my objection.

If my neighbor's choice is my son or daughter, the fact they are MY son or daughter plays no role. If they are of age, they can date whomever over my objection.

If a person is underage, the concept is that they are too young to CONSENT. By definition, that is not a limit on contracts since contracts presume consent. Statutory rape is a denial of the capacity to consent.

I don't think anyone here is suggesting foreigners don't have the *capacity* to consent.

Are there limits? Of course. Two people decide to have sex in the front row of a baseball stadium during a game. But these limits don't matter to the choice of partner or to the act but to time, place, and manner.

Applying to immigration, maybe the community can put limits in the same way we regulate pedestrians crossing streets. We have lights that say when to cross the street. But, we don't single certain people out and say they can't walk on sidewalks when everyone else can. The US has done such things, eg. segregated water fountains, but I'm sure no one is suggesting that was consistent with human dignity.

Apply to immigration - in my view, foreigners have the same basic rights as I do simply as a matter of human dignity. Among those rights, in my view, is to date my neighbor, trade with my neighbor, contract with my neighbor.

Since I'm a cheery person, I think my liberal attitudes also lead to economic efficiency. But, rights above efficiency.

[masaccio]

Just take a look at our host's solutions to this problem. I just cannot think that any of those things is going to happen, and I have to wonder if any of them would work in some other universe where people were trying to get things right.

[Eli Rabett]

All you need to think about is whose ox is being gored.

[r m flanagan]

Reading Skidelsky's bio of Keynes I've been fascinated watching JMK move from vigorous advocacy of the "classical" position on free trade to its exact opposite. Just suppose we did the same and "retreated behind a high tariff wall" while keeping NAFTA in place . What would happen to employment in those mexican factories which have seen their natural market outsourcing China instead ? Just asking.

[save_the_rustbelt]

Illegals are rapidly taking over the semi-skilled construction trades, and anywhere (the south)where unions are not strong the illegals will eventually take over the more skilled trades.

These are not "jobs American's don't want."

Illegals don't call OSHA, don't report injuries to workers comp, don't call wage-and-hour, etc. Much cheaper all the way around.

You should hope your children grow up to be tenured professors.

[Ninjaplease]

"Oh come on folks. What is the simplest solution to competing with third world cheap labor? Reduce the cost of labor here. What is the simplest way to solve the Social Security problem? Import more workers so that the Baby Boomers are not the majority."

Are you kidding me?

#1 The simplest solution is to not compete since it's a totally unfair and unbalanced race. Employ tariffs that will drop over time as the standard of living in the third world country increases.

The simplest solution would be for the business who BREAK THE LAW to be fined for BREAKING THE LAW.

#2 I'm sorry, did you say import more workers? do you believe that the companies that hire illegal aliens pay into social security? Do you believe that they pay taxes?

No one has a problem with LEGAL migration or green card seekers.

#3 Africa has a whole lotta people and few widget designers (except for South Africa which is fairly industrialized.) The economies there won't increase until the governments there are completely subdued and all-aboard on the American Dollar system.

#4 "All of us with a house and two kids need to realize that had we just had more kids and spent less time going on vacation we might have solved this problem ourselves."

You mean kids who will be a burden on tax payers for the first 12 years of their life(after age 6), and since parents will unlikely be able to pay for multiple bachelor's degrees, the first 16 years (after age 6)due to student loans? 66% of the US economy is based on consumer spending, not on bonds, money markets, or the stock market. Going on vacation does much more good than harm to both the vacationer and the people whose lives he/she enriches by spending money while on vacation.

Give me your tired, poor huddled masses and put them into agribusiness plantations who ignore OSHA and pay $1.50 an hour so that they may generate the highest profits possible.

[monitor]

Brad: The net benefits from immigration including the large gains to the immigrants themselves are enormous.

Yeah, and the next cost of highway robbery is zero - your loss, my gain.

[Randolph Fritz]

Maybe I'm missing something...what would be so awful about requiring US labor laws to apply to Mexican workers in the USA? It would mean, of course, that we'd have to allow them to come and work but, if labor law was enforced, I think we could live with that.

[anne]

http://economistsview.typepad.com/economistsview/2006/03/krugmans_notes_.html

March 27, 2006

Paul Krugman's Notes on Immigration
Edited by Mark Thoma

Immigration is an intensely painful topic for a liberal like myself, because it places basic principles in conflict. Should migration from Mexico to the United States be celebrated, because it helps very poor people find a better life? Or should it be condemned, because it drives down the wages of working Americans and threatens to undermine the welfare state? I suspect that my March 27 column will anger people on all sides; I wish the economic research on immigration were more favorable than it is.

In writing this piece I drew mainly on three sources, research papers by economists I know and trust. First is a paper, “Immigration Policy,” by Gordon H. Hanson (pdf) of the University of California at San Diego. Mr. Hanson is one of my former students, and a leading expert on all matters having to do with U.S.-Mexican economic relations, especially issues having to do with income distribution. This paper gives a good overview of the (small) gains from immigration and the fiscal impacts.

Second is a paper by George Borjas and Lawrence Katz of Harvard, “The Evolution of the Mexican-Born Workforce in the United States." (pdf). Mr. Borjas is a leading expert on immigration issues; Mr. Katz is one of America’s leading labor economists.

Third is a paper by Mr. Hanson, Matthew Slaughter of Dartmouth (another former student) and Kenneth Scheve (pdf) of the University of Michigan. This paper alerted me to the way immigration penalizes more generous states.

Like all research results, the conclusions of these papers may have to be revised in the light of future research. But I’m afraid that the three negative conclusions I stressed in the column are fairly robust.

First, the benefits of immigration to the population already here are small. The reason is that immigrant workers are, at least roughly speaking, paid their “marginal product”: an immigrant worker is paid roughly the value of the additional goods and services he or she enables the U.S. economy to produce. That means that there isn’t anything left over to increase the income of the people already here.

You might ask why, in that case, there are any gains from immigration. The answer is that when a country receives a lot of immigrants, the wage paid to immigrants reflects the marginal product of the last immigrant, which is less than that of earlier immigrants. So there is some gain. But as Mr. Hanson explains in his paper, reasonable calculations suggest that we’re talking about very small numbers, perhaps as little as 0.1 percent of GDP.

There is, by the way, a possible out from this argument in the case of high-skill immigrants. You could argue that, say, South Asian engineers who move to Silicon Valley add to the dynamism of the region, generating benefits much larger than their wages. (Economists know that I’m talking about “positive externalities.”) But that’s not an argument you can easily make about Mexican migrants who haven’t completed high school.

My second negative point is that immigration reduces the wages of domestic workers who compete with immigrants. That’s just supply and demand: we’re talking about large increases in the number of low-skill workers relative to other inputs into production, so it’s inevitable that this means a fall in wages. Mr. Borjas and Mr. Katz have to go through a lot of number-crunching to turn that general proposition into specific estimates of the wage impact, but the general point seems impossible to deny.

Finally, the fiscal burden of low-wage immigrants is also pretty clear. Mr. Hanson uses some estimates from the National Research Council to get a specific number, around 0.25 percent of G.D.P. Again, I think that you’d be hard pressed to find any set of assumptions under which Mexican immigrants are a net fiscal plus, but equally hard pressed to make the burden more than a fraction of a percent of G.D.P.

[Karlsfini]

Nice photo, Anne. Which bird do you think won?

Thirty years ago I saw Eric Severeid get as excited as a Scandinavian can get -- all about illegal immigration, a problem he said had reached the breaking point.

True, it's a bigger problem than ever, but why are we taking it on right now?

Rove.

Let's see which blogger catches on first.

[John Emerson]

We're really talking about the difference between a national policy and an economic policy. A national policy would favor nationals (Americans) whereas an economic policy would look only to economic growth -- or, possibly but not likely, benefits to individuals regardless of nationality. (I say "not likely" because economics tends to have a strong bias toward property and against labor; labor is a cost, after all, and should be minimized).

Without a national policy there's no real reason to have nations at all, and globalist utopianism often makes it seem that that's a goal. Neo-liberals are always happy to talk about the evils of nationalism, nativism, etc.

However, it may be doubted that in a post-nationalist world that war, for example, would disappear. In a monopolar non-national world war would just be organized differently, as we're starting to see.

Open immigration would serve to keep the bottm half of the American population permanently insecure and increasingly impoverished and disenfranchised. From the point of view of citizenship and community this would be a very bad result, even if the average net income of the US were somewhat higher.

[baileyman]

To quote:

Particularly, we should focus on the "large gains to the immigrants themselves." The net benefits from immigration including the large gains to the immigrants themselves are enormous.

end quote

Presumably, if there is no net gain, the the gains to the immigrants equal everyone else's losses. So do the enormous gains of a few percent equal the small losses of a large percent? Maybe so. I have a hard time reconciling Delong's other thoughts with the idea that it's ok to build a policy that hurts the people already here. Isn't what he desires is for both parties to be gainers?

[save_the_rustbelt]

Hey, this is a great idea.

Take jobs away from young Americans, but then let them live on the Earned Income tax credit.

I doubt that Professor DeLong knows any real blue collar type people, and has any idea how most people exist in this country.

[save_the_rustbelt]

"Open immigration would serve to keep the bottm half of the American population permanently insecure and increasingly impoverished and disenfranchised. From the point of view of citizenship and community this would be a very bad result, even if the average net income of the US were somewhat higher."

In this sense Brad DeLong seems to agree with John Snow.

Love them averages.

[wml]

"Presumably, if there is no net gain, the the gains to the immigrants equal everyone else's losses. So do the enormous gains of a few percent equal the small losses of a large percent? Maybe so. I have a hard time reconciling Delong's other thoughts with the idea that it's ok to build a policy that hurts the people already here. Isn't what he desires is for both parties to be gainers?"

Maybe think of it like this. Suppose everyone has utility from x$ equal to square root of x. Consider two equal sized groups of people, pontential immigrants and low-skilled workers.

Suppose with no immigration the money distribution looks like: 0$ immigrants, 100$ workers. Suppose with immigration it becomes 25$ immigrants, 81$ workers. Aggregate average utility is then 5 utils for no immigration, 7 with immigration. Total aggregate wealth is 100$ vs 106$.

Now suppose you could transfer money with no dead weight cosrs after allowing immigration. So you consider trying to make low-income workers better off then they would be with no immigration. So let's say with transfers and immigration you now have native workers with 101$ and immigrants with 5$. But now total average utility is lowered to around 6. So again, a pure utilitarian would have to reject such a transfer. Add in dead weight costs of transfering and things get even worse.

As I said before, however you look at it, trying to protect current American workers from immigration is an excercise in screwing the extremely poor to help out the moderately poor. So unless you assign special value to Americans over foreigners you shouldn't do it. Now many/most/almost all normal practical Americans would be happy to make that value call. But economists aren't normal people :)

[Darin London]

Can someone post on the Economic Incentives
being created by the various proposals being
bandied about right now. If, after 5 years, you make immigrants go home before applying for real citizenship (meaning they probably will either stay illegally, or go home and not come back), doesnt that merely create an artificial ceiling for immigrant labor, because immigrants will essentially be forced to go home just as they are beginning to socialize into the US system, get used to its job market, and even learn the language. Wouldnt this merely make sure that immigrants cant compete with middle-class kids for more respectable jobs?

[anne]

http://www.nytimes.com/2006/03/28/politics/28immig.html

March 28, 2006

Bill to Broaden Immigration Law Gains
By RACHEL L. SWARNS

WASHINGTON — With Republicans deeply divided, the Senate Judiciary Committee voted on Monday to legalize the nation's 11 million illegal immigrants and ultimately to grant them citizenship, provided that they hold jobs, pass criminal background checks, learn English and pay fines and back taxes.

The panel also voted to create a vast temporary worker program that would allow roughly 400,000 foreigners to come to the United States to work each year and would put them on a path to citizenship as well.

The legislation, which the committee sent to the full Senate on a 12-to-6 vote, represents the most sweeping effort by Congress in decades to grant legal status to illegal immigrants. If passed, it would create the largest guest worker program since the bracero program brought 4.6 million Mexican agricultural workers into the country between 1942 and 1960.

Any legislation that passes the Senate will have to be reconciled with the tough border security bill passed in December by the Republican-controlled House, which defied President Bush's call for a temporary worker plan.

The Senate panel's plan, which also includes provisions to strengthen border security, was quickly hailed by Democrats, a handful of Republicans and business leaders, as well as by the immigrant advocacy organizations and church groups that have sent tens of thousands of supporters of immigrant rights into the streets of a number of cities to push for such legislation in recent days.

But even as hundreds of religious leaders and others rallied on the grounds of the Capitol on Monday, chanting "Let our people stay!," the plan was fiercely attacked by conservative Republicans who called it nothing more than an offer of amnesty for lawbreakers. It remained unclear Monday night whether Senator Bill Frist, the Senate majority leader, would allow the bill to go for a vote this week on the floor or would substitute his own bill, which focuses on border security. His aides have said that Mr. Frist, who has said he wants a vote on immigration this week, would be reluctant to move forward with legislation that did not have the backing of a majority of the Republicans on the committee.

Only 4 of the 10 Republicans on the committee supported the bill. They were the committee chairman, Senator Arlen Specter of Pennsylvania, and Senators Lindsey Graham of South Carolina, Mike DeWine of Ohio and Sam Brownback of Kansas. All eight Democrats on the committee voted in favor of the legislation.

The rift among Republicans on the committee reflects the deep divisions in the party as business groups push to legalize their workers and conservatives battle to stem the tide of illegal immigration. Mr. Specter acknowledged the difficulties ahead, saying, "We are making the best of a difficult situation." But he said he believed that the legislation would ultimately pass the Senate and would encourage the millions of illegal immigrants to come out of the shadows.

"We do not want to create a fugitive class in America," Mr. Specter said after the vote. "We do not want to create an underclass in America." ...

[r flanagan]

"Isn't what he desires is for both parties to be gainers "unquote baileyman.

The jobs should be created where the immigrants already live, among their families and people who speak their language.That means improving the ability of their countries to export to the US .
NAFTA was supposed to do that but the tariff advantages it provided proved inadquate
to compete with the near subsistence wage costs available in e.g. China.. Whatever inefficiencies tariffs supposedly create
(Keynes for one believed that "modern mass
production processes can be performed in most countries and climates with almost equal efficiency" and that free trade
was more likely to provoke war than keep peace ) INCREASING US tariffs to the rest of the world would automatically increase the competitiveness of Latin American manufacturers. Keynes again: "the virtue of protection is that it does the trick"

In a sentence our workers can't afford BOTH
free trade and immigration . Been tried.Didn't work.

[wml]

Andrew posts:

"Let us back up a bit and look at resource issues. How large a population can America support? (Currently, due to immigration, America has the highest population growth rate of any developed nation.) Some resources, such as water, do not have replacements. Can America afford to keep growing its population at its current rate and still have enough water to drink and irrigate its farms? If we do not slow our population growth, is this an America you want to live in?

Looking at our energy issues, we import 60% of our oil and 20% of our natural gas. Since domestic production in both commodities is declining, population pressures will drive the increase of those imports. Is it in our national security interests to pursue immigration policies that increase our dependence upon foreign fossil fuels?"

There's plenty of land to live on. As far as food, worst case is we have to stop feeding corn to animals and eat the corn directly. This of course would hurt our standard of living, but see below.

This argument is akin to arguing that we don't want any of the poor in the world to have a higher standard of living, because this will increase global use of fossil fuels and other limited resources, forcing those of us who are currently rich to cut back. So yeah, maybe those of us currently living in industrialized countires might be better off if we kept the rest of the planet in poverty. (Or maybe not, since we'd have more people working on solutions to the world's problems, more artists, larger general talent pool to draw on, etc.) Whether you want to take that position again depends on your value system.

[anne]

http://www.calvorn.com/gallery/photo.php?photo=5361&u=17|2|...

Red-bellied Woodpecker
New York City--Central Park, The Ravine.

Karlsfini, woodpeckers and sparrows just argue :)

[mickslam23]

My father was in the bricklayers union and made $53K in 1974. Of course, he worked like 80 hours a week the whole year. However, Lets face it, no bricklayer could make that now. And, its all due to illegal immigration.

Supply and Demand, Supply and Demand. They are holding down the wages of all of our jobs, not just the least skilled.

"In a sentence our workers can't afford BOTH
free trade and immigration" Workers are getting the worst of both worlds. They have to compete internationally with countries without labor laws, and internally with people who are willing to work without labor laws.

Its not so much the benefits of trade. Do we want to live in a country where labor laws are flouted? Brad, I guess, does.

Are we responsible for what happens outside our borders? Yes, but not to the extent that we are responsible for what happens inside.

[Anonymous]

I can't but imagine that if foreign PHDs were willing to trek across the Arizona desert to find illegal work in our Universities at 1/3 the going rate that some of the opinions expressed here might be different.

As much as I love Krugman and Delong, it's a little too much to hear them talk about immigration (legal or illegal) when they work in one of the most restricted and protected occupations in America.

Americans should be willing to support the costs of skilled, legally employed craftsmen, just as we're willing to pay the costs of skilled, legally employed economists.

[anne]

"Americans should be willing to support the costs of skilled, legally employed craftsmen, just as we're willing to pay the costs of skilled, legally employed economists."

Yes :) and I wonder why there is not discussion of the effectiveness of strengthening unions in this regard; after all, there is the European model of protection.

[Mr. Econotarian]

From 1850 until 1940, the US had a higher foreign born population by percentage than it does now.

From the 1840 until 1910, the US had a higher ratio of yearly immigration to population than we do today.

From 1900-1910, the U.S. allowed in MORE LEGAL IMMIGRANTS than were allowed in from 1990-2000. Despite the U.S. population being twice the size about 100 years later.

Before 1917, there were almost no limits on immigration. Today, a low-skill Mexican with no family in the U.S. has NO WAY to immigrate legally.

Even a Mexican with family in the U.S. must have a family member above 125% of the poverty line as a legal resident to sponsor them, then must wait two to five years to fit into the tight quota.

We seem to have made it through OK.

My great uncle had no problem living in a tenament in Brooklyn in the 1930's sleeping six to a room with no indoor toilet, and then went on to get a Ph.D. in Biology and research infectious diseases.

[phil]

Are there not opportunity costs here that we aren't discussing?

For example, when it was difficult to get people to pick certain fruits or vegetables at various times in the past, there was a big incentive to invent new picking machinery. New machinery proved successful even though most thought that a certain veggie had to be picked by hand or it would suffer too much damage in the machine. If the argument in favor of legalizing illegal immigrants who work in our fields is that it keeps our fruits and veggies cheap, well, where is the data on the costs if more of this work could be automated?

How about the costs to a country like Mexico? Granted, the amount of money sent back home by hardworking illegal immigrants is huge. But, what are the costs to the citizens of Mexico of having a valve like the US to reduce the pressure on the Mexican govt to reform? The people willing to endure the crossing process can generally be considered the most willing to take risks, the most willing to dream for bigger and better, the least willing to settle for a life of poverty and corruption. Therefore, the illegal immigration option serves as a damper on the potential for Mexico to provide a better quality of life for its citizens. How much of a market are we potentially missing out on in Mexico? Where is the data on these types of costs?

I think that the number of people who participated in the recent protests might cause some people to underestimate the amount of real anger out these regarding illegal immigration, especially among people who are involved in various contruction related trades. In fact, I think that the blowback will be akin to the roar over the Dubai Ports deal. There are huge numbers of small businesses that are not getting the contracts they used to due to the availability of illegal roofers, bricklayers, masons, framers, etc. Please keep in mind that these sort of jobs are some of the last remaining professions where someone without a degree can (or could) earn a living wage. Where are the data on these types of costs?

Finally, the rule of law can be thought of as the only kind of protection that those in the lower quintiles can count on. Those of us without the ability to hire accountants, or have connections in city halls, or hire high priced lawyers. We are sunk if we cannot count on the law. The idea that potentially millions of people who have broken the law by illegally working in this country, or by illegally hiring illegal workers, are going to get this enormous free pass is absolutely infuriating and frightening at the same time.

Sorry for the long post. Most pundits writing about immigration are not having their livlihoods directly threatened by competition from illegal, cheaply paid, unprotected by OSHA, workers. But, I must emphasize again how many of us are, and how angry, frustrated and betrayed we feel.

Please imagine for a moment if economists from the former Soviet Union countries started flooding into this country. They might not be as polished as some US economists, and not understand some issues related to an open market system, but they have the ability to crank equations and other statistics and can be scooped up by the handfull on street corners. How would you feel if a quarter to a half of the people in your field were replaced by these people?!

[John Emerson]

Econotarian: One of the issues here is that the present immigration pattern, especially but not only the guest-worker form, does not seem likely to bring immigrants up into the middle class. It seems more designed to produce a big demoralized, poor, insecure labor class, into which many native-born Americans will fall. Immigration is part of a bigger picture involving the general degredation of the condition of labor in this country.

By and large, the "resources" argument (Andrew) is irrelevant. In the globalized economy, almost everything is imported and exported freely. No nation is self-sufficient for resources or anything else.

The "crowding" and "quality of life" arguments are somewhat irrelevant too. Urbanization has been going on for centuries, and it isn't caused by immigration. These tend to be NIMBY arguments by people who want a better life than they're able to pay for.

[save_the_rustbelt]

"Free Trade places wage gains, workplace safety, vacation, pensions, medical benefits, retirement, environmental safety all on the chopping block. Fair Trade protects. Krugman understands this. Sadly Brad DeLong and Tom Friedman do not."

Absolutely correct.

What we have now is "manipulated trade," with the monied interests owning the government and jerking workers around all will.

[save_the_rustbelt]

"My great uncle had no problem living in a tenament in Brooklyn in the 1930's sleeping six to a room with no indoor toilet, and then went on to get a Ph.D. in Biology and research infectious diseases."

Some of my family almost starved the death in the Dustbowl so should we strive to repreat the experience?

I-l-l-e-g-a-l means illegal.

[jim harrington]

I sent Paul Krugman the following message in response to the New York Times's invitation to "submit comments" to him concerning his recent editorial on immigration:

"I am surprised that you apparently did not see fit, before writing your editorial on immigration, to consult the excellent paper recently published by David Card in which he effectively refutes George Borjas's argument that current immigration reduces the wages of native unskilled workers. The paper is NBER Working Paper No. 11547 and can also be found at the following web address: http://www.phil.frb.org/econ/conf/immigration/card.pdf."

[Doctor MEmory]

Quote Charles, way above, "Foreign scientist comes to US. Does not know anything about US lab practices, suppliers, etc. Requires huge investment of time, probably working months of time, by other students in the lab." and so on.

Shorter version: It's amazing how convincing my arguments are when I just make stuff up.

Charles, I'd be very curious to know how many graduate or professional chemistry, biology or physics labs you've ever worked in.

IT'S IN THE HEART, NOT IN THE ARGUMENTS.

Krugman's Migra article has to be read at an in between the lines level of sophistication in the sophistic sense of the word. First the half truths: The Sadam/9/11 association sophism. Borders/illegals/bad people. Southwest borders are not the only entry for illegal immigrants. Florida beaches are "OK" for cuban illegals. East coast airports are open ports of entry for soon to be illegals