Economist defends open immigration
If the world had no restrictions on labor, economists estimate that global Gross Domestic Product, or GDP, which is an indicator of wealth, could increase between 50 and 150 percent, according to Benjamin Powell.
“No other policy, that economists can talk about today, can increase global GDP by anywhere near as much,” said Powell, a professor of economics from Texas. “This is an often underappreciated fact that appears to go unmentioned in popular discourse.”
Powell, author and director of the Free Market Institute at Texas Tech University, visited the university on March 6. Powell stated that looking at the economics of immigration supports “free trade in labor.” The first idea that Powell discussed was specialization.
“If we allow each person to specialize in what they’re relatively better at and then swap we increase the economic pie for everybody,” Powell said.
For example, a medical doctor with children could spend half of their time doing medicine and half their time doing childcare. The doctor could make a lot more money by hiring a nanny and spending more time doing medicine. Here the doctor and the nanny both benefit because they’re trading the labor that they’re relatively better at.
“I can’t outsource my childcare to India, I can’t outsource my lawn care to Mexico,” Powell said. “For those services the laborer actually has to move … you need international labor mobility to get people to where they’re needed most.”
The public however, is often under the impression that the gains that the immigrants get from moving to the U.S. come at the expense of U.S. citizens. This claim doesn’t have any evidence according to Powell.
Powell used janitors as an example, asking why they get paid more in the U.S. than other places. One reason is that there are fewer low skilled workers in the U.S. The other is, having a clean office in the U.S. creates more value since people in an industrialized country are, on average, more productive. Janitors gain from getting paid more and the U.S. citizens gain from having clean offices at a lower price.
Since the 2008 recession, legal and illegal immigration from Mexico has been a net negative, Powell said. He said illegal immigration often result from people who fly into the country and overstay their visa and that much of the foot traffic between Mexico and the U.S. is people leaving the United States.
“If Trump gets his wall, he better make sure there’s a door in it, otherwise he’s going to be keeping people in here that are trying to go back,” Powell said.
George Borjas, a Harvard economist, is one person who favors more closed immigration rules. His idea is that if the U.S. gains $50 billion from immigration, compared to the entire U.S. economy the gains are not that large. However, the $50 billion gain that Borjas uses is on the conservative side. Other economists have given estimates that the U.S. could gain hundreds of billions or even trillions of dollars, according to Powell.
“For someone taking a purely nativist perspective it’s still important to count the global gains,” Powell said. “You would have to be pretty un-creative to come up with a way to reallocate that back to the native born.”
For example, if the people in Mexico are more wealthy, they can spend more money on U.S. goods.
Another thing that the public still seems to be confused about whether or not immigrants take the jobs of american citizens. Here, economists say that immigrants do not take the jobs of citizens, according to Powell.
This is because people see that an immigrant takes a job that a U.S. citizen could do, but what they don’t see is the new jobs that are created by immigration. Powell used the examples of when the baby boomers, women and large influxes of immigrants in the past went to work in the U.S. Although, there has been large increases in the number of workers, unemployment has not increased, according to Powell.
“Some people are saying, ‘our jobs are going overseas,'” Powell said. “No. We’re changing our mix of jobs … the total jobs are going to stay the same.”
You’re 300,000 times more likely to be killed by lightening than by a terrorist attack by someone not from the U.S., Powell said explaining that there isn’t a statistical reason to screen people for terrorism.