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Time to view immigration issue through an economic lens

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By James McCusker
Herald Columnist
Published:
As the current, unloved Congress departed for its summer recess, its failure to pass new laws was cited as one of its supposed flaws. And the most frequently cited example of this failure was its inability to pass comprehensive immigration reforms.
One of the reasons for the impasse in Congress on this issue is the changing character of debate, where facts and logic disappear in a cloud of pejoratives and name-calling. In real life, one of the guiding principles of successfully negotiating an agreement is to leave both parties feeling that they have won something — even if that something is only having “had their say” and their views listened to. Anything less produces a victor who has acquired a new possession: an enemy for life.
As a country we already have enough enemies for life — at home and abroad. We need no more.
The relationship between politics and real life, though, is a complicated and interactive one. To some degree, the deep divisions in Congress reflect the deep divisions in our population. On the other hand, the divisions that exist in real life are deepened, amplified, aggravated and sometimes even created by behavior in Washington, D.C., and how it is reflected in the news media.
The immigration issue is an important one. It mixes elements of what we are and what we represent as a country with practical aspects of what can and should be done to ensure that that same country doesn’t sink from the weight of its misguided policies.
Economics is not the only lens we should use to get a clear picture of the immigration issue. And in some respects it may not be the best lens, either. But an economics perspective could change the nature and structure of our national disagreement on the subject.
The economics question that usually comes up first is whether immigration is good or bad for the economy. But the first question should really be: How much immigration? That’s the only way to measure its impact.
This question is almost never addressed in today’s “debate” but it is crucial. The value of immigration to our nation is almost certainly not something that is unchanging irrespective of its volume or total quantity.
We wouldn’t be far wrong if we looked at an economic change such as immigration the way we look at, say, ice cream. Ice cream is a good thing. It delicious and most people like it. If consumed too rapidly, though, it results in a headache. If too much is consumed in a short time we get a stomach ache. And if we consume too much over a longer period of time, it changes our shape, our health, and our ability to do things.
None of these effects change the nature of ice cream. It is still a good thing and, historically has been good for us. When it comes to measuring its impact, though, quantity and velocity are important.
They are certainly important when we look at immigration through an economics lens. The Center for Immigration Studies, for example, recently issued a report, based on U.S. census data, that the flow of immigrant workers had reached a volume that absorbed all of the job growth created by our economy over the past fourteen years. The report states, “In the first quarter of 2000, there were 114.8 million working-age natives holding a job; in the first quarter of 2014 it was 114.7 million.” In the same time period immigrant workers gained 5.7 million jobs.
The Gross National Product is not a police procedural. It doesn’t care “who done it,” so it grew during the 2000-14 period whether those jobs were filled by native-born or immigrant workers. It does make a difference, though, in terms of the GDP growth rate, income distribution, and the structure of the workforce, though.
One of the effects is a downward pressure on wages. The volume and overall impact of immigrant workers has been large enough to allow employers to maintain wage levels even in the face of inflation-driven prices and living costs. This creates a drag on GDP growth which tends to aggravate the employment problem.
This is just one example where facts and numbers lead to some insights on the immigration issue. It certainly provides some insight into why so many Americans are unhappy about the rapid flow of immigrants into the workforce — and why so many voters believe that it is out of control and has been for some time.
An economics-based approach to the immigration issue might help to move our current disagreements away from the careless calumny and name-calling that poison our discussions. It won’t provide all the answers we need but it is a start.
James McCusker is a Bothell economist, educator and consultant. He also writes a monthly column for The Herald Business Journal.
Story tags » Economy, Business & FinanceHouseSenate

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