Fortunately, we can handle his concern. The reason is that most of the U.S. welfare state is aimed at the elderly, not the poor, and most immigrants are young. Expenditures on Social Security, Medicare, and the nursing home component of Medicaid vastly exceed expenditures on narrowly defined welfare, food stamps, housing subsidies, and the part of Medicaid aimed at the non-elderly poor. Moreover, one important provision in the 1996 welfare reform law, pushed by Republicans in Congress and reluctantly signed by President Clinton, was a ban on giving welfare benefits to illegal immigrants and a requirement that even legal immigrants wait five years before getting benefits.
Interestingly, even illegal immigrants benefit the U.S. Treasury by paying taxes using fake Social Security numbers. Because the numbers are fake, those who pay them will never receive Social Security based on those taxes and so those taxes are pure profit for the U.S. government. In fact, in 2005, the Social Security Administration’s chief actuary, Stephen C. Goss, estimated that without all the taxes paid on invalid Social Security numbers, “the system’s long-term funding hole over 75 years would be 10 percent deeper.” Even legal immigrants help the Social Security situation, for the simple reason that most are young. A Social Security simulation over a decade ago concluded that if net (legal) immigration were to rise from 900,000 annually to 1.3 million, the Social Security funding gap would fall from 1.92 percent of total payroll to 1.67 percent.
This is from my latest Defining Ideas article, “The Case for More Immigration,” published today by the Hoover Institution.
Another excerpt:
One of the main concerns voiced by opponents of immigration, especially President Trump and his supporters, is that immigrants will bring increased crime. If we count illegal immigration as a crime, then this is true of illegal immigrants by definition. But the crimes most people worry about are violent crimes like murder, rape, and assault, and crimes against people’s property. In a July 2015 study for the American Immigration Council, Walter Ewing, Daniel E. Martinez, and Ruben G. Rumbaut pointed out that between 1990 and 2013, the foreign-born share of the U.S. population “grew from 7.9 percent to 13.1 percent” and the number of illegal aliens grew from 3.5 million to 11.2 million. And the violent crime rate over those same 23 years? It fell by 48 percent. The property crime rate fell by 41 percent. Moreover, they found, in 2010, 1.6 percent of immigrant males between ages 18 and 39, were in prison, compared to twice that percent, 3.3 percent, of the native-born.
What about the breakdown of crime between legal and illegal immigrants? In a study released this week, political scientist Michelangelo Landgrave of UC Riverside and Alex Nowrasteh of the Cato Institute find that the incarceration rate for illegal immigrants was 756 per 100,000. This is substantially higher than the 364 rate for legal immigrants, but substantially lower than the 1,471 rate for native-born Americans.
Read the whole thing, especially if you want to comment.
READER COMMENTS
Airman Spry Shark
Mar 6 2019 at 5:07pm
I think you would fail an ideological Turing test with respect to those who are concerned with cultural impacts; it’s not just (or even primarily) about language. Just ask any non-Californian what they think of all the Californians moving into their State.
Airman Spry Shark
Mar 6 2019 at 5:16pm
Addendum: for instance, what are the relative rates of support by natives & immigrants for rent control?
RPLong
Mar 6 2019 at 6:21pm
Airman, I don’t know what immigrants think about rent control. Do you have any data on this?
As David said, English speaking ability is one measure of cultural impact, or perhaps willingness to conform. Are you suggesting that opinions about rent control are a better measure of cultural impact than language? Do you have any other good measures we should evaluate empirically?
Airman Spry Shark
Mar 6 2019 at 6:39pm
I’m suggesting that opinions about the proper relationship between citizens & governments is a better measure than facility with the English language; I was merely using rent control as a particularly salient example given David’s own recent demonstration of its destructiveness.
David Henderson
Mar 6 2019 at 7:25pm
Ok. I’ll bite. Do you have evidence that immigrants like rent control, or other oppressive government measures, more than natives?
Airman Spry Shark
Mar 6 2019 at 7:52pm
Jon Murphy
Mar 7 2019 at 9:10am
Airman-
That’s not really evidence to your point.
Hazel Meade
Mar 11 2019 at 12:12pm
As I’ve mentioned elsewhere most immigrants are actually pretty socially conservative. Hispanics in particular tend to be more religious and more traditional in terms of family structure and gender roles.
the most radical changes in US culture in the last 100 years have come from internal organic culture change – new generations of US born citizens. Think of the 1960s, hippies and free love. That wasn’t immigrants doing that. Gay marriage? That didn’t come from immigrants.
In fact, it’s kind of hard to identify any major shifts in American culture that did come from immigrants.
Mark Brady
Mar 6 2019 at 6:52pm
It seems to be generally assumed that increased immigration would come mainly from Central and South America and the Caribbean. Yet we can easily imagine that immigration would come from rich countries (for whose residents the cost of the one-way airfare is peanuts) and from rich and middle-income people in developing countries (for whom the cost of the airfare is also minimal). I suggest that we should discuss this scenario as well. Maybe it doesn’t much affect the analysis, but it surely affects the distribution of the gains.
David Henderson
Mar 6 2019 at 7:20pm
True. If higher-income people come, the high school dropouts in the United States would lose less or gain even more.
Mark Brady
Mar 8 2019 at 4:46pm
But unskilled workers would likely arrive from rich countries (one-way airfares are at most a few hundred pounds or euros from Europe), and U.S. high-school dropouts would lose more or gain even less.
David Henderson
Mar 6 2019 at 7:28pm
I think a huge amount of immigration would come from China and India.
Mark Brady
Mar 8 2019 at 4:35pm
So would you let them in?
David Henderson
Mar 10 2019 at 11:47am
Some of them.
Benjamin Cole
Mar 6 2019 at 7:07pm
Okay, I read the whole thing.
Not one mention about how the US can no longer build infrastructure or housing, often due to a form of property rights that excludes the right to develop.
The Hoover institution article does address lower wages for people who already have low wages and will have lower wages due to immigration, but says that lower wages can be offset by government programs. Oooh-boy.
I think a nation with very tight labor markets is probably a happier country, and one in which more people will subscribe to free markets and free enterprise.
If the US cannot build any more housing or infrastructure— and Econo logger Scott Sumner says the US should not even try to build infrastructure it is so bad at it—then it’s a good idea to limit population growth. Happily, this seems to be a natural result in all developed nations, that population growth goes negative.
An interesting question: if the US population should decline for many decades, would people actually feel richer, able to afford housing? Some people today move to depopulating Midwestern regions and exult over the housing they are able to afford, the less crowded roadways and ample parks.
They say the woman called AOC favors open immigration. I expect to see her in the White House someday.
Maybe the US will be more successful as a socialist nation, but I tend to doubt it.
David Henderson
Mar 6 2019 at 7:22pm
I read Scott pretty regularly and I’m pretty sure he didn’t the U.S. shouldn’t build infrastructure and he definitely didn’t say the U.S. shouldn’t build housing. As I recall, he said the U.S. government and state and local governments are bad at infrastructure. I agree with that. In any case, it has little to do with my article.
Benjamin Cole
Mar 8 2019 at 5:51am
add on: Should not all true libertarians be against all government financed and constructed infrastructure?
And how dare the Keystone pipeline ramrod across rancher land, without owner’s permission.
Seems to me libertarians need to come up with a persuasive arguments for “throwing the borders open” and no more infrastructure building—the results of a libertarian rule.
Is this like looking for a “good AAF game to watch.”? Sorry, football joke.
Jon Murphy
Mar 8 2019 at 8:25am
Purity tests lead to absurd conclusions
David Henderson
Mar 6 2019 at 7:27pm
You could certainly call dropping the bottom tax rate from 10 to 8 percent a government program. I see it as a reduction in a government program, but I’ll grant you that the EITC is a government program.
I don’t get the “Oooh-boy” part, though. Are you willing to explain?
Benjamin Cole
Mar 6 2019 at 9:27pm
David Henderson.
“Oooh boy,” is just the sound of exasperation.
BTW…..MIT-Yale recently said the number of illegal immigrants is probably 22 million or so, not the widely cited 11 million figure. The non-link below will get you to the link through Google search.
mit.edu/ideas-made-to-matter/study-undocumented-immigrant-population-roughly-double-current-estimate
From that study:
“With respect to social services, the [true immigrant numbers] results could help inform the resource allocation of agencies and nonprofits that provide services to the undocumented immigrant population.
‘What’s acceptable for a population of 11 million is unlikely to be sufficient for a population of 22 million,’ Fazel-Zarandi said.”
—30—
Am I allowed another “oooh-boy”?
As far as I know, no one who shows up at a county or community hospital is denied service.
Scott Sumner may have tongue-in-cheek a bit, but he has said infrastructure programs are not worth it, done as they are in the US. Many projects are “white elephants.” (Sumner actually misuses the expression a bit, but you get the sense).
This is one headline of Sumner’s from Nov. 6, 2018.
No more public mass transit infrastructure – Econlib
True, Sumner has not yet, say, said, “no more sewer systems.”
But no more mass transit!
Sumner probably prefers more housing be built, but he has not called for a Constitutional ban on property zoning (local zoning was ruled Constitutional in 1926, in a split vote), which is about the only way more housing will be built, and even then prospects would be iffy.
Imagine telling your neighbors in Pacific Grove to expect a few hundred bulldozers to show up soon, property zoning has been overturned, the libertarians have triumphed!
A new Pacific Grove rule would go into effect, such as you cannot get a building permit without a sewer hook-up, and we are giving out sewer hook-ups every blue moon.
As a practical, pragmatic reality, the US will not build much infrastructure or housing going forward, whatever I, or Scott Sumner, or you, want.
That being the case, what should (de facto) immigration policy be?
I
Jon Murphy
Mar 7 2019 at 9:09am
Precisely define “tight labor market.” This is the second time I’ve seen this argument come up, but the other person is having the devil’s own time defining this term in any meaningful sense.
Benjamin Cole
Mar 8 2019 at 5:46am
The devil you say.
How about, as currently measured in the US, an official unemployment rate of 3.4% is considered “tight.” You could quibble this way or that….
Jon Murphy
Mar 8 2019 at 8:30am
No, that doesn’t work. 1) It’s not a definition, it’s a metric (I asked you to define what a tight labor market means. You’ve told me how to measure it), and 2) There are lots of ways to get 3.4% unemployment and it likely not be “tight” or “a happier country.”
Consider the following:
A country exists with a labor force of 1000 workers. 34 of those workers are unemployed, thus leading to an unemployment rate of 3.4%. Now, let’s say that 20 of those workers are frustrated and convinced they’ll never find work and quit looking for jobs. The number of unemployed falls to 14 and the labor force falls to 980. Thus, the unemployment rate falls to 1.4%. In this scenario, the labor market is not “tighter” and it is highly doubtful the nation is subsequently happier (indeed, given their frustration, it is likely the nation as a whole is less happy).
So, you still need a definition and a better metric.
Warren Platts
Mar 10 2019 at 4:35pm
You should read Ricardo’s chapter on wages. He defines a tight labor market as one where average wages are above what he and Adam Smith called the “natural wage.” And yes, workers are much happier, according to Ricardo, in a tight labor market, and that workers are miserable in a slack labor market where the money wage is below the natural wage.
Jon Murphy
Mar 10 2019 at 8:10pm
Ok. The problem with that definition, however, is that the Smithian/Ricardian/Malthusian conception of wage theory is factually incorrect (they had a labor theory of value that has since been disproven), so the concept of “natural wage” doesn’t mean much here in the precise context they use.
If we use “natural wage” to more mean equilibrium, then a “tight” labor market would be one characterized by unemployment, and indeed a “tighter” labor market would have more unemployment (since wages would be above equilibrium). It’d be weird to characterize that as a “happy” labor force.
Warren Platts
Mar 12 2019 at 4:28pm
The labor theory of value has nothing to do with Smith and Ricardo’s concept of a natural minimum wage below which people will refuse to work, unless forced to by the threat of starvation. Moreover, they are quite clear that the “natural wage” is culturally determined. In England in those days, the natural wage had to be enough to buy linen shirts and leather shoes, whereas in France people were content to go barefoot or use wooden shoes.
A tight labor “market”, if it is a true market, is by definition in equilibrium. Whether a market is tight or slack has nothing to do with equilibrium–there is equilibrium either way. One can artificially boost wages with mandated minimum wages that are above the equilibrium. But that is not a tight labor market. A tight labor market is, by definition, one where wages are above the natural wage. Cf. places like Minot, North Dakota. When there is a boom, the demand for labor shifts to the right faster than does the supply of labor. The price of labor goes up.
And yes, workers are happier during a tight labor market when wages are high and if you get fired, the next job is a single text message or a walk around the corner away, exactly as Ricardo himself said.
Jon Murphy
Mar 7 2019 at 9:20am
Good article, David. I especially appreciate the “small-steps” approach in the article, rather than a more radical “throw open the borders” approach typically discussed.*
My major concern with more immigration, though one you implicitly handle, is an issue of cultural conflict. I am not worried so much about them learning the language as a conflict on cultural focal points.
Thomas Schelling writes a lot about these focal points, and for the remainder of this comment I’m going to refer to them as “Schelling points.”
A Schelling point is some focal point that people tend to rally around. For example, if you are going to New York City to meet a friend, and forget to arrange a meeting place beforehand, you both may be drawn to Times Square (or Battery Park or Broadway or Wall Street or some other place) to meet up. It will ultimately depend on your shared understanding of each other and assumptions about each other’s behavior (for more detail, see Schelling’s original paper Bargaining, Communication, and Limited War).
I fear, and I think this fear is legitimate, that if people with drastically different Schelling points encounter each other, it could potentially lead to conflict, some of which may indeed be violent. This problem may be solved by a gradual path to increased immigration (and, perhaps, I should rethink my own position given in the disclaimer below). But I think the issue still needs to be considered and discussed.
*Full disclosure: I’m a “throw open the borders” guy.
David Henderson
Mar 7 2019 at 1:24pm
You write:
Thanks, Jon.
You wrote:
I have that concern too, though moderate. That’s part of why I advocate baby steps.
You wrote:
I get such a kick out of this. My generation’s typical example (and I think Schelling’s), when I learned about this from David Friedman in the mid-1970s, was that you don’t know the time or place and so you choose Grand Central Station below the major clock at noon. For your generation, a train station wouldn’t even occur to you. 🙂 Note to self: Revise my Schelling point strategy.
Jon Murphy
Mar 7 2019 at 2:00pm
I was lecturing on this in class the other day and a student asked: “why couldn’t they just text each other?”
David Henderson
Mar 8 2019 at 10:18am
Good one.
I know what I would say to him/her, though: Assume you’ve misplaced your phone.
Thaomas
Mar 11 2019 at 8:30am
I am much more optimistic about immigrants, even those who arrive with limited English and low skills assimilating. And how welcoming or how hostile we are to immigrants is itself a factor in how easily they can assimilate. Nevertheless, I think we should shift our immigration policy from “who to exclude” to “who to recruit.”
Jon Murphy
Mar 11 2019 at 9:45am
Agreed 100%. Sometimes people will point to issues in Europe on why immigration is problematic, and while there is some legitimacy there, we also need to look at the institutional arrangements. Requirements to get jobs in many European countries are very stringent and difficult for non-EU citizens to overcome (my old company attempted to open an office in the EU and we had the Devil’s own time going through it). It’s no wonder assimilation is difficult when a person cannot get a job.
Thaomas
Mar 12 2019 at 8:26am
Agree with that point although I had in mind that the American attitude toward immigrants has typically been that they would assimilate whereas, supposedly, the European attitude was more “multicultural.”
Conscience of a Citizen
Mar 8 2019 at 1:31am
In thirty or forty years your young poor immigrants will be too old and worn out to work. Their wages will fall to zero just as their medical bills skyrocket (<a href=”https://marginalrevolution.com/marginalrevolution/2013/05/do-low-wages-for-unskilled-workers-weaken-the-case-for-more-immigration.html#blog-comment-157799362″>even working poor immigrants earn less in a lifetime than their medical care costs the taxpayers</a>). Those superannuated immigrants will have children, though, who will keep you from deporting their parents and will vote enthusiastically for subsidies to them.
Taxpayers lose money on every poor immigrant, and cannot make it up on volume. Delaying the bill while young immigrants slowly turn into elderly immigrants is just a form of deficit spending. Society may enjoy the short term, what with all the cheap waiters and janitors, but will suffer horribly later. (And since medical spending growth has outpaced wage growth since the late 1960’s, there is no reason to think the money to support elderly immigrants will just fall from the sky.)
Jon Murphy
Mar 8 2019 at 8:35am
This argument is not unique to immigration, however. The exact same line of reasoning can be used for natives, too.
But there’s a bigger issue with your implicit assumption that immigrants only use taxpayer-funded medical services and that they do not save. There’s no particular reason to suspect that is the case. All kinds of alternatives exist.
Thaomas
Mar 11 2019 at 8:21am
This is a general problem that we finance SS and Medicare/Medicaid wrongly. These should not be financed with a wage tax, but with a consumption tax like a VAT that is less prone to demographic changes.
Warren Platts
Mar 10 2019 at 4:42pm
I am all for increasing immigration. We should allow 2 million per year, with the only qualification that they have at least a bachelor’s degree from a decent school. That will give the elite class in this country a badly needed, 1st-hand lesson in the law of supply & demand.
Currently, the unemployment rate for college graduates is 2%, whereas for high school dropouts, it is more like 6 or 8 percent. Therefore, if we have a labor shortage, it is for people with college degrees–not unskilled labor. If anyone needs their wages lowered, it is the elite class in this country.
Thaomas
Mar 12 2019 at 8:21am
That would be good but should also apply to “green card on graduation” from a US school as well as virtually unlimited employer sponsored immigration. (If limited, slots could be auctioned.) However just because the net benefits of greater immigration are greater for high skilled (and “skill-able”) workers, does not mean that the there are not net benefits for lower skilled workers. The English language requirement would probable act as an admittedly imperfect self selection filter for other desirable qualities.
Warren Platts
Mar 12 2019 at 4:31pm
There are not benefits for immigrants who are lower skilled workers. But for native-born high school dropouts, there are only net losses.
David Henderson
Mar 13 2019 at 11:08am
Warren,
Your proposal is not my ideal, but I would take it over what we have now.
Comments are closed.