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More on Immigration

The usually astute Robert Samuelson stumbled today as he discussed immigration. According to Samuelson:

Immigration needs to be controlled, not because it’s bad but because without controls it won’t succeed. The country can’t absorb unlimited numbers of poor, unskilled immigrants.

The second of these two sentences nicely summarizes prevailing misconceptions about immigration.

First note the word “absorb.” This word likens the U.S. economy to a sponge. It’s a poor metaphor. Unlike water absorbed into a sponge, new people entering an economy enlarge that economy’s capacity. A deeper, more finely grained, and more extensive division of labor is the result, raising productivity and increasing opportunities. Also increased is that economy’s diversification and dynamism.

And contrary to Samuelson’s implication, there’s no reason to suppose that the American economy today cannot handle large numbers of immigrants even more successfully than it did until the late 19th century. In almost all relevant respects, America today is less crowded than it was at any time in her history. See my earlier post explaining why America’s ability to “absorb” immigrants today is probably at an all-time high.

Note also Samuelson’s use of the phrase “unlimited numbers of poor, unskilled immigrants.” Samuelson here, no doubt, imagines what many people who fear immigration imagine – namely, that returning to the almost-open-borders regime that we had a century ago would result in hordes of foreigners flocking to America.

Such imaginings are economically unsound. Market prices and pressures will govern international immigration just as they govern intra-U.S. immigration – just as they govern so many aspects of our lives.

Consider California. It is completely open to people from Mississippi. California’s median household income is a whopping 54% higher than is Mississippi’s. (See here.) Californians enjoy environmental and social amenities – beautiful beaches, snow-capped mountains, fabulous weather, big and exciting cities, professional sports franchises – that Mississippians lack. And yet, despite being free to move to California en masse, Mississippians don’t do so. Nor do West Virginians, or Arkansans, or Alabamians.

The reason is that prices and other economic data govern immigration. Most significantly, immigrants must rent or buy living quarters, and each must find remunerative employment (or live with family members). As demand for living quarters increases, rents and real-estate prices rise – putting a natural economic (and non-coercive) break on immigration. Likewise with job opportunities: if the supply of labor rises and thereby lowers employee pay in those jobs experiencing especially rapid increases in labor supply, the urge to immigrate will be dampened.

The private economy brims with institutions and feed-back loops that ensure against long-term overcrowding, excessive consumption, excessive production, and other problems that bother some of our minds.