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Averages Can Mislead

Here’s a letter to the Wall Street Journal:


Donald Luskin argues compellingly that the recent influx of immigrants is buoying the U.S. economy (“Open Borders Produced the Biden Economic Boom,” May 24). But his case is even stronger than he supposes. He’s not quite correct to write that “it is likely the case that the new foreign-born adults are diluting the productivity of the U.S. economy by arriving with few skills and with language and education deficits.”

The addition to the labor force of a worker whose skills are below average ‘dilutes’ the economy’s productivity only in the same way that the arrival of an infant child into a family ‘dilutes’ the height of the family members. What is ‘diluted’ is only the family’s average height; the infant’s arrival causes no individual’s height to fall. Mom and dad don’t shrink and big sister continues to grow. The family’s total height increases.

And so it is with the arrival of lower-skilled workers. They do pull down average worker productivity, but this statistical reality does not imply that the productivity of existing workers or of the U.S. economy falls. Indeed, by complementing existing workers, more low-skilled workers can raise the productivity of their higher-skilled counterparts, and of the economy at large, even as the measured average worker productivity declines.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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