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Two Immigrants Debate Immigration

Friday, November 25, 2016 10:25
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Even as the mighty Statue of Liberty beckons the world’s “poor and huddled masses” to America’s shores, Americans themselves have been ambivalent, to put it mildly, about how many newcomers ought to be welcomed and from where. To the extent that a pro-immigration consensus has existed, it was always an uneasy one. But Donald Trump’s meteoric political rise after embracing an extreme restrictionist agenda has shattered that fragile status quo, dividing pundits and public, academics and analysts throughout the 2016 election season. There’s an absence of good polling data to shine a light on how immigrants themselves feel about this issue, but it’s clear that even they don’t all agree.

George J. Borjas is a celebrated Harvard University economist who emigrated from Cuba to the United States with his mother at the age of 12, three years after Fidel Castro’s regime took over the country and confiscated his father’s garment factory. He has made vital contributions to many fields of economics, especially immigration, and has a new book, We Wanted Workers: Unraveling the Immigration Narrative, out this month. In it, he challenges the notion that immigration is “universally beneficial.”

Shikha Dalmia is a Reason Foundation analyst and a native of New Delhi, India, who came to America 31 years ago as an idealistic student looking to escape the corruption of a socialistic mixed economy. She writes extensively about immigration and firmly believes America shuts the door on outsiders at its economic and spiritual peril.

What follows is a spirited exchange between the two on the empirical claims and proposed policy prescriptions in We Wanted Workers.

Dear Professor Borjas:
Let me congratulate you on a book that is a model of clarity. We Wanted Workers systematically walks readers through the immigration literature. Along the way, it offers a sense of the immensely knotty methodological problems that bedevil the dismal science. Also, I agree completely that the “overreliance on economic modeling and statistical findings” on this subject is a regrettable development that fosters the notion that “purely technocratic determinations of public policy” are possible. In fact, the scientific hubris underlying such efforts prevents a full airing of the normative and ideological commitments that ultimately do—and perhaps should—guide policy.

That said, the more I read, the more despondent I got. The publisher’s teaser promises that the book “takes a fresh and thought-provoking new look” that parses the claims on the “two extreme poles” of those calling for “tougher laws…in a racially tinged discourse” on one end and those pushing for “more open policies” on the other. But the book focused almost exclusively on the second target while largely ignoring the first, even when its own facts warranted a smackdown.

You point out that the pro-immigration camp’s claims that America is a magnet for the “best and brightest” are overblown because which foreigners—high-skilled or low-skilled—make a beeline for America depends on how well their skills are rewarded in their own country. Highly egalitarian countries such as Denmark lose their highly skilled workers because, relative to less-skilled counterparts, their labor is rewarded less well, whereas the reverse is the case in highly inegalitarian countries such as Mexico. That’s an interesting thesis, but it doesn’t explain India, my native country, which has extreme inequality and is among the biggest “donors” of high-skilled talent. It was odd that you shoehorned India into the same category as Canada and Australia as a country with “less inequality.”

But America’s genius is not that it draws the best people but that it draws out the best from people, which is why even the world’s “wretched” manage to make something of themselves here. Indeed, the essential thing for “success” is not a college degree but drive, which those with the cojones to uproot themselves and make the difficult schlep to a foreign land have in spades. This process of self-selection has served America—and immigrants—so well that even the restrictionist lobby hasn’t questioned it. But you devote a whole chapter to lamenting the forces of “self-selection” that thwart Uncle Sam’s efforts to ensure that immigrants who come to America are “exactly the types the country is looking for.” Putting more faith in government over markets to properly regulate labor flows isn’t very American!

But even if one accepts that the “best and brightest” trope is oversimplified, it’s at least partly true. Not so with the poisonous myths of the restrictionist right about anchor babies and chain migration. These things occur, but are hardly widespread phenomena. Consider chain migration. Restrictionists allege that letting immigrants sponsor non-nuclear family members sets off a chain reaction as immigrants sponsor their relatives to come to America who sponsor more relatives…until entire Third World villages are emptied into America! But the only “non-nuclear” relatives that citizens or permanent residents are allowed to sponsor are siblings. What’s more, there is a strict annual national quota on the number that can be admitted from each country. This produces long wait times that currently touch 23 years for siblings of Filipino immigrants, making widespread chain migration a virtual impossibility. You acknowledge all these facts but never connect the dots to say as much. There are many such omissions.

We Wanted Workers confirms the hardline restrictionist narrative that low-skilled immigrants don’t assimilate economically, meaning that their wages lag behind other groups. I appreciate that you blame this not on their ethnicity, as is the wont of the racist restrictionists, but on their entering skill levels, which track the nations they come from. Comparing German and Mexican immigrants, you note that the 30 percent wage gap that existed between them in 1920 had narrowed to 10 percent in 2000, lamenting that the melting pot worked but took close to 100 years. My initial reaction to this was “So what—so long as these groups are making progress relative to their own aspirations?” But to truly know how well the melting pot is melting, we need to compare not various immigrant groups to each other, but immigrant groups relative to natives in the same socio-economic strata. In other words, how do the children and grandchildren of Mexican drywall hangers compare with those of Americans doing similar jobs? If Mexican grandchildren own mid-sized construction companies and American ones remain drywall hangers, surely that would better indicate how rapidly immigrants assimilate.

You question not just the impact of low skilled immigrants on American wages and jobs but also, astonishingly, the high-skilled immigrants that most accept as positive. You say that your fellow economists exaggerate that economic migrants are complements to—rather than substitutes for—American workers and therefore underestimate the downward pressure on native employment and wages. Moreover, you believe that low-skilled immigrants have negative productivity spillover effects—meaning that their habits depress the productivity of the overall economy, not enhance it—while high-skilled immigrants have positive productivity effects, but they are too small to offset their other negative economic impacts on natives.

I will let the experts parse the controversial methodology underlying these claims and simply take them at face value for now. With respect to low-skilled immigrants, the very worst long-term consequence you identify is a 3.1 percent reduction in the wages of native high school dropouts, a vanishing subset of the population. So even if you are right that immigration enthusiasts overstate their claims, isn’t this a pretty small downside? No policy has zero losers, after all. The question is whether the wins outweigh the losses.

But it was your discussion about high-skilled immigration that was truly eye-popping. You insist that high-skilled natives are vulnerable to “supply shocks” just like their low-skilled counterparts and explain how an influx of Russian math Ph.D.s drove American math Ph.D.s to pursue different careers. But it is not clear why pushing natives into areas where they can better compete is a bad thing. This may be acceptable, you claim, if these immigrants triggered big productivity gains and, stunningly, offer the example of Albert Einstein to show that’s not the case. His dismissal, along with other Jewish physicists from Nazi Germany, you say, did not lower the publication rate of their German departments “at all”—and, presumably, by corollary didn’t boost the rate of their new American departments.

But if this example reveals anything it is the glaring inadequacy of your “publication” metric that couldn’t capture the contributions of an incandescent genius who changed the trajectory of human history, making America the formidable giant in theoretical science. (Same with his Princeton colleague, the math genius Kurt Gödel, an Austrian immigrant.) Surely, if we are going to question anything, it is your instrument rather than the contributions of such immigrants? You say that the cardinal mistake of the pro-immigration camp is that it treats immigrants like widgets rather than people whose personal baggage negatively affects the institutions of their adopted country. But certainly such petty bean counting so devoid of qualitative dimensions is also guilty of this mistake?

Your most scathing observation is that immigration, not counting the fiscal costs on schools, welfare, and other government programs, produces a $50 billion economic surplus, but that this essentially benefits employers, the users of immigrants—not American workers, the competitors of immigrants. In essence, you state, this implies a “redistribution of half-a-trillion dollars from workers to firms.” But if that’s the case, then every search for efficiency—every groundbreaking innovation, every new trade deal, every revolutionary technology—that disrupts existing employment patterns is tantamount to the redistribution of wealth from labor to capital. If so, your quarrel isn’t with immigration but with the market economy.

Based on this downbeat assessment, you endorse a sweeping restrictionist agenda that opposes legalization of the undocumented population unless we’ve “regained control of the border,” and you advocate serious penalties on employers who hire undocumented workers and an E-Verify mandate on employers. Not surprisingly, you don’t entertain an end to the current regime of labor prohibitionism against low-skilled workers by reviving the Bracero guest worker program with Mexico, the only effective way of stanching the future flow of illegal immigrants. And far from expanding the visa quotas for high-skilled workers, despite industry pleading, you want to jack up the fees for H-1Bs.

To your credit, you openly acknowledge that a “massive new government” will be required to “supervise a massive wealth redistribution”—and, I might add, disrupt the natural pattern of human mobility that would emerge if Americans and foreigners were left relatively unfettered to associate with each other according to their preferences.

To put my ideological commitments on the table, in my mind such draconian curbs on individual liberty are justified only when there are worse harms to be mitigated. But even if all the harms you list were correct, that won’t add up to the level of those that an overweening government might cause to get the “correct” distribution of income. So my question to you is: What role, if any, does the need to protect individual liberty, mobility rights, and freedom of association play in your thinking on immigration policy?

Yours sincerely,
Shikha

Dear Shikha,
I am pleased you found the book valuable and accessible. Let me try to respond by addressing some of the questions you raise and raising some of my own.

You claim that I devote a disproportionate amount of time to debunking the claims of immigration enthusiasts, but much less to debunking restrictionists. I want to address this point head on, as I truly tried to expose myths regardless of their source. For instance, I thought I gave equal time to dismissing the polar claims that immigrants are the “best and the brightest” or “the wretched refuse of those teeming shores.” As I write in the book: “There has been an enduring interest in how immigrants are self-selected, and it is customary to pick one of two extremes when describing the selection…I find these types of ideologically motivated assumptions and platitudes thoroughly unconvincing.”

A little intellectual history may help. I began to think about immigrant selection in 1985, a time when immigration was far removed from the center of social policy concerns. So my interest had nothing to do with policy. It reflected my curiosity about a technical question: What does economics have to say about the self-selection of immigrants? If people move from place to place in search of higher incomes, which types of people—the “best and brightest” or the “wretched refuse”—find it worthwhile to pick up and move? That question had a surprising answer: It depends on whether the U.S. offers higher rewards for skills than the sending countries. If we do, we attract the best and the brightest. If we don’t, we won’t.

Pretty obvious, right? But my question had nothing to do with ideology. And this is one way in which you and I differ. You seem to interpret models and results through an ideological filter. Each “factoid” in the book is judged according to how it fits a preconceived notion of how the world should work. I read the same factoids and I think about the underlying economic question: What is driving the market to reach such an outcome?

There may be another reason why you get the feeling that I leave the restrictionists alone. You note that I avoided talking about “the poisonous myths of the restrictionist right about anchor babies and chain migration. No doubt these alleged problems occur, but they are hardly widespread phenomena.”

There is a very simple reason for why only some issues ended up in the book. Those are the questions that have preoccupied economists over the past few decades. There have been remarkably few studies—and no single study that someone who is not an immigration specialist would find worth reading—of anchor babies and chain migration.

It is not that these other issues are not important. But they may not be sufficiently attractive to an economist wishing to write a paper that can propel a career forward, or they cannot be framed in a simple way, or the data are really bad. Economists are rational human beings too. They will pursue topics that offer the greatest opportunity for professional gains. A fair portrayal of the topics that ended up in the book is that they cover those issues that were of major concern to economists and that led to major advances in our understanding.

Let me now address the wage impact of immigration. This is not the place to go into the many technical details that confound consumers of this very technical literature. But you say something that resonates (and not in a good way): “The very worst long-term consequence of immigration that you identify is a 3.1 percent reduction in the wages of high school dropouts…Even if you are right that immigration enthusiasts have overstated their claims that immigration generates no losers at all, isn’t this a pretty small downside?”

You are referring to my conclusion that the earnings of high school dropouts fell by 3 to 6 percent because of immigration. I specifically address the issue you raise in the book: “The economic, social, and political consequences of pursuing policies that harm the most disadvantaged Americans are ignored at our peril.” Just look at our current political landscape. I think it is extremely shortsighted to dismiss the impact on low-skill workers by arguing that few workers are affected in this fashion or that the effect is small. The typical male high school dropout earns $29,000 annually. A policy-mandated pay cut of $900 to $1,700 is not trivial, and it suggests that the policy makers perhaps have their priorities all wrong.

You raise an important point about the small $50 billion immigration surplus that the textbook economic model produces, and the huge $500 billion redistribution that goes alongside it, asking whether perhaps my “quarrel isn’t with immigration, but the market economy.”

I have no “quarrel” with a market economy. My argument is instead that a candid appraisal should not sweep the distributional effects of immigration under the rug. And it should incorporate the insight embodied in Max Frisch’s observation about the guest workers that Germany admitted back in the 1960s: “We wanted workers, but we got people instead.” Immigrants are more than the robotic workers that populate the models used in the “search for efficiency.” And that fact generates additional wrinkles. For instance, the evidence already suggests that the $50 billion surplus disappears entirely if we account for the fiscal burden imposed by immigration. In other words, a fuller appraisal might have to recognize that, in the end, immigration is just another government redistribution program.

Admirably, you affirm where you are coming from when it comes to immigration restrictions: “In my mind such draconian curbs on individual liberty are justified only when there are worse harms to be mitigated.” You then ask me where I stand: “What role, if any, does the need to protect individual liberty, mobility rights, and freedom of association play in your thinking on immigration policy?”

My answer will surely shock you, but I have never devoted much time to thinking about that. My research was never motivated or influenced by what I thought about individual liberty or the rights of people to live anywhere they want. My personal experience with Communist indoctrination when I was 10 and 11 years old left me very wary of thinking about anything in ideological terms.

Your question is more specific, however. How do these tenets of libertarianism affect my thinking about immigration policy? And my answer, again, will shock you. They don’t enter my thinking at all. I myself would not trust my moralizing about what is right and what is wrong. As much as I wish I were a perfect human being with pure motivations and in possession of all the answers, I know I am not.

I tend to see both sides of the coin in everything. Wouldn’t it be wonderful if we inhabited a world where everybody could move to where they wanted and lead happy and productive lives? But if a billion immigrants from the developing world were to enter Europe and North America, the developed world would surely change. And anyone with any common sense knows that some of those changes would not be to the good.

Immigration creates winners and losers, Shikha, and the net gain may not be as large as some had hoped. I hope that We Wanted Workers has at least given you some food for thought regarding that possibility. So any discussion of immigration policy has to contrast the gains accruing to the winners with the losses suffered by the losers. Who are you rooting for?

And if your answer is that you stand firmly behind the lofty axioms of mobility rights and freedom of association, then do not act surprised when the losers in that New World Order wake up, realize that the narrative is a crock, and revolt.

Best regards,
George

Dear Professor Borjas:
Thank you for your clear and candid response—and let me return the favor by being equally clear and candid. You say you strove to debunk both sides. But you didn’t fully succeed, in my view. And perhaps that’s because even a pre-eminent and empirically driven economist such as yourself ultimately isn’t free from normative assumptions. “Preconceived notions of how the world works” inevitably seep into one’s work. You can choose them consciously, or you can absorb them subconsciously from the broader zeitgeist. If you had no moral assumptions, how would you know whom to “root for”?

You acknowledge that you stayed away from addressing poisonous restrictionist myths, noting that there isn’t enough of a professional upside to addressing them. I certainly understand the need for beginning scholars to focus on professionally sexy research topics. But you are an established figure who published a “popular” book with a commercial press, in the middle of an election cycle in which one presidential candidate is trying to ride such myths to the White House. Surely, you could afford to direct some of your considerable professional status and firepower to straightening that side of the ledger too?

Both you and I are wary of economic models. Despite my pro-immigration proclivities, you could persuade me that models showing that John Lennon’s utopia, where a borderless world would lead to a $40 trillion increase in the global gross domestic product, is overstated. One reason, as you note, is that they ignore all the transaction, transportation, psychic, and other costs of emigrating and assume that all workers who could boost their wages by moving would do so. That’s not the case. You point out that America has no border restrictions with Puerto Rico, whose construction workers alone could double their wages by buying a “one-way plane ticket that costs a fraction of a week’s salary.” Yet “two-thirds of Puerto Ricans have chosen not to move” (your emphasis). This same fact can be used to undercut restrictionist claims that looser borders would instantly flood America. Yet you not just fail to note this but repeat it in your response.

“Preconceived notions” influence not just the conclusions you draw but also the questions you ask. You posit the existing distribution of wealth as the desirable state of affairs and brand a policy that disrupts it as “redistribution”—hardly a morally neutral term. Furthermore, you play up the long-term harm that immigration causes high-school dropouts. But that is the least persuasive part of your analysis precisely because it treats these workers like non-volitional “widgets,” incapable of changing their behavior to minimize the direct harm from immigration (by acquiring new skills) or taking advantage of the new opportunities (by exploiting their linguistic edge) it opens up. But even if you were right about the harm immigration causes them, arguably they may suffer more harm if businesses that can’t import workers choose to export or automate away more jobs in order to remain globally competitive.

Lastly, when I asked you what role liberty plays in your thinking, I was referring to your policy prescriptions, not your research. That’s because one’s conclusions don’t flow automatically from one’s findings. Even if your findings about the economic harms of immigration were indisputable, which they are not, they may not add up to a case for restrictionism any more than the harms from free speech would add up to a case for scrapping the First Amendment. The draconian government policies that restrictionism entails—and you endorse—might be even more harmful than immigration for a nation with a bedrock commitment to individual rights and limited government. That liberty was no part of the color mix of your normative palette wasn’t shocking, but it did leave me thinking that your immigration picture was too dark and distorted.

Yours sincerely,
Shikha

Dear Shikha,
I have truly enjoyed having this exchange. It is invigorating to discuss what it all means with someone from your ideological perspective who is able to extract and enunciate the core issues in such a clear and striking fashion. Let me clarify some relatively minor points before I conclude with the big picture.

One perhaps not-so-minor point is your claim that: “You acknowledge that you stayed away from addressing poisonous restrictionist myths, noting that there isn’t enough of a professional upside to addressing them.” I acknowledged no such thing. Perhaps my phrasing wasn’t sufficiently clear, so let me be as clear as I can be now. We Wanted Workers focuses on issues that attracted professional interest (my own, as well as that of others) in the past three decades. Perhaps those select issues tend to fall on one side of the ideological divide rather than the other, but the ideological implications of any particular issue had nothing to do with whether they are discussed and “unraveled” in the book.

If you contrast the topics I cover with the topics covered in two National Academy reports (the one published in 1997, and the one to be published in September 2016), you will find an awful lot of overlap. And that is because it is hard to thoroughly survey topics—regardless of where they fall on the ideological spectrum—that have not been thought through carefully by many researchers before. What I do concede is that I stayed away from many topics throughout my career, including the chain migration issue that started this particular discussion. But the reason I stayed away from all those topics had nothing to do with ideology. There are only so many hours in a day and I wanted to have a family life. More often than not, I was simply not smart enough to be able to frame the problem in terms of an economic model I could easily manipulate, or I could not get access to data that would enable me to conduct a serious study of the issue.

You are not surprised that “liberty was no part of [my] color mix” as I spent all these years thinking about and doing research on immigration issues. There’s a sophomoric joke among economists that “we had our morals removed in graduate school,” and I plead guilty. My thinking has never been guided by deep philosophical thoughts—a bit ironic, in retrospect, as John Rawls lived a couple of doors down from me for many years. You’d think that if spillover effects really exist, something “in the air” would have rubbed off. But the way I’ve pursued my work just reflects my own somewhat geeky interests (I had to take two or three philosophy classes in college, and absolutely detested them), and not a “dark” desire to spin what I was trying to say one way or the other.

Which brings me to your description of the picture painted by the book as “dark.” This is precisely why I dislike ideological arguments. They demonize the other side in a clever and pithy way without really giving an understanding of why the picture might have turned out that way. I totally reject the notion that the book is “dark” in any way. I would argue instead that it is a pragmatic condensation of what we know about immigration. Reality has a way of looking very bleak to those wedded to a very narrow narrative. But facts don’t kneel to ideology.

And, finally, let me get to the elephant in the room. I ended my discussion in the first round by noting that “immigration creates winners and losers and the net gain may not be as large as some had hoped. So any discussion of immigration policy has to contrast the gains accruing to the winners with the losses suffered by the losers.” You did not address this very thorny issue in your response, so let me conclude by rephrasing it in even starker terms, as it isolates the problem at the core of our disagreement.

The evidence summarized in We Wanted Workers suggests that it is quite possible that the “efficiency gains” that receive so much emphasis in the libertarian narrative are totally offset by the costs associated with welfare expenditures or harmful productivity spillovers. As I said, it may well be that “immigration is just another government redistribution program.” My italicization of “just” was not a random click on my track pad. It was meant to drive home the point that there is a good chance that all that immigration does is redistribute wealth.

If there are no efficiency gains to be had, then espousing any specific immigration policy is nothing but a declaration that group x is preferred to group y. It is easy to avoid clarifying who you are rooting for by trying to reframe the debate in terms of amorphous philosophical ideals about mobility rights and the like. But this is where we go our separate ways. When push comes to shove, I will side with policies that improve the well-being of the American worker.

Best regards,
George

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