09/24/2009
Hat Tip, 24ahead.com for Federal Reserve to unemployed millions: massive immigration is great for you (Tobias Madden)Tobias Madden — a Regional Economist for the Federal Reserve in Minneapolis — offers an "Economic Myth Busters" sales job asking, ’should policymakers curb immigration to “protect American jobs”?' (minneapolisfed.org/publications_papers/pub_display.cfm?id=4277)In a nutshell, no. This myth stems from the idea that the number of jobs in America is fixed, and every job taken by an immigrant reduces the total number of available jobs, always to the detriment of native-born workers. This overlooks some valuable economic contributions from immigration on both the supply of and demand for labor.
24ahead comments:
If, say, there were a million fewer low-wage illegal aliens in the U.S. their absence would reduce spending, but at the same time Americans would be able to step in and take the jobs they're doing. That would also have many other benefits, such as reducing the power inside the U.S. of the Mexican government, striking back at attempts to gain race-based power, minimizing the dependence of able-bodied workers on government assistance, encouraging innovation (such as agricultural machinery)…
From the other side of the ledger, the most Madden can point to is this:In 1997 the National Research Council estimated that immigrant labor conferred net benefits of anywhere from $1 billion to $10 billion per year on the native-born population.
Nowadays, $10 billion is almost nothing; Obama probably spent a couple billion before lunch. So, the question becomes, why is the Federal Reserve promoting things like this rather than promoting reducing immigration…?
Good question, 24ahead.
(About the NRC study, Peter Brimelow has written:
When I was researching my book Alien Nation: Common Sense About America’s Immigration Disaster, I was amazed to discover that the consensus among labor economists was that native-born Americans did not benefit at all, in aggregate, from the immigrant presence in their midst … .Since then, this finding has been confirmed by the National Research Council’s 1997 report "The New Americans". Indeed, NRC studies showed that taxpayers in immigration-impacted states were actually subsidizing the immigrant presence — at an annual net rate of over a thousand dollars per native-born family in California. )
The Madden note is an astonishingly shoddy piece of work, even by Barbara Ehrenreich standards, and appears uninformed on the current state of the technical literature. It is a disgrace to the Minneapolis Fed.
But the primary debating sophism it uses is one of which patriots should be aware.
From the point of view of the H1-B victim or undercut meatpacker, immigrants have taken his job. However, brutal economic reality is likely to force these victims to accept unattractive employment of some sort or another, which enables unscrupulous immigration enthusiasts to claim that total employment grows.
For that reason, it is the effect of mass immigration on real wages which is the backbone of the patriot case. Madden ducks this:
The increase in regional labor may also drive wages down by a marginal amount…
The secondary issue is the redistribution effect — away from labor, to capital, and from unskilled/manual to skilled/professional. Madden deals with this by not thinking about it.
the positive immigration effect on wages of U.S.-born workers with at least a high school degree offsets the small negative effect on wages of U.S.-born workers with no high school degree.
Of course, if it is your family which is suffering because mass immigration has wrecked your ability to provide, the news that there offsets in the aggregate is no comfort.
All in all, a dollop of propaganda masquerading as professional economic analysis. (Tellingly, Madden cites no opposing studies.)
The Minneapolis Fed has the cowardly policy of withholding email addresses. Their contact form is here. Tobias Madden, however, is still working to complete his PhD thesis. Complain to him at his University of Minnesota location here.
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