Immigration: "truths" and fictions

Some fishy logic on immigration today from the Washington Post's Robert Samuelson. According to him, none of the many sides in the present immigration free-for-all is addressing the basic "truths" of the issue - namely, the relationship between a rising tide of illegal immigrants and the impending retirement of the Baby Boomers.

Samuelson believes that low-wage illegal immigrants will put further strain on our public finances because they receive more in government services than they pay in taxes. He quotes University of Illinois economist Barry Chiswick:

'[Illegal immigrants'] presence in the labor market increases competition for low-skilled jobs, reducing the earnings of low-skilled native-born workers. . . Because of their low earnings, low-skilled immigrants also tend to pay less in taxes than they receive in public benefits, such as income transfers (e.g., the earned income tax credit, food stamps), public schooling for their children, and publicly provided medical services. Thus while the presence of low-skilled immigrant workers may raise the profits of their employers, they tend to have a negative effect on the well-being of the low-skilled native-born population, and on the native economy as a whole.'

With all due respect (Chiswick is a respected economist and I'm not even a grad student yet), this doesn't quite add up. If the presence of illegals raises the profits of the firms that employ them, then doesn't that at least have the potential to increase government revenues? Profits are taxed twice (once at the corporate level and then once at the personal level), and they mostly go to rich people, who pay higher tax rates. So isn't it at least theoretically possible that illegals will (indirectly) put more money into government coffers than they take out? Chiswick doesn't address this possibility.

When we're talking about the Baby Boomers' retirement, we're talking about the problem of our aging society. Americans aren't having enough babies to keep the entitlement system fully funded. But Mexican immigrants have a lot of babies. In fact, Mexican-Americans are a big part of the reason that the U.S.' total fertility rate hasn't fallen below replacement levels (unlike Japan, Korea, China, and most of Europe). In other words, if Mexican-Americans don't pay the taxes needed to support the retiring Boomers...who will pay them?

Samuelson's answer is: better-educated, high-skill, smarter immigrants. He notes:

Immigrants are not all the same. An engineer making $75,000 annually contributes more to the American economy and society than a $20,000 laborer. On average, the engineer will assimilate more easily.

He's right on both counts, actually. I agree that it would be a great idea to let in a lot more high-skilled immigrants than we're letting in - especially from India and East Asia - and to give them citizenship faster than they get it now.

But if you regard smart immigrants as a "third way," take caution: even if we could find 500,000 bright well-educated young engineers per year (that being the number of illegals currently entering the country), and even if our labor market could absorb that number, it would still push down the wages of high-skilled workers, just as illegals push down the wages of the poor. Switching poor immigrants for high-skilled ones won't take immigration off the front pages.

And keep in mind that well-educated Asians and Europeans don't have as many kids as poor Mexicans, so replacing illegals with engineers would lower our total fertility rates, bringing closer the day of reckoning for the entitlement system.

I'm not saying we shouldn't take in a huge number of talented smart high-skilled immigrants - I think we absolutely should - but I think that doing so won't remove the need for us to keep admitting the tired, hungry, and poor.

Samuelson sticks in a word or two about the social costs of immigration, claming that Mexican immigrants aren't assimilating as fast as we'd like:

How fast can [Mexican immigrants] assimilate? We cannot know, but we can consult history. It is sobering. In 1972 Hispanics were 5 percent of the U.S. population and their median household income was 74 percent of that of non-Hispanic white households. In 2004 Hispanics were 14 percent of the population, and their median household income was 70 percent of the level of non-Hispanic whites. These numbers suggest that rapid immigration of low-skilled workers and rapid assimilation are at odds.

Hey Samuelson: that 74%-to-70% figure doesn't say anything about how long it takes for Mexican immigrants to assimilate. The decrease could be (and probably is) due to the big increase in Mexican immigration since 1972. Since a smaller number of Mexican immigrants was here in the 1970s, those immigrants and their children could have gotten much wealthier even as the big influx of immigrants in the 1990s brought the average down.

Assimilation is the most important aspect of immigration, because if assimilation breaks down (as it has in France), social catastrophe can result. The ability to absorb immigrants and make them Americans is our most fundamental strength as a nation - it is what will, in the long run, allow us to overtake every other nation on the planet (including China).

And if you check the evidence on Hispanice assimilation, you'll see that it's not doomsday at all - Hispanics are assimilating at a pretty rapid clip. Legals assimilate faster than illegals (who can't venture into the English-speaking world for fear of getting caught), which is why I support turning illegals into legals. Believe it or not, I support the Bush plan (except for that useless National Guard part).

Robert Samuelson is looking hard for a reason to be afraid of immigration. But, Samuelson's fuzzy logic aside, there really aren't any good ones (unless, like Fox News anchor John Gibson, you're a racial nativist). We can employ large numbers of both poor and high-skilled immigrants, and we can assimilate them too. Our economy and our nation will be all the stronger for it.