Schansberg: Thoughts on Immigration

May 17, 2018

by Eric Schansberg, Ph.D.

In some ways, immigration is not all that difficult to analyze. The first key is an opening concept from the first course in Microeconomics. When immigrants come here to buy and sell, to work for employers and own businesses, to borrow and invest, and so on, they engage in a wide variety of voluntary, mutually beneficial trades that are good for them and good for society.

Of course, there’s more to life than economics. For example, we want immigrants to be good citizens too —no crime, terrorism, etc. Or if we’re concerned about language and culture, we can look at the assimilation of the first, second and third-generation immigrants along with policy and civil society’s efforts to make this easier. Is America more like a melting pot or a wild salad?

In contrast, when immigrants come here and stay on welfare, then monies are taken from taxpayers and given to immigrants. Government coercion replaces voluntary activity — and one party now benefits at the expense of another.

This is a net drain on society in efficiency terms. Of course, there’s more to life than efficiency. (But we shouldn’t imagine that inefficiency is efficient either.) Maybe we should help (some) immigrants even when they’re a drain on the economy — political refugees, for example.

But did you catch that all of the above can be said about natives as well? Are we productive or not? Are we good citizens or not? Are we a drain on society? The issue isn’t really immigrants versus natives. Besides, we’re all immigrants or descendants of immigrants. Really, the question is whether any given person is a productive member of society.

Another issue is the extent to which immigrants provide competition in certain labor markets. If we allow a bunch of foreign economists to come into the country, this is good for the country, but tougher on me. If we get more foreign doctors, then health care costs would be reduced, but doctors would face more competition. If we permit more unskilled labor to immigrate into America, then it becomes more difficult for natives to make a living if they have fewer skills.

Such immigrants are good for the country as a whole, but the increased competition can make things more difficult for certain workers. Even so, working immigrants are good for consumers and the economy overall. They help to lower costs and thus prices. They provide more choices in goods and services. And their penchant for hard work and entrepreneurship is a welcome addition to economy and society.

As we come to a season of high school graduations, here’s a useful way to think about immigration: It’s akin to the difference between accepting versus deporting the Class of 2018. Sending these graduates away would have some obvious benefits — in particular, less labor market competition and the ability to get rid of a few deadbeats.

But on net, even with some yahoos and sluggards in this year’s graduating class, on net, it’s lovely that they join us in the workplace and in society.

Congratulations to the Class of 2018 and welcome to adulthood.

D. Eric Schansberg, Ph.D., an adjunct scholar of the Indiana Policy Review Foundation, is a professor of economics at Indiana University Southeast in New Albany. He is the author of “Turn Neither to the Right nor to the Left: A Thinking Christian’s Guide to Politics and Public Policy.”


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