Workers Are People: The Economics of the Immigration Debate

DONALD TRUMP, SOON TO BE the leader of the free world, has called for “a total and complete shutdown of Muslims entering the United States.” Of Mexican immigrants, he has said, “They’re bringing drugs. They’re bringing crime. They’re rapists.” As part of his plan to put “America First,” he has claimed that foreign workers depress salaries, raise unemployment, and make it difficult for poor and working-class Americans to earn a middle-class wage. At a rally in Phoenix, Trump said, “The fundamental problem with the immigration system in our country is that it serves the needs of wealthy donors, political activists, and powerful, powerful politicians.” Although it remains unclear which of his campaign promises he will fulfill, he has proposed building a wall between the United States and Mexico, hiring 5,000 more Border Patrol agents, and deporting the country’s estimated 11 million undocumented immigrants. Similar sentiments abound in Europe, from French politician Marine Le Pen's declaration that she would “stop immigration both legal and illegal” to Nigel Farage’s exploitation of anti-immigrant feeling to rally support for the United Kingdom’s withdrawal from the European Union.

To listen to Trump or Farage, immigration brings nothing but ruin to countries and their citizens. But economists have come to the opposite conclusion: immigration benefits immigrants and the countries that welcome them. In September, the National Academy of Sciences released a 509–page report concluding that “Immigration is integral to the nation’s economic growth.” An increasingly vocal group of economists has gone so far as to advocate open borders, arguing that the unrestricted movement of people represents the single largest potential source of growth available today.

Amid this consensus, the loudest dissenting voice belongs to the Harvard economist George Borjas, whose latest book, We Wanted Workers, presents itself as “a refreshingly level-headed” exploration of the effects of immigration. Borjas embraces his role as outsider, endorsing the Oxford economist Paul Collier’s claim that “social scientists have strained every muscle to show that migration is good for everyone.” “I have long suspected that a lot of the research,” Borjas writes, “was ideologically motivated, and was being censored or filtered to spin the evidence in a way that would exaggerate the benefits from immigration and downplay the costs.”

As Trump assumes office, Republicans may turn to Borjas to provide intellectual support for a hardline immigration policy. Trump has already cited Borjas at least once, posting a link to one of Borjas’ articles on Facebook during the campaign and quoting a paragraph that expressed support for the “extreme vetting” of immigrants. But those who bother to read Borjas closely will find that he is not immune from the straining he claims to abhor. His own biases reveal themselves in the way he frames the debate — in the studies and sources he cites, the economic effects he highlights, and the cultural anxieties he stokes. Despite his insistence on the contrary, he is, ultimately, at least as ideological as those he seeks to discredit.

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On April 20, 1980, caving to domestic pressure, Cuban President Fidel Castro announced that Cubans wishing to move to the United States could leave freely from the port of Mariel, 25 miles west of Havana. By June 3, more than 100,000 Cubans had migrated, many settling permanently in Miami; in the space of a few weeks, they expanded the city’s workforce by eight percent.

Immigration economists could hardly have dreamed up a better natural experiment. By comparing Miami to American cities with fewer immigrants, they could isolate the effects of immigration on local workers. In a paper published in 1990, the economist David Card found that the increase in migrants barely affected native wages, establishing an academic consensus that held for the next two and a half decades. President Barack Obama’s Council of Economic Advisers would later cite the study in a 2014 report justifying Obama’s executive actions granting amnesty to millions of undocumented workers.

Last year, Borjas disputed Card’s finding. Most of the Marielitos had been high-school dropouts, so Borjas decided to look at the impact of their arrival on the wages of their immediate competitors: high-school dropouts in Miami. (Card, he notes, had not singled out this group for study.) He found that their wages dropped by at least 10 percent; immigration was not, he writes in We Wanted Workers, “good for everyone.”

To illustrate his point, Borjas relies on what he calls the “helicopter parable.” Imagine, he says, that a “very big” helicopter flies above the United States one night, traveling haphazardly until it stops at a random point in the sky, where it ejects a similarly random number of people to parachute into the towns below. Now, he says, imagine that you are one of the native workers in these towns. You wake up in the morning and notice that your city’s workforce has grown from one million to 1.1 million people. What happens next? Well, according to Borjas, a number of things could happen eventually — people might decide to move to other cities, for instance — but in the short run, more people will be competing for the same number of jobs. Employers will realize that they “can get away with paying a lower wage because many more workers are available.”

To Borjas, this conclusion should be obvious; it “is just a restatement of the laws of supply and demand,” he writes. As the supply of workers goes up, their price, or the wage that employers are willing to pay for their work, goes down. “If the supply of oil goes up, the price of gas goes down,” he writes. “But because of its political implications, the restatement of the same idea in the immigration context is widely contested.”

Of course, the helicopter parable depends on a key assumption: that the immigrants who have parachuted down in the middle of the night are perfect substitutes for the native workers they find on the ground — that is, that they have the same skills and are interested in performing the same jobs. Borjas admits that this will not always be the case. Some immigrants will be complements to native workers: they will take jobs that native workers won’t — mowing the lawn, perhaps, or cleaning houses — thereby freeing up natives to become more productive and earn higher wages. In reality, any influx of migrants is likely to include some substitutes and some complements; a wave of low-skilled migrants, for example, would substitute for low-skilled native workers while complementing high-skilled ones. But in the modern American context, Borjas claims, the substitution effect has won out: “low-skill workers have paid much of the bill for whatever gains have accrued elsewhere.” Whether Borjas is right on this matter may depend on how one defines a “low-skilled” worker: if the definition includes only high-school dropouts, then Borjas’s finding may hold — there is vigorous debate on the issue — but if it also includes high-school graduates, as other economists claim, the fall in wages disappears.

Borjas’s parable also falls prey to the “lump of labor” fallacy: the idea that there is a fixed amount of work in the world, so that an immigrant’s gain is necessarily a native worker’s loss. Expanding a city’s population from one million to 1.1 million people poses a problem for workers only if there are no more than one million jobs to go around. But immigrants are consumers as well as producers; not only do they increase the supply of workers competing for jobs, but they also increase the demand for goods and services, creating new jobs in the process. As the economist David Roodman has written, “they expand the economic pie even as they compete for a slice.”

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In the summer of 2011, in a paper in the Journal of Economic Perspectives, the economist Michael Clemens asked, “How large are the economic losses caused by barriers to emigration?” The same person will be vastly more productive — and could earn much more money — doing the same job in a developed country than in a developing one. Removing immigration barriers could therefore unlock vast reserves of human potential, especially since world polls indicate that more than 40 percent of adults in poor countries would move if given the chance. “When it comes to policies that restrict emigration,” Clemens wrote, there are “trillion-dollar bills on the sidewalk.”

His “trillion-dollar bill” refrain soon became the rallying cry for a new academic movement calling for open borders. A website for the movement, www.openborders.info, borrows its tagline from the title of a blog post by the economist Bryan Caplan, describing open borders as the “Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP.” (Caplan, in another memorable turn of phrase, once said of the possible benefits of unrestricted migration, “This isn’t trickle-down economics; it’s Niagara Falls economics.”) The movement has found a motley crew of supporters, from libertarians, who see government restrictions on movement as a violation of liberty, to bleeding-heart liberals, who see open borders as a powerful way to reduce global poverty.

Borjas spends a significant number of pages in We Wanted Workers caricaturing open-borders advocates as utopians and ideologues. For open borders to increase world GDP by $40 trillion, for example, Borjas calculates that some 2.6 billion workers would have to move from less developed countries to more developed ones (assuming these workers bring their families with them, he writes, the number of migrants would top five billion). “Glossing over this number is the politically sensible thing to do,” Borjas writes. “After all, imagine the reaction at a congressional hearing if an open-border advocate was asked how many immigrants the industrialized countries would attract and the reply was: ‘Oh, something over 5 billion people.’”

And workers are not just workers but people, Borjas stresses, with inextricable histories and cultures. (Borjas takes his title from the Swiss playwright Max Frisch’s reflection on guest workers in post–World War II Germany: “We wanted workers, but we got people instead.”) Borjas writes,

For unrestricted immigration to produce those trillion-dollar bills, billions of people must be able to move to the industrialized economies without importing the institutions, the dysfunctional social models, the political preferences, and the culture and norms that led to poor economic conditions in the sending countries in the first place.

Yet this “seems inconceivable,” he adds, given that an influx of people so large would undoubtedly strain their host country’s political infrastructure and social fabric.

To support this claim, Borjas cites a study of the parking habits of diplomats in New York City, which found that diplomats who came from countries with high levels of corruption — Egypt, Senegal, Pakistan, Ivory Coast, and Morocco — were much more likely to park illegally and then ignore their fines. Borjas concludes, “diplomats bring some of the baggage that characterizes social interactions back home.” But it is unfair, if not disingenuous, for Borjas to extrapolate from the habits of diplomats to those of migrants. Regular parking laws do not apply to diplomats, who can’t be punished for refusing to follow them, whereas immigrants must follow the same laws as natives and incur the same punishments for breaking them. In fact, recent research suggests that immigrants, rather than unloading their “baggage” onto their new homes, adopt the culture and norms they find there. The Manhattan Institute, a conservative think tank, found that “immigrants of the past quarter-century have assimilated more rapidly than their counterparts of a century ago, even though they are more distinct from the native population upon arrival.”

What’s more, despite Borjas’s caricature of them, most open-borders advocates do not actually want to eliminate all borders overnight; instead, they want to move gradually toward a borderless world, easing immigration restrictions over decades. This incremental progress would still bring huge gains to world GDP, most economists say, mainly by enriching the world’s poorest citizens. If rich countries relaxed immigration restrictions even just a bit — allowing a three percent rise in their labor force, for instance — the rewards to citizens of the world’s poorest countries could reach $300 billion — a figure, it’s worth noting, roughly four and one-half times the amount the developed world spends on foreign aid.

Many of the open-borders advocates are prepared to grant Borjas’s claim that relaxing immigration restrictions would harm some low-skilled natives. But they see this harm — according to Borjas, only about a three percent decline in wages in the long run for high-school dropouts — as far outweighed by the potential gains to the country as a whole and to the immigrants themselves, some of whom stand to quadruple their income. At bottom, the disagreement is philosophical. “How would open borders benefit those of us who are already here?” Caplan has written. “You could just as well ask, ‘How would equal rights for blacks benefit whites?’ or ‘How would equal rights for women benefit men?’ The answer, in all three cases is the same: A mind — white or black, male or female, native or foreign — is a terrible thing to waste.”

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As a young child in Cuba, Borjas attended a local “revolutionary school,” where teachers introduced students to Marx, Lenin, and the precepts of the Cuban Revolution. Borjas quickly grew to hate his classes, but he imbibed two valuable life lessons. First, he learned to dislike ideologues. “I have kept my distance from ideologues throughout my life,” he writes, “ranging from the hyper-partisan left-wing radicals that I so often encounter in academia to the rigid libertarians that seem to sprout and flourish in some quarters.” Second, he learned to distrust authority, to be “skeptical — very skeptical — of expert opinion.”

That experience has informed how he views those economists who disagree with him. He portrays them as ideologues, cherry-picking data and manipulating their findings to reach the politically correct, pro-immigrant conclusion. At one point, he compares two economists who question his findings to the “Marxist-Leninist teachers at that revolutionary school in Havana long ago: they believed.”

Borjas touts his own experience as a Cuban immigrant to suggest that he has no reason to be biased against those who move seeking a better life. (In fact, many Cuban Americans are wary of immigration; according to CNN, Trump won 52 percent of Florida’s Cuban-American vote.) Yet Borjas, on several occasions, is as ideological as those he maligns. He continually alludes to vague threats immigrants pose without substantiating them, asserting with little evidence for example, that refugees “import cultural attitudes that may undermine the social and political stability of the receiving countries.” Economists, including Roodman, have criticized Borjas for selectively interpreting evidence to emphasize a negative effect on wages: in his reexamination of the Mariel boatlift, for example, he excludes women from his data set; they saw their wages rise over the period in question.

And outside of the book, Borjas has not shied away from partisan commentary. In August, he published a piece in Politico Magazine supporting Trump’s call for tougher vetting of immigrants. “[T]he next time you hear that Trump’s proposal is crazier than crazy,” he writes in the paragraph Trump would go on to quote on Facebook, “the correct response is that — given the mess the world is in — it is the notion that we should not vet immigrants more carefully that is certifiably insane.” On his blog, he praised the “insightful take” of Breitbart columnist Milo Yiannopoulos, who wrote approvingly of Trump’s proposed policy:

The test will apply to all immigrants, yet its obvious target is Muslims, who, as we know, get a bit bomby in the presence of gays, a bit rapey in the presence of women who wear skirts shorter than their ankles and generally a bit hostile and violent around anyone who doesn’t have their bum in the air five times a day.

As Trump prepares to ascend to the Oval Office, it is important to realize that as heated as the academic debate may seem, it remains far to the left of the platform he's staked out. Even if Borjas is correct, immigration to the United States lowers the wages of just one segment of the native population (just 10 percent of the workforce) by only three percent in the long run, hardly the mass unemployment one heard about at Trump rallies. Borjas acknowledges that immigration produces a net economic benefit to the United States of $50 billion a year. Unlike some on the right, he is supportive of high-skilled immigration, which he calls the surest way to “make natives as rich as possible.” (Steve Bannon, Trump’s newly appointed senior counselor and chief strategist, by contrast, has complained, incorrectly, that “two-thirds or three-quarters of the CEOs in Silicon Valley are from South Asia or from Asia.”) And he does not dispute that for immigrants themselves, immigration offers one of the best ways to escape poverty.

“In the end,” Borjas writes, “the choice of an immigration policy is driven by the answer to: Who are you rooting for?” He avoids answering that question himself. But his arguments will not — and should not — persuade those rooting for humanity at large, who believe all people should count equally or even roughly equally (given that the potential gains to migrants dwarf any potential losses to native workers, supporting increased mobility requires only a mild form of cosmopolitanism). In light of Trump’s impending presidency, this truth remains as important as ever: For most people in most countries, a world with looser immigration restrictions is, ultimately, a better one.

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Nikita Lalwani is a Pelling Scholar at Cambridge University and a former staff editor at Foreign Affairs.

Sam Winter-Levy is a staff editor at Foreign Affairs.