Saturday, August 27, 2016

From the Archives: Immigration laws may make United States poorer, says economist Daniel Lin

Publisher's note: This article was originally published on on February 22, 2014. The publishing platform was discontinued July 1, 2016, and its web site was scheduled to go dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Immigration laws may make United States poorer, says economist Daniel Lin

America is, “on average, poorer” because immigration laws limit the number of willing workers who can come to the United States and offer their services to willing employers.

That was one of the points made by economist Daniel Lin during an interview with the Charlottesville Libertarian Examiner after he delivered a lecture at the University of Virginia on the topic, "Who Wins? Who Loses? The Economic Effects of Immigration."

Educated at UCLA and George Mason University, Lin teaches economics at American University, where his research interests include the industrial organization of entertainment industries, the theory of the firm, and the antitrust implications of various theories of competition. His lecture at UVA was sponsored by Young Americans for Liberty and the Institute for Humane Studies.

“Most of the discussion about whether we should allow more immigrants” into the United States, Lin said in the interview, focuses on the question, “Is the increase in well-being that we see for the immigrants, is that enough to justify the fact that Americans suffer?”

'Foreigners benefit us'
Even if you don't “say that foreigners are worth just as much as Americans,” he continued, “you can say that we should focus on Americans first.”

Still, Lin added, “what this discussion is missing is: Do we really know what's happening to Americans? And are we really paying attention to how much foreigners benefit us when they come here?”

The purpose of his lecture, he said, was to point out how “we're not really sure about either of those things. It turns out the effects on Americans, when we allow more foreigners, are not conclusively negative.”

Some “respectable economists,” he explained, argue that “when we allow more foreigners in, it allows more Americans to specialize in higher-wage jobs, to do more,” and the wages of Americans “go up.”

Complementing Americans
Part of the reason for this is complementarity, meaning that immigrants do jobs that free up Americans to do other jobs, often jobs that pay higher wages and are more productive.

“When we see workers coming in,” Lin explained, “we often think that they directly compete with all Americans, but that's not quite correct. When new workers come into this country, they are also complements to American workers.”

He offered the example of someone who is a programmer or a scientist.

“If you have that person mow his own lawn, or cook his own food, or make his own clothes, he's going to have to take time away from being a scientist [or] being a programmer,” he said.

If, instead, someone else performs those tasks, the American “can focus more time on being a scientist, being a programmer, and do more work, be more productive,” Lin explained. “The helper is not a direct competitor to the scientist or the programmer or the teacher or researcher, whatever.”

The immigrant is instead “a complement, who makes that person [the American] better off. That is why you don't see people who are hiring nannies or gardeners recoiling when they do that. They're not forced to do those things. They want to do those things. It's the laws that are trying to prevent those things from happening.”

The people “who are doing the hiring and the people who are doing the working,” Lin pointed out “both benefit when they are allowed to contract with each other.”

Making Americans poorer
Having laws that impede immigration into the United States makes everybody poorer, he explained.

“The current laws allow foreigners to come in but it is a trickle compared to the number of people who want to come in and the number of people who Americans want to hire,” Lin said.

“If you look at the waiting list for visas” for people who want to work in the United States, which are often multiple-years long, Lin said, “we certainly can conclude that America is, on average, poorer because we block these types of contracts from happening – these exchanges from happening.”

When people who want to work in the United States “are being prevented from coming here and the Americans who would benefit from having these extra workers are not allowed to have those benefits,” he argued, “we certainly do see Americans on the whole being poorer than otherwise they would be.”

The stereotype that immigrants are hard-working and ambitious is “rooted in truth,” Lin said, because of “selection bias” that comes from people who are “willing to overcome the cultural differences, the language differences, moving apart from [their] home town [and] family,” in order to come here to work, as well as who are “willing to put up with a lot of bureaucracy” to get that “golden ticket” permitting them to work in the United States.


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