Earth to Libertarians: Immigration Hurts American Workers

An Islamist, a Communist, and a libertarian walk into a bar. The Islamist says submission to Allah is the highest virtue and an ideal society adopts Sharia Law.

The Communist strokes his grizzled beard in disagreement. “Religion is the opium of the people. What really matters is equality!” He then explains how Communism fixes inequality caused by bourgeois decadence. The Islamist nods approvingly—after all, decadence is sinful.

Finally, the libertarian pipes up: “No, no. Individual liberty is what really matters! Sharia Law and communism are fundamentally immoral because they violate personal freedoms.”

The Islamist and communist exchange a furtive glance before bursting out in laughter. “Individual liberty is immoral because it lets people betray Allah,” the Islamist chides. “Personal freedom is immoral because creates inequality,” chastises the Communist.

Dumbfounded, the libertarian wonders whether his fidelity to liberty is simply symptomatic of having been born in Minneapolis, rather than in Mecca or Moscow.

Libertarians—like Islamists and Communists—see the world as it ought to be, rather than for what it is. Given that, they seek to change reality so that it more closely resembles their theoretical utopia. They want to create heaven on earth. Islamists accomplish this through blood. Communists through subversion. Libertarians?

Through propaganda.

A Bad Tree Bears Bad Fruit
Reason magazine is the libertarian Pravda, and it’s raison d’être is to shill for ideological goodies like open markets and open borders. Consider the recent piece by Alex Muresianu, who absurdly claims that mass immigration does not reduce wages for American workers. His evidence? A recent study from the Journal of Development Economics.

The study explored the labor market effects of 1.3 million migrants entering Jordan, a country of just 6.6 million people. Researchers found “Jordanians living in areas with a high concentration of refugees have had no worse labor market outcomes than Jordanians with less exposure to the refugee influx.” Muresianu says this is “particularly eye-opening” because if Jordanian workers were unscathed by mass migration then American workers must likewise remain unharmed.

This conclusion is wrong. Although the study found “no worse” labor market outcomes for Jordanians living among high concentrations of refugees, the phrase “no worse” must be emphasized. Why? Jordan’s annual GDP per capita growth was negative for the study’s entire duration—mass migration hurt everyone equally.

Next, Jordan’s unemployment rate has almost doubled since the start of the migrant influx, and currently sits at 19 percent. This shocks no one—except libertarians.

Finally, Jordan’s labor market is only loosely analogous to America’s. This is partly because American workers are being squeezed by automation to a greater degree, and partly because our economy is relatively capital-intensive, which means that America’s economic growth is decoupled from population growth.

Libertarians routinely trot out studies from distant corners of the earth to “prove” their points. Meanwhile, they ignore data that’s right under their noses.

Consider that more than 45 million legal immigrants currently reside in America. On top of this there are at least another 20 million illegal migrants. And yet, American wages are actually lower than they were in 1973.

If immigration is so good for American workers, then why did wages stagnate when the era of mass migration began? Why do we see wages rise after crackdowns on illegal aliens and “temporary” foreign workers time and time again? Why is California—an immigrant magnet—America’s poorest state, “home” to 170,000 homeless Americans who are the victims of an income distribution more inequitable than Guatemala’s?

Contrast this with Japan. Since 1980, Japan’s GDP growth per capita has actually outpaced America’s—despite the fact that Japan has next to no immigration. How is it possible that Japan has prospered without benefiting from the “economic rocket fuel” that is mass immigration? Could it be that the libertarians are wrong?

Perish the thought! Instead, let’s ignore all that and instead follow in Jordan’s primrose footsteps.

I Don’t Care if the Pie is Small—Just Cut Me a Big Slice!
Muresianu also makes a theoretical argument as to why immigration doesn’t reduce American wages:

. . . the basic laws of economics suggest that an increase in the supply of labor should lower the price of labor. But increased immigration doesn’t just increase the supply of labor—it also expands the demand for labor. Immigrants aren’t just workers. They also help start businesses, and they purchase goods and services from existing businesses.

In effect, Muresianu argues American wages are not affected because immigration increases both supply and demand. Not only is this empirically false, but it misses the point entirely.

The debate over wages isn’t really about wages, it’s about prosperity. There are many ways that immigration reduces prosperity regardless of wages. For example, every time immigrants remit funds abroad they reduce the velocity of money and harm local economies—remittances are like a giant straw that suck liquidity out of American communities. While this goes unnoticed in major cities such as Los Angeles, the rural southwest is littered with ghost towns where the economic lifeblood was drained by remittance outflows.

Immigration also reduces prosperity by elevating taxes. Why? Immigrants are a net burden on the welfare state. This was documented in a comprehensive study from the National Academies of Sciences, Engineering, and Medicine. The Academies made three key findings. First, immigration reduced wages and employment opportunities for American citizens (surprise!).

Second, the economic output of the immigrant population follows a Pareto distribution. That is, the most productive 15 percent of immigrants provide massive economic benefits. Meanwhile, the next 35 percent are revenue-neutral and the bottom 50 percent are a net drain on American taxpayers. In fact, it is estimated that this bottom cohort will cost American taxpayers a net $1.9 trillion in taxes over the course of their lifetimes.

The Academies’ findings are far from unique. The nonlinear, and deleterious, economic effects of immigration are echoed throughout the West.

Denmark’s Ministry of Finance recently found that non-European immigrants (and their children) consumed 59 percent of the tax surplus generated by native Danes. Canada’s Fraser Institute likewise found that mass immigration costs Canadian taxpayers $24 billion annually. Finally, a study from the University College of London found that immigrants cost British taxpayers billions every year.

Who pays for all this? Natural-born citizens. We make, they take. Simple.

Immigration also indirectly hurts American workers by increasing the cost of living and reducing economic efficiency. Nowhere is this more apparent than when it comes to housing. Since 1973, the cost of housing in America (relative to purchasing power) has increased by 73 percent. The main driver of this is the influx of more than 60 million immigrants into America’s major cities—how could it be otherwise?

What about the infrastructure costs to support our larger population? The American Society of Civil Engineers predicts that America’s infrastructure deficit will reach $3.6 trillion by 2020. Who’s paying for this? Not immigrants. And what about something as mundane as traffic jams? More people on the roads means more traffic jams, which already cost America $124 billion a year in lost productivity.

Immigration poses real problems—problems that Muresianu completely ignores. Why? Because libertarians don’t care about America. They don’t care about the American people. And they don’t care about you.

Libertarians care about a theoretical construct they call “freedom,” buy only in its most rarefied and abstract sense. Invariably, they support anti-American policies if they happen to conform to libertarian theology. Is this any different than Islamists pursuing universal submission to Allah, or Communists fighting for global equality? I think not.

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