Saturday, February 28, 2009

New book says immigration benefits the U.S. economy

A new bestseller by Harry S. Dent, Jr., “The Great Depression Ahead,” makes some interesting observations about immigration, and how it benefits the U.S. economy.

In the book, published last year, he makes the point that, although immigration creates social costs, including the costs of health care and education (which critics are always quick to cite), on the whole it’s beneficial. Immigration brings mostly young, hard-working, productive people into the U.S. economy, he says. These immigrants, on average, add a net of $80,000 more in taxes over their lifetimes above these social costs. In addition, they’re an immediate boon to the areas to which they move because many of the things they consume — clothing, food, etc. — are bought locally, boosting consumer demand.

Save Small Business (SSB), a lobbying organization comprised of small businesses attempting to convince Congress to allow more H2B seasonal guest into the United States, held yet another Washington D.C. fly-in this past week. What does that make, seven or eight fly-ins these past several years? I’ve lost count. But SSB is determined to convince Congress that its members desperately need the guest workers. About 150 SSB supporters participated in the fly-in and urged their respective legislators to pass a bill sponsored by Senator Barbara Mikulski (D-MD) to expand the H-2B program.

If history offers a lesson (and I think it does) it’s going to be very difficult for some members of Congress to speak out in favor of this proposal, especially now that times are tough and unemployment is rising. They’re not going to want to be perceived as supporting a measure that allows immigrants “to take jobs away from American workers” — even if few U.S. workers would even consider taking the arduous, low-paying jobs that H-2B workers typically fill.

If Mikulski’s proposal, which many senators and representatives have signed on to, isn’t adopted soon, chances are it won’t be for a very long time, if ever, given how unemployment keeps rising.

Similar scenarios have played out several times during the 20th Century in the United States. We’re all witness to the high levels of immigration into the United States during our nation’s boom years starting shortly after the 1991-1992 recession. But, few of us were around during the Great Depression of the 1930s when immigration stopped, and anti-immigrant sentiment bubbled into protest and, on moe than a few occasions, violence.

When times are good and business is booming, the U.S. government either passes laws to allow more immigration, or (the more recent 1990’s example) turns a blind eye to enforcement of immigration laws.

When the economy tanks and unemployment rises, Congress, responding to howls of protest that immigrants are taking jobs from U.S. citizens, tightens the borders and more strictly enforces immigration law. This is in spite of the continuing need for these mostly young immigrant workers who, Dent claims, add much more to the economy than they take from it.

You may not agree with the observations about immigration he makes in his book, but likely we can all agree that if employers paid higher wages for many of the jobs now done by immigrants, and U.S. workers did step up to do them, we would pay more for our our domestically grown vegetables and U.S.-processed chicken and seafood products, hotel stays and landscaping services.

How much more are we willing to pay for these and other services that immigrants do for us, who knows?

As for the book, "The Great Depression Ahead," if the author is right, we're in for a long, protracted deflationary period, perhaps three or four years. It's an interesting read, whatever your take on the economy and where it's going. — Ron Hall

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