The Economic Idiocy of Immigration Protests

Earlier this month Senator Harry Reid (D-NV) commented on the House Republican refusal to move on the Comprehensive Immigration Policy Reform bill stalled on their side of the Congress:

“Comprehensive immigration reform would have added an average of 121,000 more jobs per year over the next 10 years,” Reid said. “Unfortunately, House Republicans, under the influence of the Tea Party, refused to bring it up for a vote. Their refusal is costing our economy added growth that we need.” [The Hill]

The comment underpins a simple concept:  Refusal to consider comprehensive immigration policy reform comes at the cost of American economic growth.  The figures cited by Senator Reid are fairly common.

“Numerous studies and the nonpartisan Congressional Budget Office found that the Senate’s bill would lead to significant economic growth as immigrants fully enter into our society and economy. Over the next 10 years, the Border Security, Economic Opportunity, and Immigration Modernization Act, S. 744, would increase our gross domestic product, or GDP, by 3.3 percent and would raise the wages of all Americans by a cumulative $470 billion, while creating on average 121,000 jobs each year.” [CAP]

Where does this come from? Once more, we have to look at the demand side of the supply/demand equation.  Tired of having me call it “aggregate demand?”  The total demand for goods and services, can also be described clumsily as  the willingness on the part of people to part with their wealth in order to possess some goods or receive some services.  Put in the simplest possible terms, the more people the more demand.

However, it’s not just the addition of more human beings that factors into economic growth, it’s how much wealth or income they have available to part with at the check out counter which factors in as well.

Here’s the point at which the ‘They’re Taking Our Jobs” Crowd of screamers has missed the macro-econ bus by at least an hour.  If Congress were to enact S. 744, the Comprehensive Immigration bill as it passed the Senate, we’d have about 10.4 million new legal U.S. residents — who need cars, kitchen tables, television sets, toothbrushes, towels, shoes, homes, rugs, lamps, sofas, and all the other Stuff of Life — who would be permanent residents. [CBO]   Therefore, those purchases and payments would not be interrupted by temporary status.  That’s money into the economy! Money into the economy equates to economic growth.  It doesn’t get much simpler.

The “They’re Making Our Wages Lower” Crowd is similarly out of touch with reality.  Currently our undocumented residents are part of the Shadow Economy, and being in the shadows means that about 8 million people are working in a system in which their earnings are not declared.  If as an employer my avarice exceeds my common sense, then I can keep “wages depressed” by hiring undocumented individuals for less than what I should have to pay a fully qualified resident — the fact that as an employer I have the option to function in the shadows depresses wages.  The wages paid is not an option for the worker — it’s a decision on the part of the employer, and the greediest among us will opt for the expedient of hiring someone for whom earnings aren’t declared.

Immigration protest graffiti

Bring people out of the shadow economy, bring their earnings out of the shadows, and watch the increase in money available to be spent in our commercial and retail sectors.   Again, the more money, the more spending, the more spending the more economic growth.   It’s hard to miss this point but several individuals who seem to be challenged by the spelling of illegal (“illeagle”) have done so.

And, by the way, declared earnings are taxable, thus adding to the funding of Social Security, etc., and apply toward the reduction of the debt and deficit some people are perpetually bellowing about.

In short, we’re losing about $80 billion annually in terms of economic output by stalling on Comprehensive Immigration Policy reform, along with absorbing an estimated $40 billion in annual budget deficits.  Additionally, we risk losing some 40,000 STEM graduates — in fields we really shouldn’t want to vacate for competitors.  [WH]

It might be interesting to find out how the following question would poll:

Do you believe that the United States should continue to operate with $80 billion in lost economic output and risk the loss of 40,000 STEM university graduates or should the Congress take action?

OK, that’s a question in the Push Poll manner of pseudo-research, but it makes the point — continued opposition to Comprehensive Immigration Policy reform makes no sense.

At least it makes no sense in economic terms, but the right wing conservatives seem incapable of contemplating the issue in economic terms in either the macro or micro realms.  It appears to have become a tribal, racial, emotional, primitive reaction to Us vs. Them.  At the least it’s xenophobic in the classic manifestation of NINA signs, and outlawing German language classes during World War I.

NINA

At the worst, it’s racist, harkening back to the faces of anti-integration supporters during the modern Civil Rights Movement.  I’ll repost this image for emphasis:

Murrieta Little Rock

* There’s more from DB back issues:  Here, here, and here.  For the human, and humanitarian side click over to the Nevada Progressive.

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