Your continued attempt to assert an argument that doesnt fit continues to be unconvincing. there are concrete facts at hand that a 200 year old theorem has no relevence to one way or ‘other. malthus didn’t understand economic growth - he *also* wasnt faced with an economy that adds more immigrants than ever before in its history.
I will try one last time and be done with it.
1) One key argument is that the specific people who came here illegally are no better for our economy as legal immigrants. Since the only net change is in governmnet benefits then any free market lover should agree with that.
2) Another key arugment is that Classical economics is based on supply and demand and Larger supply of labor will impact wage rates to be lower than they otherwise would be. To assert otherwise is to defy multiple studies which have confirmed the effect. The fact is that other things being equal, if immigration were lower,the wages would be higher in certain industries. Doubt me?
Take a look at this study:
“• By increasing the labor supply between 1980 and 2000, immigration reduced the average annual earnings of U.S.-born men by an estimated $1,700, or roughly 4 percent. • Among those born in the United States who did not graduate from high school — roughly the poorest one-tenth of the work force — the estimated impact was even larger, reducing wages by 7.4 percent. • The negative effect on U.S.-born black and Hispanic workers is significantly larger than on whites, because a much larger share of minorities are in direct competition with immigrants. • The reduction in earnings occurs regardless of whether the immigrants are legal or illegal, permanent or temporary. It is the presence of additional workers that reduces wages, not their legal status, but it is the uncontrolled nature of illegal immigration that makes that situation so untenable.Source: Jorge Borgas, Kennedy School of Government at Harvard”
Note the last point - illegal or legal, the impact is the same.
http://www.cis.org/articles/2004/back504.html
You can parrot Malthus all day long and its meaningless chatter. Malthus failed to understand that economies can grow and technology can advance in ways to utilize the same resources better. But Malthus was confused because *HE SAW THE VERY EFFECT WE SEE TODAY* in the in-migration of rural people to cities that created an “iron law of wages” for a time period... only when the industrial economy grew to absorb all the natural workers in the economy (of England at the time) and rural/urban populations fully shifted, did the wage levels rise in tandem with the labor market tightening.
If in USA version A, w had 0.5 million legal immigrants a year and in USA version B, we had 1.5 million immigrants a year, 1 million legal, and .5 million illegal and mostly poor lowskill workers ... WHICH WOULD HAVE HIGHER WAGES FOR UNSKILLED LABOR?
If you argue that the differences dont matter, then why the curious coincidence that in the 1950s and 1960s, when immigration was low, the “rising tide lifts all boats” was true, but in the 1990s and 2000s decades, a time of the largest immigration of our time, we curiously are seeing *no increase* in median earnings for non-college degreed workers. Indeed, declines ...
“Why do illegal immigrants force down wages? “That’s how markets work,” responds Cappelli. “It’s hard for the average person to understand that these are markets. If illegal workers left the U.S. tomorrow, what would happen? Some people think nobody would do those jobs. If that were to happen, companies would change those jobs, and wages would go up. Yes, companies would hire the people who are not necessarily doing those jobs now. This goes on in every labor market. There are no jobs that we can think of where, over time, work doesn’t get done. It doesn’t happen.””
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1482
Your argument on this point is not with Malthus at all but the data collected by Borjas and others.
3) Claim of “net benefit to economy” ... what does ‘the economy’ mean to us? “the economy” works as a proxy for the experiences of the members of the economy, but does not when you have large immigration inputs. Consider: If 1 billion of the poorest of the world cam to the US in short order, you would find that (a) our GDP would skyrocket and (b) “most people would be upwardly mobile”. Good? Not good for the 290 million already here and crowded out by higher taxes, poorer services and higher inequality. Even if the world’s net standard of living went up, the std of living would go down for Americans. it would be not different that if we up and decided to give our selves a 20% tax on all wages that was dedicated solely to sending money to people in a third world country.
Higher GDP as an abraction doesnt help people whose standard of living is notably lower than it otherwise would have been.
Thus argument about “benefits to the economy” such as the WSJ often makes miss the point - what’s the benefit to the economic condition of the American citizens here today? Will it help them? Or hurt them?
3b) “You acknowledge that immigration has been a net benefit to the economy. OK, how?” Your failure to distinguish between the subset of immigration that is good and the subset that is bad is the issue.
*SOME* immigration is helpful and *SOME* immigration, whether legal or illegal is hurtful ... moderate levels of immigration based on skill levels helpful to the economy - good. massive chain migration of impoverished illiterates - net drain. The main differences are net impact on taxpayers, since unskilled and non-workers do not ‘pay their own way’ through life and become added burdens on taxpayers also how they impact wider economy through earnings and spending.
4) “when in fact legal immigration on a vast scale made this country the wealthiest society in human history.” False. Our freedom, our rule of law, our limited govt created the environment for opportunity that lead to our wealth. Low levels of immigration in 1920s to 1960s didnt stop America from becoming and remaining the richest economy on earth. Indeed one can look back on that period as our hey-dey relatively speaking.
5) “What specific economic mechanism was (and is) at work?”
The specific mechanism at work that refuted Malthus was/is technology. Technology will advance however whether immigration is high or low. Immigration of low wage illiterates will hardly advance our technology, otoh high-skill technologists with PhD may help advance technology (and has in the past).
One can conclude from that and previous comments on good v bad immigration - we should have a simple and selfish policy on immigration: Those who can afford to pay a lot of money to get a green card (eg $50,000) and/or prove high level of skill and high earnings (so net taxpayers) should get in, the rest should stay away.
And far from being ignorant of large scale population growth aided by immigration, Malthus specifically cites US population growth at the end of the 18th century as evidence that population increases "in geometric ratio" aka exponentially. You are right to say he did not understand economic growth (neither do you, since you think it is caused by technology), but he did know that economies grow. He just thought they grew linearly as resources were used - the original limits of growth argument - and that therefore population growth (as an exponential) would always swamp it eventually.
Far from being a dead idea, Malthus's mistakes are at the root of virtually every contemporary anti-capitalist ideology. The green opposition to development is essentially Malthusian (finite resources being their replacement for the role of land in his system). Ecology based criticisms of capitalist economics that think they are basing themselves on Darwin do not realize that Darwin is a transfer of Malthus's ideas to biology. The same is true of Marxism, and secondarily of its derivatives, including the labor market theories of prominent Keynesian-socialists (including Samuelson, cited by one of your study sources on the point). And of course protectionist "restrictionism" of the stripe being discussed in this thread. All of it is Malthus retold in pieces by people ignorant of the origin of their own ideas.
"the specific people who came here illegally are no better for our economy as legal immigrants. Since the only net change is in governmnet benefits"
Repeating the culturally ignorant claim of the original article will not make it true. Of course legal immigrants differ from illegal ones in hosts of ways besides access to government benefits. Starting with the fact that legal immigrants are law abiding while illegal immigrants are criminals. Kinda culturally relevant, that one!
It is balderdash to claim that our legal immigrants are worse for the country than the illegals are just because the legal ones are (legally) eligible for transfer payments. The illegal ones are clearly worse for the country in hosts of ways starting with the undermining of law, then the systematic illegality and mendacity that follows everything they touch, etc.
While legal immigrants are frequently quite uninterested in transfer payments for exactly the same reasons they abided by laws in the first place - they are typically self reliant individuals whereas illegals have shown themselves to put personal expediency above the law etc. Moreover, not being legally eligible for transfer payments no more stops illegals from receiving various kinds of support, than the laws they broke coming here stopped them from arriving. Scams by the hundreds follow forged documents etc. It is a hopelessly naive argument, and everyone with the slightest common sense sees that illegal immigrants are worse for the country, not better as the article tries to claim.
"Classical economics is based on supply and demand and Larger supply of labor will impact wage rates to be lower than they otherwise would be"
This is exactly the Malthusian nonsense in question. That you still do not even acknowledge that it is controversial, controverted, and factually wrong, shows how deep your own ignorance of the subject is. Chesterton once defined a bigot as a man incapable of entertaining the contrary of a proposition. You can't even understand that in maintaining this, you are taking a position that needs to be defended by rational argument and supported by actual data; that it is widely known to be false empirically, and that theoretical explanations of why this widespread expectation is false, have been available for well over a century.
"to defy multiple studies which have confirmed the effect"
On the contrary, the study you yourself cite below acknowledges that virtually all previous studies (to that one published in 2004) found no correlation between immigration and domestic wages. Clustered at zero and not statistically significant. The author of the paper you cite tries to manufacture such a correlation by breaking the data into many more classes based on his proxies for education level and prior experience. If you look at the actual data he generates as a result, instead of just citing his conclusions, you will see they form a nearly perfectly random scatter plot, centered again around zero.
He then tries to find the correlation he wants in a regression line fitted through that scatter plot, with a very slight and negative slope. But presents nothing as to the statistical significance of said fit or its confidence interval compared to a null hypothesis - because it doesn't have any.
But there is a much more basic conceptual problem with that paper. It pretends that the economic growth actually observed is automatic (your "other things equal", expect they aren't) and in no way depends on the immigration for which it controls. This assumption is unwarranted, since we know increasing population by itself increases economic growth. A given trade may be centered in locations with no immigrants, but benefit from the increased demand a large population earning high wages created by profitable employment growth, etc.
An actual control would have to compare, not two trades both in a growing economy stimulated by population increases, one of which has green people and another blue people involved in said trade, but an economy stimulated by population increases and another that is static.
The article also attempts to present changes from imaginary baselines as falls, when there is no actual fall seen anywhere. Per capita real wages rise throughout, always, while population is increasing.
Here is the actual history as opposed to inferences from barely above zero slopes of lines through scatter plots manufactured from arbitrary sub-categories. From 1790 to 1860 US population increases 3% per year (a cumulative rise of 8 times). Real per capita income increases 1.84% per year. From 1860 to 1920, US population increases 2% per year (a cumulative rise over 3 times), real per capita income increases 1.65% per year. From 1920 to 1960, US population increases 1.3% per year and real per capita income rises 2.24% per year. From 1960 to 2005, US population increases 1.1% per year - note well, slower than ever in US history - and real per capita income increases 2.22% per year, as fast as in the previous period.
Overall, the fastest economic growth happened with the fastest population growth, 4.9% in the first huge period, 3.7% and 3.6% in the next two, and 3.34% in the last. But is large and positive throughout, as population increases by large amounts throughout, and always real per capita income is rising, right along with population growth, at roughly 2% per year.
No Malthusian can explain why. They wave their hands, they cite technology, the pretend it is inevitable, they assuming it away with "other things being equal". Samuelson himself has literally no explanation of ongoing economic growth. He merely observes it and acknowledges its existence, while the macroeconomic theorems are instead about a general equilibrium (opposite of a thoroughly unstatic, indefinite growth process) that is not observed.
"other things being equal"
But those other things include the increase in overall output caused by more people working, so no, they are not equal. It is one entry accounting - imagine all the products and services made by immigrants existed, imagine all the jobs in truth supported by the existence of that extra output existed, but were produced without any extra labor time. Well yes, if you deliberately imagine something that is the definition of higher productivity (same output with less input), you will imagine that higher wages could be supported by that imaginary higher productivity. But there is no reason whatever to think that extra output would be created without those extra inputs. All you ever see is both occurring together, or neither occuring.
The average hourly earnings of US workers in 1980 were $12.16 ($6.57 nominal, the rest is inflation) and in 2000 were $13.75, in chain weighted 2000 dollars. Hourly earnings rose 13%. Meanwhile the number of jobs increased 44%, by 40 million all told. There is no reason whatever to think the hourly earnings increase would have been larger had the number of added jobs been lower. On the contrary, it is vastly more likely the whole economy would have grown much more slowly had it not created (and filled, profitably) so many new jobs.
Real income of US workers is simply not declining. The number of people working exploded, and the amount each makes rose modestly as well. The average US standard of living increased markedly, primarily because many more households now have two incomes, because there are vastly more jobs. So far from immigrants having taken all the domestic worker's jobs, large numbers of the domestic worker's wives as well as the immigrants have all found net new jobs, while wages for all involved have increased, and not just nominally but in real terms.
And no, Malthus was not misled by seeing the iron law of wages in action. He never saw the iron law of wages because the iron law of wages is theoretical poppycock and has never happened, anywhere, at any time. Greater numbers of people working directly increases overall economic output, and acts as a decided stimulus to, not a restraint on, per capita economic growth. The period of its enourmous upsurge in population is when European economies pulled away from the rest of the world, and never looked back. Population growth and economic growth, per capita as well as overall, are highly and positively correlated, and statistically significant at any level of confidence you please.
The contrary notion is false, no matter how widespread or seemingly commonsensical.
Of your two USA versions, the latter would almost certainly have higher wages after any appreciable period - say 25 years - simply because overall economic growth would be significantly higher, and in the long run that would swamp any half a percent static effects on relative wages of this group or that. US real wages have increased *40 fold* as population increased *75 fold*. Only staggering foolishness could possibly fixate on relative 1% to 5% differences, one-off, in such a process. Keep both huge multiplication processes going, and everyone is going to get obscenely rich, by all past standards.
To keep it going, yes we need the rule of law, we need to control those titantic processes, we need to encourage assimilation, etc. But effectively because those are the way to maintain our ability to absorb and use new population, and new and ever greater population brings prosperity (and power), not because we need to fear or prevent a higher population of workers.
Your later arguments suffer from the delusion that increased population is increasing only overall GDP but that it is reducing per capita GDP. This is not remotely the case. The real economy has exploded by 40 * 75 = 3000 times (real, after price changes), making 40 times as much income (every year) for each of 75 times as many people.
This is so outside the bounds of any static anything or anything Mathusian statics can comprehend, that it is a downright scandal that we are still sitting here arguing about it. What the heck will it take in the way of explosive and world transforming success, before people believe that capitalist growth (including utterly unstatic population explosion) is good for us?
Since the massive reality can apparently be ignored, I'll try the opposite extreme. Imagine two Americas, one as it is now but with illegal immigration controlled, present illegals removed, but ongoing continued legal immigration and ongoing burgeoning population - the position I call for - and on the other hand imagine yourself personally alone on a howling wilderness of North America, without another human soul present or ever having been present, left to fend for yourself as best you can, with your bare hands and naked body your only instruments.
Which is a wealthier society?
Fine, now reason.
Do other people working enrich you or impoverish you?