Immigration -- Touching the Third Rail

Plus a Cancer Update

Mar 24, 2022

No Post Next Week

Next week is the first week of chemo and I’ve written a few posts in a row, so am going to take the week off next week. Feel free to stop in and read an archived copy or take the week off (crazy, I know). I’ll be back before you know it.

Cancer Update

You might notice that we’re a little late in this week’s update. I wanted to get the full status report which took through today — MRI on Monday (those are LOUD!!), Chemo Doc on Tuesday, and Brain Surgeon today. This is one of those good news, bad news, good news stories. Let’s start with the good news. The MRI showed that the brain cancer has been removed for the most part (there may be a small amount left, but it may be just radiation “noise”). The bad news, this is a cancer with a 100% reoccurence. However, it could be 5 years or it could be 25 years…not very predictable. Then there’s the good news, when it comes back (I’m assuming I don’t get run over by a truck, die running an ultra, or any of the other 101 ways people die as they get older), the treatment is pretty much the same as of now. However, this time the MRIs should keep it from being a surprise so I can avoid a Christmas morning surgery! All in all, a pretty good report.

As for the chemo, they don’t know yet if it is going to be 6 months or 12 months as they are going to see how the treatment progresses. Still hoping for 6 months as I’d like to get back to doing things a little more frequently with people. Granted, I’m an introvert so love spending time with just Deb and I. That said, occassionally I’d like to get out into groups of people without worrying about COVID or the flu (just not everyday 🤣).

Immigration

We’re going to touch the third rail (well, there are actually quite a few “third” rails, so this is just one of them). First, I want to acknowledge that this is a tricky issue in that it, shockingly, is not clear cut and there are pros/cons of both sides. We’ll get to them in just a minute. I’ll start with the cons, but show that they are more tied to perception than reality. Then, I’ll move to the pros. It is probably not surprising that I think the immigration issue in the US way too tight and it is hurting our opportunity for economic growth, diversity, religious awareness, etc. That said, we really need to see both people in the US AND immigrants (yes…BOTH groups) be open to making this work in order for it to be a success.

Cons of Immigration

Let’s start with some of the more obvious challenges with immigration — illegal immigration. These are people who are not supposed to be in the US, but are (overstaying visas, crossing the border illegally, etc.). One potential problem is crime. Do illegal immigrants commit more crime than US citizens or not? Well, let’s take a look at the data. There is a Cato Institute study looking at Texas that addresses this.1 The following is a quote from Alex Nowrasteh

The results are similar to our other work on illegal immigration and crime in Texas. In 2018, the illegal immigrant criminal conviction rate was 782 per 100,000 illegal immigrants, 535 per 100,000 legal immigrants, and 1,422 per 100,000 native‐born Americans. The illegal immigrant criminal conviction rate was 45 percent below that of native‐born Americans in Texas. The general pattern of native‐born Americans having the highest criminal conviction rates followed by illegal immigrants and then with legal immigrants having the lowest holds for all of other specific types of crimes such as violent crimes, property crimes, homicide, and sex crimes.
The only statistically significant relationship worth reporting is a negative association between total violent crime convictions and the illegal immigrant share with a point estimate of ‑0.104 that is significant at the 5 percent level. This exception suggests that a 10 percent increase in the illegal immigrants share of the population is associated with a 1 percent decline in violent crime convictions in our sample of Texas counties.

This indicates that illegal immigrants are less law abiding than legal immigrants, but both are about 45% less likely to commit crimes than US citizens. Again, this is not a blanket statement that illegal immigrants are not a problem. Instead it is a small piece of evidence on that side.

How about their impact on the labor rate? Do illegal immigrants undercut US citizens for work? Let’s check on that. If we look at this piece by the Center on Budget and Policy Proceedings we see the following quote:

The Administration’s justification for the rule rests on the erroneous assumption that immigrants currently of modest means are harmful to our nation and our economy, devaluing their work and contributions and discounting the upward mobility immigrant families demonstrate.

If we look through this report, we see that

Immigrants were more likely to be employed than US citizens (65.7% labor force participation rate relative to a total US population rate of 62.3%).
Immigrants do work that is harder to fill than US citizens are willing to do. Specifically, 36% percent of workers in the farming, fishing, and forestry fields are immigrants as are 36% of building and grounds cleaning and maintenance workers.
Immigration is helping housing growth rates. In the 1970’s, immigration accounted for 8.7% of total housing growth. The most recent numbers show that immigration accounted for 39.5% of housing growth.
Immigrants who are on public assistance (such as SNAP or Medicaid) are still contributing to the labor pool. The study notes that 77% of working-age immigrants (18 to 64) who received one or more of six benefits during 2017 also worked during the year or were married to a worker. For more than 60% of working-age immigrants who received benefits, the work was year round, that is, 50 weeks of the year or more.
Immigration benefits social security. It is estimated that for every 100,000 immigrants, social security benefits improves by 0.08% of taxable payroll.
Immigration leads to upward mobility for the children of immigrants. Studies have long found that the children of immigrants tend to attain more education, have higher earnings, and work in higher-paying occupations than their parents.

Again, some of these data points still can be broken down to “why are we helping other people when we won’t help our own citizens?” This is a legitimate argument, but only if you see the random person from North Carolina, Texas, or Oregon as more deserving than the person from Haiti, Ukraine, or China. There is a reason we “trust” US citizens more. They are culturally more like us. Am I more accepting of a Muslim or a Christian? Am I more accepting of someone who knows Brooks and Dunn, Metallica, or Justin Beiber than someone who doesn’t? The answer, in many cases is yes (and I’m including myself in this group). Having familiarity helps make connections. The more familiar a person is, the easier it is to create a common ground. It is far easier for me to relate to someone that went to UNI, KU or Pitt State because of we share those connections. That said, it is not the best way to expand your horizons.

Pros of Immigration

Having spent many semesters teaching finance courses at Pitt State two aspects of international students caught my attentions. One is that it takes a tremendous amount of courage (or an adventurous spirit) to decide that learning in your native language with your friends/family nearby was insufficient. Instead, you were going to travel across the continents (in most cases) to learn in a foreign language, in a different culture (food, music, etc.), without your family/friend support system. Oh yeah, and hear about companies that you aren’t really familiar with as classroom examples on a regular basis. It’s freakin’ hard!

The “benefit” is that if you like the new country you’re in, you MAY get the ability to stay as a non-citizen for awhile and work here awhile. That said, you don’t automatically become a citizen. Many of the students that I saw who came from an international country were in the top half of the classroom. There is definitely some selection bias here. You don’t decide to travel to a foreign country to study if you aren’t expecting to be successful. These are already among the brighter students who decide to take the trip to the US. This leads to the second factor, the employment search process becomes much more challenging. You can return to your home country, but it is more challenging to stay here — paying US taxes, increasing US productivity, adding diversity to US culture, etc.

There are essentially two ways to increase US GDP growth (not that that is the only factor to consider, but it is a common economic goal):

Increase the workforce
Make the workforce more productive

We’re going to focus a bit on the first point here — increasing the workforce. There are essentially three ways to increase the workforce.

Increase the population. If there are 100,000 employable people in the US and you grow the population to 150,000 employable people, you will be able to produce more goods and services. This is especially important when unemployment rates fall low enough that jobs are reasonably easy to achieve…much like they have been in the US for the past few years.
Increase the working population. Assume that there are 330 million people in the US and that 62% are in the workforce. This effectively means that 204,600,000 people are working. If the workforce participation rate increases to 63%, that adds another 3.3 million people into the workforce. Therefore, increasing the WPR improves the workforce, while decreasing lowers the workforce.
Increasing the population through immigration.

Let’s look at the first two pieces of data

These are two charts. The first is the global population. The main point to notice is that population growth is declining. While still positive, the trend in growth rate is definitely negative. The second chart is the WPR which shows an increase to 2000 and then a relatively steady decline. Granted, it did turn up a bit over the past few years, but the unemployment rate is currently 3.8% (vs. the all-time low of 3.4% in 1969 and 3.5% in 2019). While it is climbing again, it probably won’t go back up to the all-time high of 2000. Therefore, we have population growth slowing and labor participation rate that has declined and is only slowly increasing. This leaves immigration as a primary workforce expansion area. While the perception is that immigration numbers were down during the Trump administration, that is actually not true. We can probably exclude 2020 as there was too much international turmoil due to COVID, but if we stop at 2019, we can see that immigration actually stayed steady during the 2017-2019 years (13.7% foreign-born population).

This was a case where anti-immigration talk was worse than anti-immigration action.

The economic argument for allowing MORE LEGAL (an important characteristic as we don’t want people spending half their time worried about getting kicked out of the country) immigration is pretty clear. There is ample support for the idea that immigration helps (to a relatively small extent) the productivity of the country that people are choosing to immigrate too. This makes a little bit of sense intuitively — why would I choose to go to a country where my employment opportunities are worse than my current situation? Instead, there will be a tendency to go to a situation where my condition improves. This will primarily be economic, but could also be due to other factors (personal liberties, safety, educational opportunities, etc.).

Conclusion

Seeing pictures of Ukraine and Russia drive home just how horrible tribalism and propaganda are. It is also, just one of hundreds of recent examples where parties are torn apart by people trying to establish power through the use of tribes (governmental, racial, sexual orientation, religious, and many other). While there can be some advantages to tribal behavior, but it creates a lack of diversity. The good news (as this Pew Research Center shows) is that attitudes are becoming more open to immigration.

Granted, this is just a brief overview of immigration (both legal and illegal) and barely scratches the surface of the work done in this arena. I don’t think “open” borders are a legitimate solution. That said, reducing the restrictions to legal immigration are far more likely to benefit the US in terms of economic growth, diversity, educational opportunities, religious awareness, and other areas. It merely requires people in the US AND people immigrating to the US to drop their tribalism! Instead, embrace your differences and recognize that being born in Madrid, Iowa or Madrid, Spain is really just based on random chance.

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