Im-Politic: A Study of Immigration Economics that Ignores the Economy

Tags

Breitbart.com, Im-Politic, immigrants, Immigration, income, inequality, Leah Boustan, middle class, Neil Munro, Raj Chetty, Ran Abramiztsky, social mobility, The New York Times, Washington Post, welfare

Well, there goes one of the main arguments against more permissive U.S. immigration policies right down the tubes, according to both the Washington Post and New York Times. This month, both have run major articles spotlighting new scholarly findings claiming to show that today’s immigrants rise up the national income ladder just as fast as the tides of newcomers to American shores in the late 19th and early 20th centuries.

So far from saddling the country with huge numbers of extra residents overwhelmingly likely to stay as poor, and burdensome to society on net as when they first arrive, encouraging more immigration will greatly enlarge America’s pool of success stories and greatly enrich the nation.

Or will they? The trouble is, the more you think about the new data and the conclusions flowing so freely from it, the more unanswered crucial questions appear. I’ll base this analysis mainly on the Post piece, which provides more statistics comparing the economic records of those two great immigration cohorts.

The economists making the case that recent immigrants are no likelier to become a permanent underclass than their forebears are Ran Abramitzky of Stanford University and Leah Boustan of Princeton University. Their conclusion is based on statistics they claim show that men born into poor immigrant families in specific years of the “Ellis Island era” (1880 and 1910) caught up to the rest of the country income-wise at just about the same pace as the men (and women) born into poor immigrant families in 1997.

For both the Ellis Island immigrants and their latter-day counterparts, the measure of economic success is the earnings of these second generation immigrant men between the ages of 30 and 50, and how they’ve supposedly risen.

But these scholars appear to completely overlook numerous sea changes in the U.S. economy between 1880 and 2015 that obviously have had decisive effects on the income growth performance of immigrant cohorts that have arrived at different points during this 135-year stretch.

For example, more recent immigrants have clearly benefited from various state and national welfare programs that either were completely unavailable to previous such groups, or existed only in the most rudimentary forms. Since cash benefits are counted by the Census Bureau as income, and given the evidence that immigrants are heavy welfare users compared with the rest of the population, the discrepancy surely distorts the Abramitzky-Boustan comparisons in favor of those more recent immigrants.

Nor do the two scholars seem to take into account the dramatic slowing of income mobility between the late-19^th and early 21^st centuries. And much evidence shows that it”s been considerable. For example, this widely cited study concludes that “The United States had more relative occupational mobility [which generated upward income mobility] generations through the 1900–1920…than the United States in the second half of the twentieth century.”

And these conclusions have been reenforced for the late 20th century and extended into the 21st by a team of economists headed by Harvard University’s As summarized in the first graph in this different New York Times article, the percentage of all U.S. children (including those from immigant families) born into the average American household with a chance of earning more than their parents fell by about half between 1940 and 1980.

Additionally, the Chetty team – whose work is viewed by many as the latest gold standard in the field – discovered that lower-income Americans (also including immigrant families) have by no means escaped this pattern.

In other words, the move by the children of low-income immigrant cohorts to the 65th U.S. income percentile – the Abramitzky-Boustan measure of income ladder-climbing – isn’t nearly what it used to be. (For some perspective, the 50th percentile is something of a proxy for “middle-class incomes.”)  

And further reenforcing the idea that individuals’ ladder-climbing nowadays doesn’t yield nearly the economic stability and security affects as in the past are two other widely noted trends marking the U.S. economy and workforce in recent decades: a major widening of income inequality, and the growing inability of single-earner households to live middle-class lives.

In other words, two economists from leading universities have evidently conducted research about a major U.S. economic issue that ignores much of what’s been happening to the U.S. economy during the period they examine. And at least two leading newspapers have uncritically swallowed their findings. It’s clear that climbing into the middle class isn’t the only feature of American life that isn’t nearly what it used to be. 

P.S. For work raising different, generally broader questions about these and other immigration-related findings by Boustan in particular, see this piece by Breitbart.com‘s Neil Munro. 

 

 

Making News: Back on National Radio Tonight on China Tariffs and Inflation…& More!

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agriculture, Biden, Breitbart.com, CBS Eye on the World with John Batchelor, China, food, Gordon G. Chang, Immigration, inflation, Making News, Neil Munro, Newsweek, productivity, tariffs, Trade, Ukraine-Russia war, wages

I’m pleased to announce that I’m scheduled to return tonight to the nationally syndicated “CBS Eye on the World with John Batchelor.” I don’t know yet exactly when the taped segment will be broadcast, but John’s show airs week night’s between 10 PM and midnight EST, he’s always worth tuning in, and tonight’s segment will cover President Biden’s ongoing flirtation with the (ignorant) idea that cutting tariffs on imports from China will help cool torrid U.S. inflation.

You can listen live at website like this, and as always, if you can’t, I’ll post a link to the podcast as soon as it’s available.

In addition, it was great to be quoted by John’s frequent co-host Gordon G. Chang on the weaponization and balkanization of world food trade that’s resulted from the Ukraine-Russia war. You can read his June 21 Newsweek column on this subject at this link.

Moreover, it was just as gratifying to be cited by Breitbart.com‘s Neil Munro in this piece the same day on the often misunderstood relationship between immigration, wages, and productivity growth. Click here to read.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Back on National Radio Tonight Talking China Tariffs and Inflation…& More!

Tags

Biden, Biden administration, Breitbart.com, CBS Eye on the World with John Batchelor, China, GDP, Gordon G. Chang, inflation, Janet Yellen, John Carney, Making News, tariffs, trade deficit

I’m pleased to announce that I’m scheduled to return tonight to “CBS Eye on the World with John Batchelor.” The segment, slated to air at 11:15 PM EST, will feature John, me, and co-host Gordon G. Chang discussing a bad recent idea that can’t seem to be killed off entirely – proposals to fight lofty U.S. inflation by cutting tariffs on some goods imports from China.

You can listen live at this link, and as usual, I’ll be posting a link to the podcast as soon as one’s available.

In addition, it was great to see my latest post on the trade deficit’s damaging impact on the shrinkage suffered by the U.S. economy in the first quarter of this year cited last Thursday by Breitbart.com‘s John Carney. Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: Are Apple Products “Designed in California…& Extorted by China?”

Tags

Apple Inc., Breitbart.com, China, Donald Trump, economics, forced technology transfer, free trade, globalization, infotech, John Carney, national security, privacy, surveillance, tech, TheInformation.com, Tim Cook, Trade, {What's Left of) Our Economy

You have to give Tim Cook credit for sheer gall, at least if a recent report is true (as it appears to be, since it he hasn’t yet denied it). There was the Apple, Inc. CEO in 2018, at a forum in Beijing no less, in effect warning former President Donald Trump to ditch his plans to impose America’s first ever serious tariffs on Chinese goods, largely because “What I’ve seen over my lifetime is that countries that embrace openness, that embrace trade, that embrace diversity are the countries that do exceptional — and the countries that don’t, don’t.”

And not two years before, according to this account, Cook had promised China that over the next five years, the infotech giant would make a $275 billion effort to strengthen the People’s Republic’s technology and manufacturing base if China’s thug regime would back off a major crackdown it had launched on the company’s massive Chinese operations.

Moreover, as made clear in the December 7 article in TheInformation.com, Cook’s commitments not only have inevitably and massively affected U.S. and China trade and broader economic flows, and will continue to do so going forward. They’re likely to endanger America’s national security. After all, Cook, for reasons having squadoosh to do with free trade or free markets or economic fundamentals, evidently pledged to

>invest “many billions of dollars more” than what the company was already spending annually in China: in part on building new research and development centers”;

>help Chinese manufacturers develop “the most advanced manufacturing technologies” and “support the training of high-quality Chinese talents”;

>collaborate on technology with Chinese universities and directly invest in Chinese tech companies”; and

>collaborate on technology with Chinese universities and directly invest in Chinese tech companies”;

>use more components from Chinese suppliers in its devices”; and 

>give business to Chinese software firms”.

Since every economic and academic entity in China is ultimately under the thumb of the Chinese government, Cook’s submission to Beijng’s pressure has made enormous amounts of resources and knowhow available to a Chinese regime that has challenged American security interests in East Asia and around the world, and that powerfully threatens Washington’s ability to protect Americans’ privacy and political freedoms through its increasingly impressive hacking and other surveillance capabilities (including via the wildly popular TikTok video-sharing app).

In the worst (but ever more plausible) case, in a future conflict with Beijing, Chinese weapons that kill U.S servicemen could be partly and/or indirectly financed and developed by Apple – and, as I’ve made clear, e.g., here and here, by the numerous other U.S. companies that have fueled China’s tech and therefore military prowess.

But also crucial to point out – the deal signed by Cook (far from the only target of China’s successful campaigns of forced tech and manufacturing production transfer over a period stretching back decades), also challenges a core idea of free trade theory in a way first pointed out by friend John Carney of Breitbart.com.

As Carney wrote more than two years ago, economists and others who were crticizing Trump’s tariffs were making an especially important mistake. They were assuming “that all of the goods that are imported from China are made there because China is the lowest cost manufacturer of those goods. If that were true, moving production out of China would necessarily increase costs of production and reduce efficiency.”

But as he proceeded to remind, China couldn’t be such a paragon of manufacturing value. If it were, why would Beijing have been relying for so long on such a wide variety of “mercantilist tactics to attract and retain manufacturing business from global businesses, including requiring companies to manufacture goods in China in order to access its domestic markets and imposing steep tariffs on imports for foreign-made goods”?

In fact, Carney continued, “China’s policies…impose what economists call ‘deadweight losses’ on the global economy by preventing companies from moving their supply chains to cheaper sources.” And tariffs can serve as an essential counter-weight. 

Apple is nothing if not public relations-obsessed, and several years ago responded to public concern about all its production in the People’s Republic with an ad campaign stressing that its products are “designed in California.”  At least for accuracy’s sake, the company should now add “and extorted by China.”  And the news should greatly energize Washington’s efforts to stop U.S. companies from strengthening and enriching this burgoning menace.               

Im-Politic: In Case You Doubt Biden’s Immigration Plans Will Hammer U.S. Wages

Tags

Biden, Biden border crisis, Breitbart.com, budget reconciliation, chain migration, Council of Economic Advisers, demand, economics, Im-Politic, Immigration, Jobs, labor market, labor shortage, migrants, Neil Munro, supply, wages, workers

We’ve just gotten a bright, flashing sign that, despite some recent stopgap steps (like this and this) obviously meant to convey the impression that the Biden administration hasn’t completely and dangerously lost control of America’s southern border, the President is just as determined as ever to open the floodgates to seemingly unlimited numbers of foreigners.

Worse, the development I’m writing about also makes clear that the President cares not a whit about the likely economic harm his policies will inflict on workers legally in the country at present – too many of whom haven’t exactly been killing it economically for decades now.

That sign consists of a post on the White House’s website by the Chair of the President’s Council of Economic Advisers (CEA) and three other government economists touting “The Economic Benefits of Extending Permanent Legal Status to Unauthorized Immigrants.” Just so we’re totally clear on their intent, in plain English, the title would read, “The Economic Benefits of Giving Amnesty to Illegal Aliens.” And the strength of the administration’s Open Borders ambitions is clearest from the utterly threadbare manner in which the authors deal with a central question: whether amnesty would drive down the wages of workers who live in America legally now.

This question of course is especially salient now because, due to the labor market turmoil generated by the CCP Virus pandemic and resulting behavior changes and official responses, U.S. employers are experiencing problems hiring enough workers, and consequently, these workers are enjoying major new leverage in bargaining for higher wages.

As pointed out in the CEA post, “Permanent legal status is likely to increase the effective labor supply of unauthorized immigrants” and that, “Given that providing legal status to unauthorized immigrants would increase their effective labor supply, critics of legalization argue there could be adverse labor market consequences for native and other immigrant workers.”

Here of course is where you’d expect the highly credentialed experts who wrote this post to respond with reams of evidence (or at least citations of scholarly works), decisively proving that, however commonsensical it seems to conclude that increasing the supply of anything (including labor) all else equal will reduce the supply of that thing, it ain’t so in the case of illegal aliens.

But as initially (at least to me) pointed out by Breitbart.com‘s Neil Munro, nothing of the kind happened. Here’s what the CEA said:

“While there is not a large economics literature on the labor market effects of legalization on other workers, in a well-cited National Academies report on the economic and fiscal impact of immigration, a distinguished group of experts concludes that in the longer run, the effect of immigration on wages overall is very small.”

I could write an entire blog post on what’s jaw-droppingly wrong with this sentence’s methodology. Chiefly, it’s not only an appeal to authority – which logically is an implicit confession that the appealers don’t know much themselves about the subject they’re writing about. It’s an appeal to authorities who themselves don’t seem to know much about their subject, or can’t cite any evidence. Therefore they can only offer an evidently unsupported conclusion.

But what’s most important to me about this CEA point is that it never challenges the wages claim made by those “critics of legalization.” All the authors can counter with is a contention that, at some unknown point, the wage depression resulting from amnesty will become “very small.” That’s some comfort to Americans workers today. And for possibly decades.   

Also crucial to point out is how narrow and thus misleading the post’s analytical framework is. It clearly assumes that amnesty won’t stimulate ever greater inflows of foreign laborers who compete against the domestic worker cohort that exists at any given time – which would include the millions of amnestied illegals. Yet everything known about the impact of looser immigration policies – and even official announcements thereof – demonstrates that they exert a powerful magnet effect on other foreigners. Nor do you need to take my word for it. That’s what many migrants themselves have said about the Biden administration’s approach. (See, e.g., here and here.)

The so-called magnet effect of the Biden roll-back of its predecessor’s immigration policies isn’t the only reason to expect the White House’s current approach to supercharge the supply of American workers. To mention just one example, his immigration reform bill and budget reconciliation bill would ease Trump-era limits on “chain migration” – a policy that enables immigrants into the country legally if a spouse, parent, child, or sibling already lives here legally. Further, once these chain migrants arrive, their own relatives receive the same easy entry. And so on. Special bonus: The restrictions on chain migration-related visas granted for employment reasons will be eased even further.

If a better way to keep a huge share of American workers underpaid (especially those in low-wage portions of the economy, which heavily rely on the kinds of low-skill employees who dominate the illegal alien population), let me know. And of course in the cruelest irony of all, as the CEA post shows, among the leading advocates of these wage-hammering measures are the very liberals and progressives that have for decades claimed to be champions of Americans left behind. 

Making News: Quoted on a Navarro Hit Piece and China Political Meddling

Tags

Breitbart.com, Cato Institute, China, election 2020, elections, Mainstream Media, Making News, Peter Navarro, Ted Galen Carpenter, The American Conservative, The National Interest, The Washington Post, Trump

I’m pleased to announce that my views were cited in two major media articles last week.

The first was a Breitbart.com article examining a Washington Post piece on Trump trade and manufacturing adviser Peter Navarro that I dismissed as a by-now-standard Mainstream Media hatchet job.  Here’s the link.

The second was a post in The National Interest by the Cato Institute’s Ted Galen Carpenter (full disclosure – a close personal friend).  It mentions my American Conservative article on China’s widespread and thoroughly under-reported efforts to interfere in U.S. elections and broader politics. Click here to read.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

Making News: National Media Cites on the Virus Vaccine Drive and the Stimulus Package Wrangle

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Breitbart.com, CCP Virus, coronavirus, COVID 19, Heather Long, industrial policy, John Binder, Making News, pharmaceuticals, Seattle Times, stimulus package, The Washington Post, vaccines, Wuhan virus

I’m pleased to announce that my views on two major economic policy issues have just been featured in two leading national news publications.

In his report yesterday on the U.S. government’s efforts to help pharmaceutical companies develop a CCP Virus vaccine, Breitbart.com‘s John Binder included remarks of mine providing perspective on the latest example of what economists call “industrial policy” – team-ups between the public and private sectors to generate technological progress and ensure future U.S. prosperity.  Click here to read the article.

Moreover, last Thursday’s Washington Post piece on the debate over the next U.S. economic stimulus package contained a quote from me urging the Trump administration and Congress to “go big.”  Here’s the link.  The article, by the Post‘s Heather Long, was also reprinted in the Seattle Times on Saturday.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

Making News: Economy Views Quoted in The Guardian & on Breitbart!

Tags

Breitbart.com, Jobs, jobs report, John Carney, manufacturing, NFP, The Guardian

I’m pleased to announce two recent media appearances.  The first came on June 23, when the United Kingdom’s The Guardian newspaper’s survey of “What the experts” were saying about some major reports on manufacturing featured a tweet of mine on the subject.  Here’s the link.

The second came this morning, when Breitbart.com‘s John Carney spotlighted my views on the monthly U.S. jobs figures (for June) that were released today.  Click on this link to read.

And keep checking in with RealityChek for news of upcoming media appearances and other developments

 

(What’s Left of) Our Economy: When Industries Disappear

Tags

apparel, big government, Breitbart.com, conservatves, embroidery, Frances Martel, Immigration, labor unions, manufacturing, New Jersey, skills, textiles, Union City, unions, {What's Left of) Our Economy

Until I read Frances Martel’s “Hanging by a Thread,” I used to think of Union City as little more than one of those bleak-looking smallish northern New Jersey municipalities the Amtrak trains pass through on their way between New York City and points south.  How wrong I was!  And for such wide-ranging policy and political reasons!  

Not that you can’t simply enjoy her long feature for Breitbart.com for the fascinating descriptions of what makes her hometown special geologically (e.g., it sits on lots of Manhattan bedrock-like granite, good for supporting factories with heavy machines and multistory housing) and demographically (because it developed fairly late in the 19^th century, its population was always dominated by immigrants).

Clearly important as well is Martel’s main theme – how manufacturing built solid prosperity for Union City from the get-go, and how its demise, due to developments like (but not restricted to) offshoring-obsessed U.S. trade policies helped bring punishingly hard times. (Full disclosure: Martel interviewed me for the article, and quoted me quite generously.)

But if you’re thinking this is only an article for trade and/or manufacturing mavens, or for New Jersey history aficionadoes, you’re sorely mistaken. For along the way, “Hanging by a Thread” offers important insights into how these closely related subjects profoundly affect many of the nation’s other major issues and challenges.

For example, Martel offers a novel twist on the notion that the United States welcomed so many immigrants so consistently (though not always) from the mid-19^th century onwards in particular because of its urgent need for unskilled labor. No doubt most of the newcomers were poorly educated. But as “Hanging” makes clear, industry during this period used lots of complicated machinery, including the embroidery sector that became concentrated in Union City.

As Union City’s official historian told Martel, many of its first immigrants came from Germany, Switzerland, Austria, and other parts of Europe with major textile industries, and brought with them extensive experience working with such devices that employers clearly found valuable.

Since skills (of different kinds, of course) remain so crucial to economic success today, Union City’s past raises the question of whether – as Open Borders advocates seem to believe – the United States today should indiscriminately welcome immigrants regardless of skill levels and gainful employability.

Two other messages coming through loud and clear from Martel’s research and analysis are especially important for conservatives to heed. The first has to do with unions. Martel’s parents were hard-line anti-communists who fled Castro’s Cuba, and her mother worked in apparel. The author explains that these arrangements were seen as “a critical part of the factory ecosystem.” The following exchange, with her mother speaking first, makes the point vividly:

“‘I have always had a good union. It works, I think. It works to have a union because without a union, in a private place, you’re screwed,’ she told me.

“‘You don’t feel that there is a conflict between that and being a capitalist?’” I asked…..

“‘No. What? Being a capitalist? No,’ she replied, with confusion. ‘No, that has nothing to do with socialism, it’s just so that the worker has someone to defend them. If you don’t have a job, they can fire you whenever. That’s not fair. To throw you out for no reason, it’s unfair ifyou are working well.’”

Martel’s second message for conservatives actually echoes a point I’ve made before (e.g., here): The more enthusiastically traditional free trade policies are pursued by American leaders, the bigger government’s going to get. But as Martel makes clear, these approaches to the global economy are bound to generate needs that far exceed the kinds of welfare state benefits (ranging from income support to heavily subsidized healthcare) used to keep living standards above third world levels (or at least try to do so).

As the Union City example shows, relentless globalization can also turbocharge government’s role in economic development itself. The author explains that, since 2000, Union City Mayor Bob Stack (a big-city machine politician if ever there was one)

“took the reins on the eve of the guillotine falling on embroidery and has taken to meticulously rebuilding the identity of the city. He tore down Roosevelt Stadium, the sports venue at the heart of the city, to build a new Union City High School – with a stadium on the roof. Union City previously boasted two high schools, one for Union Hill and one for West Hoboken, that Stack turned into middle schools. He built parks in honor of the city’s Cuban, Colombian, and Dominican populations, and an ‘International Park.’ Seemingly every other street has a water park open in the summer for children to play in – the biggest, Firefighters’ Memorial Park, boasts an Olympic-sized swimming pool. His administration also refurbished the downtown library into the Musto Cultural Center and built its replacement, the library at José Martí Middle School (which his administration also built), in the shadow of what was once St. Michael’s monastery, an imposing Catholic historic site that now houses a Korean Presbyterian congregation.”

In other words, Union City realistically recognized the choices before it, and rejected “the option much of the Rust Belt took: do nothing, abandon ship, hope the invisible hand swoops in before you hit the concrete.” As a result (and also because of its proximity to New York City), it’s more than avoided the ghost town fates of counterparts like Gary, Indiana, Youngstown, Ohio, and Detroit, Michigan.

Making News: Appearances on IndustryToday.com, in The Epoch Times…& More!

Tags

Barack Obama, Breitbart News Tonight, Breitbart.com, IndustryToday.com, John Carney, Making News, The Epoch Times, Tom Ozimek, Trade, Trump, White House Council of Economic Advisers

I’m pleased to announce some new media appearances over the last week or so.

Just today, IndustryToday.com reprinted this morning’s report on the U.S. economy’s biggest exporters and importers for 2019, and how these results compare with that of 2016, the last year of the Obama administration – which not so coincidentally was also the last year of the U.S. trade policies that President Trump is seeking to overhaul.  Here’s the link.

Yesterday, Tom Ozimek of The Epoch Times quoted my views on the latest annual report of the White House Council of Economic Advisers – and on how the Trump economy has differed so far from the Obama economy.  You can read his piece here.

On February 12, Tom devoted an entire article to my first analysis of the final 2019 full-year U.S. trade figures.  Click on this link to read.

This past Wedensday night, I was interviewed on Breitbart News Tonight on Sirius XM Patriot radio on the impact of the coronavirus on the Chinese, U.S., and global economies.  To listen, click here, and then scroll down till you see my name for a February 19 segment.

On Valentine’s Day, Breitbart.com‘s John Carney cited my explanation for some of American manufacturing’s output performance in January.  Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.