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. 

 

 

(What’s Left of) Our Economy: You Bet that Mass Immigration Makes America Less Productive

Tags

amnesty, Bureau of Labor Statistics, construction, demand, Donald Trump, economics, Forward.us, hotels, illegal aliens, immigrants, Immigration, labor productivity, productivity, restaurants, supply, total factor productivity, wages, {What's Left of) Our Economy

An archetypical Washington, D.C. swamp denizen thought he caught me with my accuracy pants down the other day. Last Sunday’s post restated a point I’ve made repeatedly – that when countries let in too many immigrants, their economies tend to suffer lasting damage because businesses lose their incentives to improve their productivity – the best recipe for raising living standards on a sustainable, and not bubble-ized basis, as well as for boosting employment on net by fostering more business for most existing industries and enabling the creation of entirely new industries.

The reason mass immigration kneecaps productivity growth? Employers never need to respond to rising wages caused by labor shortages by buying labor-saving machinery and technology or otherwise boost their efficiency. Instead, they continue the much easier and cheaper approach of hiring workers whose pay remains meager because immigrants keep swelling the workforce.

It’s a point, as I’ve noted, strongly supported by economic theory and, more important, by evidence. But Todd Schulte, who heads a Washington, D.C.-based lobby group called Forward.us, wasn’t buying it. According to Schulte, whose organization was founded by tech companies like Facebook with strong vested interests in keeping U.S. wages low, “the decade of actual [U.S.] productivity increases came directly after the 1986 legalization AND 1990 legal immigration expansion!”

He continued on Twitter, “giving people legal status and… expanding legal immigration absolutely has not harmed productivity in the last few decades in the US.”

So I decided to dive deeper into the official U.S. data, and what I found was that although there are bigger gaps in the productivity numbers than I’d like to see, there’s (1) no evidence that high immigration levels following the 1986 amnesty granted by Washington to illegal immigrants and the resulting immigration increase mentioned by Schulte improved the national productivity picture over the pre-amnesty period; and (2) there’s lots of evidence that subsequent strong inflows of illegal immigrants (who Schulte and his bosses would like to see amnestied) have dragged big-time on productivity growth.

First, let’s examine the productivity of the pre-1986 amnesty decades, which provides the crucial context that Schulte’s claim overlooks.

According to U.S. Bureau of Labor Statistics figures, during the 1950s, a very low immigration decade (as shown by the chart below), labor productivity grew by an average of 2.63 percent annually. Significantly, this timespan includes two recessions, when productivity normally falls or grows unusually slowly.

Figure 1. Size and Share of the Foreign-Born Population in the United States, 1850-2019

During the 1960s expansion (i.e., a period with no recessions), when immigration levels were also low, the rate of labor productivity growth sped up to an annual average of 3.26 percent.

The 1970s were another low immigration decade, and average labor productivity growth sank to 1.87 percent. But as I and many other readers are old enough to remember, the 1970s were a terrible economic decade, plagued overall by stagflation. So it’s tough to connect its poor productivity performance with its immigration levels.

Now we come to the 1980s. Its expansion (and as known by RealityChek regulars, comparing economic performance during like periods in a business cycle produces the most valid results), lasted from December, 1982 to July, 1990, and saw average annual labor productivity growth bounce back to 2.24 percent.

As noted by Schulte, immigration policy changed dramatically in 1986, and as the above chart makes clear, the actual immigant population took off.

But did labor productivity growth take off, too? As that used car commercial would put it, “Not exactly.” From the expansion’s start in the first quarter of 1982 to the fourth quarter of 1986 (the amnesty bill became law in November), labor productivity growth totalled 10.96 percent. But from the first quarter of 1987 to the third quarter of 1990 (the expansion’s end), the total labor productivity increase had slowed – to 5.76 percent.

The 1980s are important for two other reasons as well. Nineteen eighty-seven is when the Bureau of Labor Statistics began collecting labor productivity data for many U.S. industries, and when it began tracking productivity according to a broader measure – total factor productivity, which tries to measure efficiency gains resulting from a wide range of inputs other than hours put in by workers.

There’s no labor productivity data kept for construction (an illegal immigrant-heavy sector whose poor productivity performance is admitted by the sector itself). But these figures do exist for another broad sector heavily reliant on illegals: accommodation and food services. And from 1987 to 1990 (only annual results are available), labor productivity in these businesses increased by a total of 3.45 percent – worse than the increase for the economy as a whole.

On the total factor productivity front, between 1987 and 1990 (again, quarterly numbers aren’t available), it rose by 1.23 percent for the entire economy, for the construction industry it fell by 1.37 percent, for the accommodation sector, it fell by 2.30 percent, and for food and drinking places, it increased by 2.26 percent. So only limited evidence here that amnesty and a bigger immigrant labor pool did much for U.S. productivity.

As Schulte pointed out, the 1990s, dominated by a long expansion, were a good productivity decade for the United States, with labor productivity reaching 2.58 percent average annual growth and total factor productivity rising by 10.87 percent overall. But when it comes to labor productivity, the nineties still fell short of the 1950s (even with its two recessions) and by a wider margin of the 1960s.

But did robust immigration help? Certainly not in terms of labor productivity. In accommodation and food services, it advanced by just 0.84 percent per year on average.

Nor as measured by total factor productivity. For construction, it actually dropped overall by 4.94 percent. And although it climbed in two other big illegal immigrant-using industries, the growth was slower than for the economy as a whole (7.17 percent for accommodation and 5.17 percent for restaurants and bars).

Following an eight month recession, the economy engineered another recovery at the end of 2001 that lasted until the end of 2007. This period was marked by such high legal and illegal immigration levels that the latter felt confident enough to stage large protests (which included their supporters in the legal immigrant and immigration activist communities) demanding a series of new rights and a reduction in U.S. immigration deportation and other control policies.

Average annual labor productivity during this expansion grew somewhat faster than during its 1990s predecessor – 2.69 percent. But annual average labor productivity growth for the accommodation and food services sectors slowed to 1.19 percent, overall total factor productivity growth fell to 1.19 percent, and average annual total factor productivity changes in accommodations, restaurants, and construcion dropped as well – to 6.36 percent, 2.67 percent, and -9.08 percent, respectively.

Needless to say, productivity grows or shrinks for many different reasons. But nothing in the data show that immigration has bolstered either form of productivity, especially when.pre- and post-amnesty results are compared. In fact, since the 1990s, the greater the total immigrant population, the more both kinds of productivity growth deteriorated for industries relying heavily on illegals. And all the available figures make clear that these sectors have been serious productivity laggards to begin with.

And don’t forget the abundant indirect evidence linking productivity trends to automation – specifically, all the examples I’ve cited in last Sunday’s post and elsewhere of illegal immigrant-reliant industries automating operations ever faster — and precisely to offset the pace-setting wage increases enjoyed by the lowest income workers at least partly because former President Trump’s restrictive policies curbed immigration inflows so effectively. 

In other words, in the real world, changes in supply and demand profoundly affect prices and productivity levels – whatever hokum on the subject is concocted by special interest mouthpieces who work the Swamp World like Todd Schulte.

(What’s Left of) Our Economy: Everything You Wanted to Know About Immigration & the Economy — & Less

Tags

economics, immigrants, Immigration, innovation, labor shortages, Open Borders, productivity, The Washington Post, wages, {What's Left of) Our Economy

Leave it to the zealously pro-Open Borders Washington Post. It chose as the reviewer of a book by two economic historians apparently unaware of the relationship in U.S. history between immigration levels and productivity improvement a business professor seemingly just slightly less clueless about this crucial link either historically and going forward.

Doubt that? Then take a look at this morning’s rave by Harvard business professor Michael Luca about a new study by Ran Abramitzky and Leah Boustan of Stanford and Princeton Universities, respectively, titled Streets of Gold: America’s Untold Story of Immigrant Success.

According to Luca, Streets of Gold “reflects an ongoing renaissance in the field of economic history fueled by technological advances — an increase in digitized records, new techniques to analyze them and the launch of platforms such as Ancestry — that are breathing new life into a range of long-standing questions about immigration. Abramitzky and Boustan are masters of this craft, and they creatively leverage the evolving data landscape to deepen our understanding of the past and present.”

And their overall conclusion (which rightly takes into account the non-economic contributions of immigrants to American life) is that (in Abamitzky’s and Boustan’s words): “Immigration contributes to a flourishing American society” – especially if you take “the long view.”

But there’s no indication in Luca’s review that the authors weigh in on a key (especially in the long view) impact of immigration on the U.S. economy – how it’s affected the progress made by the nation in boosting productivity: its best guarantee for raising living standards on a sustainable basis.

As I’ve written repeatedly, mainstream economic theory holds that one major spur to satisfactory productivity growth is the natural tendency of businesses to replace workers with various types of machinery and new technologies when those workers become too expensive. Most economists would add that although jobs may be lost on net in the short-term, they increase further down the road once these productivity advances create new companies, entire industries, and therefore employment opportunities.

By contrast, when businesses know that wages will stay low – for example, because large immigration inflows will keep pumping up the national labor supply much faster than the demand for workers rises – these companies will feel little need to buy new machinery or otherwise incorporate new technologies simply because they won’t have to.

And more important than what the theory says, abundant evidence indicates that businesses have behaved precisely this way in the past (when scarce and thus increasingly expensive labor prompted acquisitions of labor-saving devices that helped turn the United States into an economic and technology powerhouse), into the present (as industries heavily dependent on penny-wage and often illegal immigrant labor have tended to be major productivity laggards).  

Reviewer Luca demonstrates some awareness that this issue matters in the here and now and going forward, writing that “Compared with the rest of the country, businesses in high-immigration areas have access to more workers and hence less incentive to invest in further automation.”

He also points out that “This has implications for today’s immigration debates.”

But his treatment of the current situation is confused at best and perverse at worst (at least if you buy the economic conventional wisdom and evidence concerning the productivity-immigration relationship).

Principally, he claims that “the United States is expected to face a dramatic labor market shortage as baby boomers retire and lower birthrates over time result in fewer young people to replace them.” Let’s assume that’s true – despite all the evidence that more and more employers are filling all the job openings they’ve been claiming by automating. (See, e.g., here, here, and here.)

Why, though , does Luca simply conclude that “Increased immigration is one approach to avoiding the crunch. Notably, the other way to avert this crisis is through further automation, enabled by rapid advances in artificial intelligence. Immigration policy will help shape the extent to which the economy relies on people vs. machines in the decades to come.”

Is he really implying that a low-productivity — and therefore low-innovation — future would be a perfectly fine one for immigration (and other) policymakers to be seeking?

Just as important, although Luca clearly recognizes that these questions have at least some importance nowadays, he provides no indication of where the book’s authors stand.

So let the reader beware. Luca clearly believes, as Post headline writers claim, that Streets of Gold makes clear “What the research really says about American immigration.”  What his review makes clear is that this claim isn’t even close.

   

Those Stubborn Facts: Yes, Biden Really Has Opened the Border

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Biden administration, Biden border crisis, border security, illegal immigration, immigrants, Immigration, migrants, Open Borders, Those Stubborn Facts

“We preliminarily estimate that illegal immigrants accounted for two-thirds of the growth in the foreign-born population since January 2021 — 1.35 million.”

– Center for Immigration Studies, June 1, 2022

 

Average monthly growth in U.S. foreign-born population during first Obama administration term: 59,000

Average monthly growth in U.S. foreign-born population during second Obama administration term: 76,000

Average monthly growth in U.S. foreign-born population during Trump pre-CCP Virus years: 42,000

Average monthly growth in U.S. foreign-born population sofar during Biden administration: 132,000

 

(“Foreign-Born Population Hit Record 47 Million in April 2022,” by Steven A. Camarota and Karen Ziegler, Center for Immigration Studies, June 1, 2022, https://cis.org/Report/ForeignBorn-Population-Hit-Record-47-Million-April-2022%29)

(What’s Left of) Our Economy: Pro-Immigration Labor Shortage Claims Keep Going Up as Real Wages Keep Going Down

Tags

compensation, Employment Cost Index, immigrants, Immigration, inflation, inflation-adjusted wages, Labor Department, labor shortage, productivity, wages, Washington Post, workers, {What's Left of) Our Economy

It’s as if the Open Borders Lobby – both its conservative and liberal wings – has recently decided that it’s really had enough of labor market tightness that’s due to reduced immigration, and that’s also giving so many of America’s workers a long-needed pay raise. So it’s been re-upping the pressure to open the floodgates once again and solve this terrible problem. (See, e.g., here, here, and here.)

As is so often the case, the Open Borders-happy Washington Post editorial board has made the case most succinctly: “[C]ompanies are frantically trying to hire enough workers to keep up with the surge in demand for everything from waffle irons to cars. The nation has more than 11 million job openings and 6 million unemployed.

“This imbalance is giving workers and job seekers tremendous power. Pay is rising at the fastest pace in years….”

Yet this claim is not only profoundly anti-American worker. It’s completely false – at least if you look at the only measures of pay that reveal anything about whether employees are getting ahead or not. And they’re of course the compensation measures adjusted for inflation.

What do they show? Between 2020 and 2021, inflation-adjusted hourly pay for all U.S. workers in the private sector were down by 2.10 percent and for blue-collar workers by 1.52 percent. (As known by RealityChek regulars, the U.S. Labor Department that tracks pay trends for the federal government doesn’t monitor any type of compensation for public sector workers because their wages and salaries and benefits are determined largely by politicians’ decisions, not the forces of supply and demand. As a result, they’re thought to say little about the labor market’s true strengths or weaknesses.)

Do you know when such wages have fallen by that much? Try “never” for the entire workforce (where the Labor Department data go back to 2006), and for blue collar workers, several times during the 1970s, which were a terrible time for the economy overall. (For this group, the official numbers go back to 1964).

But haven’t better benefits compensated? Two Labor Department data sets do measure changes in all forms of compensation. The best known, and the one most closely followed by the Federal Reserve and leading economists everywhere, is the Employment Cost Index (ECI). It covers state and local government (though not federal) employees as well as private sector workers. But there’s no evidence of any inflation-adjusted gains for the nation’s workforce – much less outsized gains – from these statistics either.

From the fourth quarter of 2020 to the fourth quarter of 2021, this index did increase by 4.37 percent for all covered workers (breakouts for white- and blue-collar employees only go up to 2006). Yet during this period, the Labor Department’s inflation measure, the Consumer Price Index, was up 7.42 percent. That’s called “falling behind” in my book.

When business (and government on the state and local levels) starts offering pay that’s rising higher than the inflation rate, then Americans as a whole can start worrying about genuine labor shortages. (And even then, as I’ve written, it would be much better for the economy as a whole if companies responded by boosting their productivity, rather than by agitating for more mass immigation with the aim of driving wages down and of course dodging any incentives to operate more efficiently.) For now, though, it’s obvious that what U.S. business is “frantic” about (to use the Post‘s term) isn’t a shortage of workers. It’s a shortage of cheap workers.

Glad I Didn’t Say That! Border, Shmorder?

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amnesty, Biden administration, Biden border crisis, border, Glad I Didn't Say That!, immigrants, Immigration, Kamala Harris, migrants, Open Borders

“Vice President Kamala Harris pushes back on criticism for not

visiting the US-Mexico border”

– USAToday, June 8, 2021

“Kamala Harris to make first trip to the border as vice president this

week”

– CNN, June 23, 2021

 

(Sources: “Vice President Kamala Harris pushes back on criticism for not visiting the US-Mexico border,” by Rebecca Morin, USAToday, June 8, 2021, https://www.usatoday.com/story/news/politics/2021/06/08/kamala-harris-lester-holt-interview-pushes-back-border-criticism/7600802002/ and “Kamala Harris to make first trip to border as vice president this week,” by Jasmine Wright and Priscilla Alvarez, CNN, June 23, 2021, https://edition.cnn.com/2021/06/23/politics/kamala-harris-going-to-the-order/index.html)

 

Im-Politic: Biden’s Latest Americans Last Immigration Policy

Tags

America First, Biden, Border Crisis, border security, Central America, Chobani, cities, corruption, crime, El Salvador, foreign aid, gang violence, governance, Guatemala, Honduras, Im-Politic, immigrants, Immigration, inequality, Kamala Harris, Mastercard, Microsoft, migrants, Northern Triangle, racial economic justice, urban poverty

As known by RealityChek regulars, I’m deeply skeptical that the Biden administration can bring migrant flows from Central America (or similar regions) under control by adequately improving the miserable local conditions that (understandably) drive so much flight northward to begin with. But the first detailed description of this policy that I’ve seen not only ignores all of the intertwined institutional, governance, and cultural obstacles to turning regions like Central America’s Northern Triangle (El Salvador, Guatemala, and Honduras) into even approximations of success stories. It also casts real doubt on the seriousness of the vaunted domestic social justice and inequality commitments made both by President Biden and by at least some of the U.S. corporate sector.

As argued by a White House Fact Sheet released yesterday, support for economic development in these long-impoverished, abusively ruled countries will “require more than just the resources of the U.S. government.” Also essential “to support inclusive economic growth in the Northern Triangle” will be the “unique resources and expertise” of the private sector.”

It’s true that only three completely private, profit-seeking American companies have responded so far to the “Call to Action” for business involvement issued by Vice President Kamala Harris, who’s the administration’s designated czarina for dealing immigration-wise with the Northern Triangle. But let’s say lots more get involved.

Why would anyone capable of adult thinking believe that their efforts will succeed? After all, the administration acknowledges that economic success in the region depends on overcoming its “long-standing impediments to investment-led growth.” And it specifies that these obstacles include governments that simultaneously either can’t or won’t carry out their duties in corruption-free ways, and are unable to provide minimal levels of security for their populations against criminal gangs.

Meaning that private businesses will be keen even on setting up the kinds of training and business incubator and internet connectivity programs that predominate in their Northern Triangle plans while threats of violence and extortion remain omnipresent? Maybe they’re planning to cope by hiring massive  private security forces – but such precautions were never mentioned in the Call to Action announcement.

Just as important, here’s another major head-scratcher, especially given the flood of promises over the last year or so from U.S. business circles about promoting racial economic and financial equality. If companies are willing to wade into dangerous environments to educate populations, build or strengthen the infrastructure needed for significant economic progress, and foster new businesses in Central America, why aren’t they focusing their efforts on America’s own inner cities, or at least focusing more tightly on these efforts first? It’s not like their needs aren’t pressing. And although the Northern Triangle countries have actually made some noteworthy progress in fighting violent crime lately, they’re still much more dangerous places than even most of America’s homicide capitals.

Consequently, for companies concerned overall with actual results, it would make far more sense to take an America First approach. Not that Microsoft, Chobani, and Mastercard have ignored their disadvantaged compatriots in practice. But even as their U.S. efforts remain pretty modest (Microsoft, e.g., to date has only launched its digital skills and access improvement program in Atlanta and Texas, and Chobani’s incubator program still seems pretty small scale), they’ve decided to head south of the border(s).

Incidentally, the entire Biden Central America and overall immigration policies are vulnerable to a similar criticism. Since however difficult it’s going to be to spur racial and other economic and social progress at home, the challenge will be far more difficult in foreign countries, a President truly committed both to these vital domestic goals and to staunching migrant flows would focus focus his economic development programs on his own country, and deal with the migrants as an immigration issue – by securing the border. Unfortunately for Americans, Joe Biden has been anything but that President.

(What’s Left of) Our Economy: Is More Immigration Really the Key to America’s Tech Future?

Tags

Cato Institute, China, education, entrepreneurs, Germany, H-1B visa, immigrants, Immigration, India, innovation, Israel, Japan, skills, South Korea, start-ups, Taiwan, technology, Washington Post, Worldometers.info, {What's Left of) Our Economy

One of the most compelling – and most often made – arguments in favor of higher U.S. legal immigration levels has to do with innovation. Supposedly, without encouraging ever more foreign workers to move to America, the nation will never be able to maintain its global technology leadership, and ultimately an acceptable, much less improved, degree of prosperity. (See, e.g., here and here.)

Part of the rationale for a welcoming posture, as indicated above, has to do with policies toward highly skilled and educated immigrants in particular (like those admitted under the H-1B program), and the special visa quotas allotted to them. But as the Washington Post editorial board recently made clear, there’s a more general view that immigration is especially good at providing America with “a steady supply of working-age strivers” and that “This nation’s prosperity, pluck, ambition and effervescent character are the products of more than 100 million immigrants who have sought better lives in the United States since its founding.” In other words, immigrants are far more likely than the native-born population to possess the risk-taking and general entrepreneurial traits that lead to so much technological progress.

I’ve already debunked one aspect of these claims here, but because they keep popping up, I keep thinking more about them, and have come across more data that not only casts further doubt on the technology-related need for more immigrants, but that indicate that the immigration cheerleaders are putting the cart before the horse.

For instance, it’s widely agreed that the U.S. tech sector is considerably healthier than Germany’s. In this vein, a widely followed global innovation index issued each year by a United Nations agency ranks the former third in the world and the latter ninth. Ninth isn’t so bad, but it’s at the least curious in this regard that for decades at least, Germany has admitted many more immigrants as a share of total population than has the United States.

Indeed, in 1990 (a good starting point, since current Germany came into being with the reunification that year of the former Federal Republic that comprised the nation’s western part and the former Communist run east), Germany’s immigrant inflow of 1.256 million represented 1.59 percent of the new country’s 79.054 million inhabitants. The 1.536 million green cards awarded by the United States that year accounted for only 0.60 percent of its 252.120 million people. (My official sources for German and U.S. annual immigration totals are here and here, respectively. For population, I used the reliable Worldometers.info website.)

But maybe Germany has made up some ground on the United States during this nearly three-decade period? Not according to this study last year from the Cato Institute – one of America’s foremost supporters of much more lenient U.S. immigration policies. If you look at Figure 2, you see that in 2018, Germany was lagging the United States just about as badly in the number of patents it received in the United States (still the world’s most important market for technology) as it was in 1990.

There doesn’t seem to be much evidence that its relatively large immigration inflows have given Germany much of an edge in entrepreneurship, either. As of 2019, according to this source, Germany’s business start-up rate was less than half that of the United States.

This chart, moreover, makes clear that it’s not just the U.S.-Germany comparison that mucks up the ostensible relationship between tech prowess and entrepreneurship on the one hand, and immigration levels on the other. After all, in 2019, India’s start-up rate was also much higher than Germany’s – even though India is much better known for sending folks abroad than for attracting them. Foreigners aren’t exactly flocking to live in China, either, yet its start-up rate matches Germany’s.

That Cato Institute study provides more complicating international comparisons. That Figure 2 shows that as of 2018, Israel has forged into the lead as the country receiving the largest number of U.S. patents. And its performance started taking off in the mid-1990s. Yet in 1995, when Germany and Israel were roughly on a par in their ability to receive American patents, the 76,361 immigrants Israel admitted in 1995 equalled 1.36 percent of its population of 5.619 million – not far from relatively un-innovative Germany’s figures. By the time it became the international leader, Israel’s immigration rate had fallen to 0.32 percent of its 8.972 million population – much lower than that of Germany, which had become a clear als-ran on the U.S. patent scene – and roughly the same as the recent U.S. rate which has been decried as so woefully inadequate.

And look at the other top performers in Figure 2 other than the United States and Israel. Taiwan hasn’t been anything close to an immigration magnet, either, and ditto for South Korea. As for Japan, it’s long been known as one of the most xenophobic countries in the world (as noted in that Washington Post editorial).

What do the non-U.S. “patent tigers” identified by Cato have in common? As author Jonathan M. Barnett puts it:

“Short on consumers, resources, and labor (and saddled with geographic separation from key consumer markets), the patent tigers (especially Israel and Taiwan) were compelled to specialize in innovation-intensive segments of the global supply chain in which ingenuity, rather than labor or natural resources, conferred a competitive advantage.”

As a result, as widely agreed, they’ve worked hard to create top-notch educational systems for their own populations. German education is highly regarded, too, but it’s often observed that its history and culture in particular have discouraged self-starters.

The lessons for the United States seem pretty clear here.  On the one hand, it’s got lots of the overall population, raw materials and domestic markets that the patent tigers lack.  On the other, unlike Germany, it still enjoys an entrepreneur- and innovation-friendly culture.  If Americans did a much better job of educating their own people, especially in the math, science, and technology fields, they should be able to keep its global technology edge even while controlling immigration more tightly. 

If, however, the nation continues to coddle underperforming school systems, especially at the primary and secondary levels, the argument for relying on immigration to fill the tech gap will look all the stronger.  And in a supreme irony, the ready availability of highly skilled and educated immigrants will keep reducing national incentives to get the national education act together.      

Those Stubborn Facts: Immigration Excuse-Making for California

Tags

Associated Press, Barack Obama, California, Donald Trump, green card holders, green cards, immigrants, Immigration, legal immigration, Mainstream Media, MSM, Those Stubborn Facts

California’s “immigration decline has been particularly fast in the past half decade as President Donald Trump’s administration sharply reduced the number of people legally entering the United States.”

– Associated Press, April 24, 2021

 

Average annual grants of legal permanent U.S. resident status to

immigrants, Trump years: 1,085,181

 

Average annual grants of legal permanent U.S. resident status to

immigrants, second Obama term: 1,060,402

 

(Sources: “Awaiting census count, California ponders slow growth future,” by Kathleen Ronayne, Associated Press, April 24, 2021, Awaiting census count, California ponders slow growth future (apnews.com) & “Table 1. Persons Obtaining Lawful Permanent Resident Status: Fiscal Years 1820 to 2019,” Yearbook 2019, Yearbook of Immigration Statistics, Immigration Data and Statistics, Department of Homeland Security, Table 1. Persons Obtaining Lawful Permanent Resident Status: Fiscal Years 1820 to 2019 | Homeland Security (dhs.gov))

Im-Politic: Can Biden Really Solve the “Root Causes” Behind His Border Crisis?

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Biden, Border Crisis, border security, CAFTA, Central America, Central America Free Trade Agreement, Colbert I. King, Cold War, Donald Trump, El Salvador, foreign aid, George W. Bush, globalism, Guatemala, Honduras, Im-Politic, immigrants, Immigration, Jorge Castaneda, Kamala Harris, Lawence E. Harrison, migrants, Northern Triangle, race to the bottom, Trade, Washington Post

One of the time-honored practices – and myths – behind globalist U.S. foreign policies has been its faith that turmoil in various parts of the world that allegedly threatens American interests can be either eliminated or reduced to manageable levels with enough foreign aid. The idea is that such assistance will address the social and economic problems thought to be mainly to blame for the instability. So it’s no surprise that the globalist Biden administration has decided that aid programs are the keys to bringing immigration from Central America under control – though not of course right away.

As stated by Vice President Kamala Harris upon being tasked by President Biden to oversee U.S. effort to turn the counties of the region’s “Northern Triangle” into places whose populations won’t be determined to leave, the United States “must address the root causes that cause people to make the trek” northward.

That’s why I sure hope she reads Colbert I. King’s column in Tuesday’s Washington Post before she rolls up her sleeves too far. For as the author notes, the Biden administration plan to turn the Northern Triangle countries (El Salvador, Guatemala, and Honduras) from clearly failed states into (reasonable) success stories isn’t exactly new in its essentials.

And especially in recent years, when conditions in the region ostensibly worsened dramatically, and therefore fueled especially big migrants flows, there’s been no shortage of U.S. aid, especially considering the tiny size of the three economies.

As King details,

“Congress appropriated more than $3.6 billion to fund a Strategy for Engagement in Central America program between 2016 and 2021. The money was supposed to strengthen rule of law, improve the administration of justice, promote economic prosperity, prevent violence and combat gangs, and empower youth and women.

“>In fiscal 2021 alone, U.S. funding amounted to $505.9 million.

“>Between 2013 and 2018, The U.S. Agriculture Department allocated $407 million to Central America to provide school meals, nutritional programs for women, infants and children, and to train and provide technical assistance to improve agricultural productivity.

“>The Obama administration asked for money to help the region in fiscal 2016, and Congress appropriated $750 million, requiring the countries to improve border security, combat corruption and address human rights concerns.”

Then the author – properly – proceeds to ask “What happened to it all?” And what can the Biden administration do to make sure that the $4 billion it plans to spend in the region will work any better if Congress approves this sum?

Moreover, the case against more Central America aid as a Border Crisis game changer is actually stronger than King describes. Because Washington has not only been pouring money into the region for decades. It’s also granted these three Central American countries (and their regional neighbors) tariff cuts and other trade-related assistance aimed at enabling them to export their way to prosperity.

Indeed, as then President George W. Bush declared while lobbying for passage of the Central America Free Trade Agreement (CAFTA) – which was eventually expanded to include the Dominican Republic,

“People have got to understand that by promoting policy that will help generate wealth in Central America, we’re promoting policy that will mean someone is less–more likely to stay at home to find a job. If you’re concerned about immigration to this country, then you must understand that CAFTA and the benefits of CAFTA will help create new opportunity in Central American countries, which will mean someone will be able to find good work at home, somebody will be able to provide for their family at home, as opposed to having to make the long trip to the United States. CAFTA is good immigration policy as well as good trade policy.”

Critics can reasonably argue that these U.S. programs failed to achieve their immigration aims because they were poorly designed. On the aid front, it’s true that too much of the assistance provided by the United States during the Cold War was military or other security assistance that largely helped corrupt governments repress their own people – and fight rebels labeled as tools of the Soviet Union and Cuba.

When it comes to trade, globalist U.S. Presidents did Central America no favors, either. For CAFTA simply plunged the region into a frantic race to the bottom in wages and worker safety that had been sparked by the decision to free up trade indiscriminately with all the very low-income countries (including China, India, and Bangladesh) that also produced the apparel products that have represented Central America’s best hope for prospering via globalization.

At the same time, significant U.S. assistance for Central America continued after the Cold War’s end, and more was targeted at economic development. And the Biden administration has said nothing about U.S. trade policy reforms that actually would give the Northern Triangle – or the rest of Central America for that matter, or Mexico – major legs up on non-Western Hemisphere competitors.

All of which could support the conclusion that no amount of aid or trade breaks can make Central America successful. A globalist administration will be particularly loathe to accept this admittedly depressing proposition, but there’s abundant evidence in its favor. The work of development economist Lawrence E. Harrison, to cite one leading example, has compellingly argued that some counties – and entire regions – simply don’t have what it takes to achieve economic success because of the cultures they’ve evolved.

At the same time, as my friend – and noted political scientist and former Mexican Foreign Minister Jorge Castaneda – has argued, the Central American economies are so small that enough smartly spent U.S. money might be able to overcome even these deep-rooted obstacles.

I can’t say that I know the answer. But the analyses of King, Harrison, and Castaneda all point to the overarching conclusion that the kind of business-as-usual version of the address-the-root-causes of Central America’s failings being contemplated by the Biden administration can’t possibly stem the migrant flow. Moreover, until genuinely promising plans are developed, there will be no substitute for re-securing the border by reinstating the type of Trump-ian controls that minimize the strength of the U.S. magnets that influence migrant flows as surely as the problems of sending countries.