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

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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. 

 

 

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Im-Politic: Fakeonomics on Illegal Immigration From CNN

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California, CNN, illegal immigrants, illegal immigration, Im-Politic, Immigration, Octavio Blanco, Sanctuary State, taxes, welfare

When I was learning the journalistic ropes, one of the first lessons taught was never to present a piece of information totally devoid of context. So, for example, if you were writing about how much a national economy grew during a given time period, you’d also include something about how that growth compared with that country’s past performance, or with the performance of other countries. How else could the reader take anything useful away from such a report?

Apparently, however, CNN doesn’t always follow this practice. Or maybe more accurately, it doesn’t follow this practice when it covers immigration issues, and especially when even minimal context would cast doubt on widespread claims that America’s illegal immigrants are so valuable that Trump-like restrictionist policies are tantamount to economic suicide. How else could one interpret the May 18 post by Octavio Blanco on new legislation aimed at establishing California as a sanctuary state?

Blanco, for example, properly reported the claim of the bill’s sponsor that the illegal workforce “contributes some $180 billion to the state’s GDP.” I’d have liked some verification of this figure, or even a source, but at least Blanco associated the contention with a figure who’s clearly taken one side of the issue.

Other omissions are less justifiable. Is this a net figure? That is, does it include any costs resulting from the state’s illegal workforce, or families of these workers? The author doesn’t say. And what about some perspective about that $180 billion figure? Obviously the legislator who fed it to Blanco hoped to convey the impression that it’s a staggering sum. Yet it begs the question of how big that state GDP actually is. According to the U.S. Commerce Department, last year, it was a little over $2.6 trillion (unadjusted for inflation – and that took me four seconds to look up.) So if the $180 billion is unadjusted for inflation as well (something else the author doesn’t tell us), the illegal immigrant share is about 8.2 percent.

That still sounds like a lot. Except as the author also notes, another source pegs illegals as nearly 10 percent of the California workforce. So even if the $180 billion figure is accurate, that would mean that the state’s illegal workers are punching below their weight in terms of productivity.

That, however, wouldn’t be the last word, either. The $180 billion figure would be more impressive if it was a growing share of state output, and less impressive if it was shrinking or stagnant. But Blanco’s article gives readers no way to know.

Another statistic cited by Blanco sheds a little light on these questions, but not nearly enough, because it suffers the same shortcomings. The author reports that a “Washington, D.C.-based research group,” the Institute on Taxation and Economic Policy (ITEP), has determined that “In 2014, almost $3.2 billion of California’s state and local taxes came from undocumented immigrants….”

Again, that “billion” word sounds like a major sum – but sharp-eyed readers might notice something that’s apparently eluded Blanco. If both ITEP and the lawmaker who introduced the Sanctuary State bill are right, then the tax revenue generated by California’s illegal workers amounts to about 1.78 percent of their contribution to the state economy. That looks distinctly unimpressive.

Just as unimpressive: the share of the state’s total annual tax haul represented by illegal immigrants, if ITEP is right. For according to the state government, the $3.2 billion claimed by ITEP for 2014 would come to 4.83 percent of personal income tax revenue. Remember – this is from nearly 10 percent of the state’s workforce, so that’s disproportionately low.

A least as important, when talking about illegal immigrants – the $3.2 billion figure is clearly not a net figure, in terms of the impact of this population on the state’s resources. Specifically, it omits illegal the use of state services by illegal immigrants and any family members who are legal (e.g., anchor children). This issue will keep looming larger and larger as the state pushes to extend eligibility for welfare and other state resources to illegals – which has already happened with in-state tuition to and financial aid for California public universities.

It’s true that income tax revenue isn’t the sum total of state tax revenue. The state government says the share was 65 percent in 2014. The remainder comes from corporate income taxes, sales taxes, and an “other” category. Illegal workers (and their families) are probably paying some of those types of taxes, too, but the article doesn’t provide any information on that score, either.

Give Blanco some credit: He reports that “not everyone agrees on the sanctuary state bill.” If only his article focusing on the legislation’s economic impact gave readers any sense that not every fact portrays it as an economic winner, either.

Im-Politic: Trump’s Draft Immigrant Welfare-Use Curbs are Anything but Radical

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Christopher Ingraham, food stamps, healthcare, Im-Politic, immigrants, Immigration, legal immigration, Los Angeles Times, public assistance, refugees, Statue of Liberty, Stephen Miller, Steve Bannon, Trump, Washington Post, welfare

So much talk these days about immigrants’ welfare use in the United States. Specifically, so much of it due to the Trump administration’s consideration of supposedly cruel and radical proposals to (1) deny admission into the United States anyone deemed likely to become a user of welfare programs, and (2) to deport even many legal immigrants benefiting from welfare. And so little reporting that this intention has been the law of the land for decades – but that the statutes have been written in utterly ludicrous ways.

The completely unjustified furor began when the Washington Post obtained a draft Trump administration Executive Order mandating the immigrant welfare crackdown. In the words of Post reporter Christopher Ingraham,

“Such a move would represent a departure from current practice but would be consistent with the goals of Trump advisers Stephen K. Bannon and Stephen Miller, who, in the words of the Los Angeles Times, ‘see themselves as launching a radical experiment to fundamentally transform how the U.S. decides who is allowed into the country.’”

Let’s leave aside for the moment the peculiarity of one journalist using others as sources of unassailable expertise. The more important point is that Ingraham (and his editors) briefly noted that “Strict eligibility guidelines…prevent many immigrants from receiving federal aid” – but are basing their conclusion about a radical break from the present on the completely specious distinction that American immigration law has been drawing between forms of public assistance classified as “cash welfare” and those placed in an (Orwellian) “non-cash” category.

Here’s how current American law is described by an organization dedicated to “Helping low-income individuals solve legal problems.” (And with its services offered in no less than 27 foreign languages, immigrants are plainly a high priority.)

“Depending on your immigration status, the Department of Homeland Security (‘DHS’) and State Department consular officers can deny your application to become a permanent resident, or refuse to let you enter or re-enter the U.S., if they think you will not be able to support yourself without these benefits in the future.” (See this link.)

As WashingtonLawHelp explains, the government’s present focus is identifying (and excluding) anyone “who cannot support themselves and who [would] depend on cash welfare for their income.” But what the emphasis on “cash welfare” leaves out are those numerous and massive programs that do not involve outright cash payments – e.g., food stamps, and medical and housing benefits.

This bizarre loophole is what the Trump Order seeks to close. For it would add these programs to the roster of types of assistance whose receipt would legally turn an individual and/or their family into the kind of actual or potential “public charge” that current immigration law (only partly) aims to exclude from legal U.S. residence.

(For those of you now fearing that the Trump draft proposals would betray in an unprecedented manner the iconic and admirable Statue of Liberty commitment to America as a haven for the world’s “poor” and those “yearning to breathe free,” you can relax. These measures – like current law – would apply only to immigrants, not to those applying for entry as refugees, asylum seekers, or human trafficking victims.)   

So a big immigration policy change is definitely being contemplated. And it would certainly be dramatic, for Ingraham’s article makes clear that such non-cash assistance is the predominant type used by immigrants. But does the change really qualify as radical? Or even significant in a logical sense? If so, why? Because American taxpayers ultimately aren’t as completely on the hook for these so-called non-cash benefits as for cash benefits? What baloney.

So here are two descriptions for the possible change that actually deserve to become the standards: “Commonsensical” and “long overdue.”

Im-Politic: The Trump Voters Who Want Work, not Welfare

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coal country, Dante Chinni, Democrats, dignity of work, family leave, Im-Politics, Immigration, Jobs, Mainstream Media, minimum wage, Obama, Obamacare, The Wall Street Journal, Trade, Trump, wages, welfare

There’s no doubt that “Aha!” articles need to occupy a prominent place in journalism. This is especially true when they reveal important gaps between the claims of politicians and other major public figures on the one hand, and incontestable reality on the other.

At the same time, “Aha!” journalism can contain fatal flaws even when it’s superficially accurate. As illustrated by a Wall Street Journal article published yesterday, the problems can become serious when the Mainstream Media and others in America’s chattering classes try to figure out what’s going among those American voters who supported President-elect Trump.

Since I’m not a mind-reader, I of course can’t know reporter Dante Chinni’s exact motive in presenting the evidence that Trump voters look to be among the biggest losers if the president-elect keeps his campaign promise to repeal President Obama’s healthcare reforms. But it’s certainly got major – and legitimate – “Aha!” overtones. What could be easier to imagine than Democrats and other assorted liberals and progressives making political hay out of the idea that Mr. Trump will wind up shafting his own backers big-time. Indeed, that’s already begun.

Nonetheless, there’s a big part of this picture that pieces like this miss (regardless of how much or how little of Obamacare the next administration tries to keep). As the Journal article makes clear, Trump voters appear certain to take a painful Obamacare hit because so many live in parts of the country that have been devastated by trends like technological advance, offshoring-friendly trade deals, and the demise of the coal industry. Where lost jobs haven’t resulted, wages have fallen significantly. Of course, these setbacks go far toward explaining why they were Trump voters to begin with!

But there’s a clear implication at work here: that, in fact, those Trump voters should have backed Democratic presidential nominee, and Democratic or otherwise liberal members of Congress, because they’d have surely kept the very important benefit of adequate, free or much lower cost medical coverage.

This conclusion makes perfect sense from the standpoint of typically well heeled, thoroughly urbanized members of the nation’s media, political, and policy establishments. Business leaders who view themselves as progressives surely agree. But it makes no sense from the standpoint of economically pressed Trump voters – who as should now be screamingly obvious, live worlds apart from these elites.

For many of these folks remember the days when they didn’t need Obamacare to prop up their living standards or prevent their descent into near-poverty or outright destitution. They also remember the days when they were able to own a home by financing it responsibly, take a respectable vacation, buy a new car, provide for their children the college education they may have lacked, and retire securely – all without minimum wage hikes, without paid family leave, and without subsidized healthcare during their working lives, and without any of the other actual and prospective palliatives offered by the public sector, whether adequate or not.

In other words, they remember the days when they and/or their spouse held good-paying and reasonably secure jobs, and they reject the idea that any forms of welfare – even all added up together – amount to acceptable compensation. And they resent the dole especially vehemently if they believe, rightly or wrongly, that their livelihoods disappeared or turned into dead-end jobs because of entirely avoidable political decisions – especially on the trade and immigration fronts.

The point here is not that Obamacare and other government supports are bad or unnecessary. The point is that Trump voters (and of course many others) believe in “the dignity of work” – not in the formal Catholic sense, but in the informal, everyday sense. And they want to see more politicians taking this idea seriously, instead of giving it lip service.

(What’s Left of) Our Economy: No Easing American Poverty While Policy Blindspots Persist

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American South, Chico Harlan, Immigration, Jobs, mass transit, poverty, single mothers, The Washington Post, Trade, transportation, wages, welfare, {What's Left of) Our Economy

Chico Harlan and some colleagues at the Washington Post have done some terrific reporting recently on the poverty-heaviness of the American South and especially the new developments fueling it, and his piece this week on its increasing suburban-ization is no exception. (Click here and here for two earlier articles.) Except I take exception in one regard. Harlan here seems to gloss over the role played by poor – and avoidable – personal choices, both by currently poor southerners and by their forebears.

By following the odyssey-like travel forced on one young low-income Atlanta-area woman even to go job-hunting, Harlan convincingly shows the harm done by the dispersal of poor populations from inner cities combined with the lousy mass transit systems in suburbs and equally bad transit links between those suburbs and urban cores. And in fact, recent research makes clear that the transit dimension of poverty and near-poverty is hardly restricted to the south. So it’s completely appropriate to sympathize with Lauren Scott, who can’t afford a car, as she spends literally hours on buses heading to and from job interviews and following up other employment leads.  It’s just as appropriate to condemn the zoning laws and other state and local policies that make such travel so excruciating and time-consuming.

At the same time, I wish Harlan had spent more space discussing other aspects of Scott’s life that deserve more scrutiny, and that shed more light on poverty in America today. For example, she’s a single mother, which the author documents both pushed her below the poverty line to begin with, and which has limited the kinds of positions she could hold and applied for. In Scott’s case, Harlan writes, she was misled by a faulty medical diagnosis of permanent infertility. At the same time, that’s hardly the only, or even a major, reason for out-of-wedlock births by mothers who literally can’t afford motherhood.

In addition, she has a battery charge on her record. A dubious roommate helped drain her modest savings, and her family was in position to help. Her daughter’s father had flown the coop. Scott had “long ago lost contact with her mother.” The article makes no mention of her own father. And although one of her siblings is serving in the military, another has just been released from prison.

All of which puts in interesting, to say the least, perspective Harlan’s observation that “A generation earlier, even people in Scott’s situation had advantages that she lacks. They tended to live in the middle of Atlanta, near the subway, and they received welfare, cash payments from the government that were available to nearly all in deep poverty, regardless of whether they had a job.”

Not that the author implies that this system was ideal. But Scott’s personal and family history strongly indicates that it wasn’t even acceptable – and had destructive effects on its intended beneficiaries.

I also wish that Harlan had mentioned other sources of new and resurgent poverty in the south and elsewhere in America – especially the offshoring-friendly trade policies and Open Borders/amnesty-friendly immigration measures that have destroyed so many family wage job opportunities for the nation’s working class and working poor. Some attention is now being paid throughout the policy community to domestic moves that could alleviate poverty – like the aforementioned transportation improvements and more generous family and medical leave requirements, along with more familiar proposals like further expanding the earned income tax credit, raising the minimum wage, and of course improving the schools. But the near future could well see trade and immigration pressures on native-born workers – which have the greatest direct effects on job-creation and preservation – grow even stronger.

As a result, I’m hoping like heck that 2016 is a better year for Lauren Scott, who like many of America’s poor really does want to overcome past mistakes and work for a living. I just wish I was more optimistic.

Im-Politic: Impoverished Thinking About Anti-Poverty Programs

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entitlements, Im-Politic, poverty, transfer payments, Washington Post, welfare, Welfare State

What’s the main purpose of an anti-poverty program? The best answer I can come up with is “enabling recipients to live lives of reasonable well-being without the need for government assistance.” Keep in mind that I’m not talking here about welfare programs. There’s always going to be some overlap, of course, but what I’m getting at is the distinction between beneficiaries who are capable of self-sufficiency and those who aren’t.

Strangely enough, though – if this Washington Post article is representative – the goal of greater earnings power doesn’t seem to be much on the minds of the academics, other policy analysts, and politicians who dominate the national debate on the subject. Instead, if they’re to the right of the political center, they seem preoccupied with proving that all government transfer payments (even including entitlements like Social Security) do absolutely no good whatever, by any criteria. And if they’re on the left, their goal seems to be defending these programs against any and all criticisms.

The Post piece reports on academic research claiming that the effectiveness of anti-poverty programs is often understated because the federal government surveys that help gauge progress tend to suffer two major flaws. First, the target populations are harder to glean any answers from, for a variety of logistical and other reasons. And second, the answers often given significantly understate the levels of assistance beneficiaries receive.

According to University of Chicago public policy professor Bruce D. Meyer, the information gap is so big that “When the numbers are corrected, we see that government programs have about twice the effect that we think they do.” And as Post reporter Roberto Ferdman explains, ignoring the surveys’ shortcomings

“can have a profound effect on policy discussions concerning the two.

“On the one hand, it makes it look like the poor are doing much worse than they are. The official poverty rate now is higher it was three decades ago, but by almost any measure the poor are better off than they were then. Meyer believes that a more accurate gauge would show that things are better or, at the very least, not worse.

“On the other, it does government assistance programs a great injustice, by making them appear less effective than they actually are.”

I’m all for developing the best quality data and basing policy decisions on them. But the debate depicted above is entirely beside what should be the point. Who seriously doubts that big enough government checks or enough food stamps etc. can bring and keep recipients above whatever level of living standards is officially defined as the poverty line – and indeed can do so indefinitely? In other words, does anyone dispute that giving low-income folks enough money can make them better off, at least materially? Is skepticism about this proposition really the main basis of conservative attacks on the Welfare State? And is “proving” the affirmative really the best defense its defenders can raise?

Of course, it’s entirely possible that the answer to both questions is “Yes.” Which would make a wager that America won’t be meaningfully alleviating poverty any time soon an awfully safe bet.

Im-Politic: Thinking Big to Help Our Country’s Baltimores

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Baltimore, Im-Politic, infrastructure, Jobs, prisons, wages, welfare

I’m getting to think that one of the best signs that Americans have no clue how to solve a major public policy problem is lengthy debate that has changed absolutely no minds whatever. If true, then Americans have no clue how to solve the urban poverty problems responsible for the Baltimore riot, and some totally outside the box ideas are urgently needed. Here are some I hope can get the nation started.

First, let’s stop obsessing about what’s mainly to blame for the degraded state of Sandtown and neighborhoods like it all around the country. Any environment this dangerous and dysfunctional by definition inevitably has multiple and deep roots. Why debate whether the main issue is terrible policing or high crime or drug use or family breakdown or rotten schools or lack of jobs or historic official discrimination (like mortgage red-lining)? Who can doubt that all these pathologies and misdeeds have played a part, and have often enforced each other? The main issue is what to do now.

Second, let’s stop kidding ourselves about the merits of the main current ideas on how to improve the Sandtowns of America. It’s not a lack of money; for example, Baltimore city spends more per pupil than all but one major Maryland school system. But it’s also completely unrealistic to think that largely free market solutions are the answer. No matter how much taxes or regulations are cut (or how many incentives are offered), viable businesses that can create good jobs simply have no reason to move into very low-income urban areas. In fact, given the crime and the shortage of workers with even rudimentary skills, productive capital has every reason to stay away.

Third, nonetheless, good jobs are clearly the best hope for fixing inner city problems. Individuals in solid economic situations stand the best chance of forming stable families, sending to schools children capable of learning from reasonably good teachers, and luring businesses to supply their needs. And if the private sector can’t plausibly be relied on to create these jobs, then it’s up to government.

Fourth, despite the limited middle-class employment opportunities currently generated by the U.S. economy for Americans with relatively low levels of skills and education, there’s a super-abundance of work for these individuals to do: It’s fixing the nation’s lousy traditional infrastructure and building out the systems of tomorrow.

As widely recognized – except on the libertarian or just-plain-angry Right – today’s rock-bottom interest rates mean that the money’s available without further stressing taxpayers. The economic payoff, meanwhile, is well established – in terms of not only more employment, but stronger current growth, higher productivity, and greater healthy future growth (which generates more tax revenues and therefore healthier national finances).

So there’s no good substantive reason not to launch an historically unprecedented campaign to rebuild America’s roads, bridges, airports, and ports; to maintain them properly once they’re repaired or refurbished; to increase their intelligence with high tech sensors and controllers and the like, and with all the power transmission systems they will require; and to bring the nation’s communications systems up to twenty-first century standards.

And there’s no substantive good reason not to offer inner city residents the jobs needed to meet this challenge at middle class wages, complete with generous benefits.

Conservatives will of course doubt that these programs can be run responsibly, and thus have made them non-starters politically in Washington. But truly functional and properly maintained traditional infrastructure, at least, is hardly rocket science, and the economic benefits would compensate for much of the waste. Just as important, these conservatives need to realize that the money is going to be spent anyway – and has been spent for decades. It’s gone to prisons, which are fantastically expensive, and which arguably worsen the criminality and threats to public safety they’re supposed to be reducing by serving as graduate schools of crime. And it’s gone to various kinds of welfare, whose track record is just as bad, but which most of the public apparently has decided shouldn’t be significantly reduced.

An infrastructure boom wouldn’t solve all of the economic problems besetting U.S. inner cities. But it would be a great start. So the choice seems pretty clear. Americans can keep hurling stale slogans at each other, and trafficking in magical solutions. Or they can focus on empowering their disadvantaged fellow citizens to meet a vital and staggeringly huge but technologically and managerially unexceptional national challenge. The latter is an obvious winner for all Americans – unless you belong to our hopelessly partisan political hustler class.