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By Philippe Legrain 9 COMMENTS

The upside: Many Republican anti-immigration extremists will no longer be members of the incoming House of Representatives. Nine or 10 have lost their seats; their leader, Tom Tancredo, is retiring, as is Duncan Hunter.

The downside: Leading reform advocate Ted Kennedy is fighting cancer, and John McCain watered down his reform commitment during his election campaign. The priority for the foreseeable future will be coping with the economic and financial crisis. And when unemployment is rising, opposition to immigration is likely to strengthen.

But immigration doesn’t cost jobs. On the contrary, immigrants tend to create them.

A new study suggests immigrants are far more likely than non-immigrants to start and own businesses. It finds that immigrants start about 17% of the 484,000-some businesses created each
month, and are 30% more likely than non-immigrants to start businesses
each month, according to the Small Business Administration’s Office of Advocacy.

Hat tip: WSJ.

Posted 14 Nov 2008 in Blog
  1. nursepod says:

    I think immigration should be considered at this point in time because legal immigrants will bring their money to the US if given the chance.

  2. Alexander says:

    In a down economy and millions out of work so far this year…you want more
    immigration???? Do you have any compassion for any our American citizens?

  3. JR says:

    There are not a fixed number of jobs that immigrants are depriving us of, Alexander, as basic economic intuition verified with scholarly studies demonstrate. With such ad hominem attacks on Mr. Legrain’s concern for our citizens, I suspect you simply oppose immigration under any circumstance and are using the slow-down to justify this position.

  4. NeoMalthus says:

    I challenge JR to show the link to any study that suggests an increase in immigration will stimulate jobs when the US economy (or any economy)enters a severe recession.
    JR why not be honest about your views. The real JR position is as follows:
    ‘Anyone who advocates a slow down in immigration must be racist’

  5. JR says:

    How about the study Legrain cites in the post? Is there a problem with the SBA’s analysis?
    I know of no work off the top of my head regarding immigration effects on the business cycle, but I have not looked nor did I make that claim in my post. Rather, immigration studies have overwhelmingly shown no or positive effects on native employment (much more in the “no effect” column, than the “positive effect”). I can think of no reason for the business cycle to matter here, other than the reverse causality of probably influencing the rate of immigration.
    Immigration data is notoriously difficult since the Census only occasionally tracks gross migration flows, but the best study I recall reading from my days in regional science courses was:
    Finally, I do not assume you are racist for opposing immigration, I assume you are a mercantilist, forever hoarding gold and believing that one person’s gain is anothers loss. It is a depressing world to live in that I would not wish on anyone.

  6. Alexander says:

    The US allows over one million immigrants in every year. That does not include illegals from Mexico and H1b’s and green cards. But, of course, anyone who opposes any INCREASE is a racist. That’s where they got us.
    Maybe Philippe wants unlimited immigration and open borders as well.
    I guess I thought I lived in a society that values my quality of life. The US has been built in immigration, but I remind all of you that it is usually controlled and based upon the needs of America and not non-Americans.
    This is what you get for being a welcoming nation.
    Legrain sites the WSJ as his “Hat tip” The same WSJ and Wall street will gladly take $850 billion from US taxpaying citizens and at the same time advocate massive increases in immigration to dilute US workers wages.
    The WSJ has no credibility anymore.
    All they care about is cheap and cheaper labor while they talk up the Chinese economy.
    JR said….
    “I suspect you simply oppose immigration under any circumstance and are using the slow-down to justify this position”
    JR- Is it EVER ok to slow down immigration? I really want to know your opinion on this since I view the US is already very generous.

  7. JR says:

    Re: Alexander
    Short Answer: Immigration should be constrained to the extent we can maintain the proper careful background checks necessary for maintaining national security and the criminal justice system. I’d consider other points about education or health care system burden, but in my view those are actually arguments for removing government monopoly over education and government sponsored cartel over health care.
    Long Answer:
    Again, I do not assume anyone is racist (a lazy and intellectually bankrupt counter that you are fully right to despise and mock), rather that they are making the zero-sum fallacy that one person’s gain must be at the expense of another. I believe that part of this confusion lies in the immigration debate lies in problems of definition. Perhaps rather than asking “when is it ever ok to slow down immigration” you should ask “when is it ever ok to prevent people from moving?”
    If you move from the east side of your town to the west, you are an immigrant, migrant, or mover. Which of those three terms you choose to apply is merely based on point of origin and point of destination, and where you draw the arbitrary lines of your border in figuring out who counts in your social welfare function.
    Do you honestly believe, that the United States as a whole would have been better off over the long run if movement was restricted within the country to a significant extent? If people could not move from one school district to another? One county to another? One state to another? It is very hard to think that it would be. In fact, it is extremely important that people are able to move to account for the infinite array of changing conditions. Shortages in an area can be relieved by migration to areas of surplus.
    Secondly, there are considerable positive spillovers from what economists call “agglomeration economies.” These accrue when people start to concentrate in a single area, allowing them to become more productive (think Silicon Valley or New York City), lower transportation costs, and increase economies of scale. The only true natural resource a country has is the number of brains it has to solve problems.
    For concreteness, let’s take an example from my profession, which is subject to more competition from foreigners than any other American profession…university professor. Consider the social benefits that accrue to everyone else because of the relatively open borders in this profession. Would my earnings be higher if we kicked out half the workforce? Probably, but there would be far fewer universities because of the much higher labor costs, so I might end up in a different profession altogether. Furthermore, students would be paying far higher tuition, and as such we would have much lower college enrollments. They would not get the experience of learning from those with very different life experiences, and if you value that as part of a quality education, then that declines as well. Not to mention the value they serve as my colleagues and friends. They also force me to be a better teacher and researcher, so that I can compete with them for things like good evaluations, journal publications, and policy advice.

  8. Alexander says:

    For decades, before a heedless congregation, some of us have preached the old Hamiltonian gospel.
    Great nations do not have trade partners. They have trade competitors and rivals. Trade surpluses are superior to trade deficits. Tariffs on foreign goods are preferable to taxes on U.S. producers. Manufacturing, not finance, is the muscle of the nation.
    Economic independence is vital to political independence.
    Following Hamiltonian precepts, the United States grew from 13 rural and agricultural colonies into the greatest industrial power in all history, producing 42 percent of the world’s manufactured goods. We were the awe and envy of mankind, the self-sufficient republic, maker of half of the armaments produced by all the nations in World War II.
    That is the America we grew up in — that has now vanished.
    Chrysler, Ford, perhaps GM, may be dying. Manufacturing has sunk to 10 percent of U.S. employment, a level unseen since before the Civil War. Europeans and Asians are to assemble in Washington this week to impose upon the United States a New World Economic Order like the one we imposed on them at Bretton Woods in 1944.
    Such are the fruits of free-trade ideology.
    Across the Pacific, a nation that studied how America rose, and watched as America declined, chose a different path. China adopted and pursued a China First policy of economic nationalism.
    In July, Charles McMillion of MBG Services testified to the U.S-China Economic and Security Review Commission on China’s progress.
    Beijing began its astonishing rise by devaluing its currency 45 percent in 1994, slashing the prices of exports in half and making imports twice as expensive. As America threw open her market and invited China to come in and capture it, China had erected a Great Wall around her own.
    Results: China’s worldwide trade surplus in manufactures, $31 billion in 2001, hit $401 billion in 2007, a 1,300 percent increase, and may reach $500 billion in 2008. China has shoved Germany aside to become the world’s greatest exporter and now leads the world in the export of manufactured goods to Japan and the European Union, as well as the United States.
    While running trade deficits with Asian neighbors like Taiwan, to tie them politically to Beijing, China is running record trade surpluses with the European Union and the United States, making America and the West as dependent upon China for our manufactures as we are on OPEC for our oil.
    Chinese auto production has quintupled since 2001. She now produces more cars than Germany and may exceed the United States in 2009. While Chinese auto exports are still heavily in parts, finished cars are coming soon to a dealer near you. The Chinese will likely run the sword through the last standing member of America’s Big Three.
    Before 2004, China’s manufacturing trade surplus with America was largely in textiles and apparel. But, since then, China’s rocketing trade surplus in electronics, computers and parts has far exceeded her surplus in textiles and apparel.
    China’s trade surplus in computers and components rose from $8.1 billion in 2001 to $73.5 billion in 2007. In cellular phones and parts, her worldwide trade surplus grew from $3 billion in 2003 to $50 billion in 2007, and may reach $60 billion by year’s end.
    China still imports commercial airliners. But she now has a large and growing trade surplus in airplane parts. This follows the pattern in textiles, computers and autos. First, the Chinese learn by assembling parts in factories in China. Then, China begins to produce the parts. Then, China produces the finished products and goes out to capture the world market, while protecting her own by keeping her currency cheap.
    On items the Commerce Department categorizes as advanced technology products, America began running a trade deficit for the first time early in the George W. Bush years. China now exports to us four times as much, in dollar value, in ATP items as we sell to Beijing.
    As America mothballs the shuttle, relying on Russian rockets to get our astronauts back up to a space station we built, China is putting men into space and heading for the moon.
    Since America ushered China into the World Trade Organization in 2002, Beijing’s growth rate has been four times that of the United States, accelerating from an average 10 percent of gross domestic product to 12 percent in 2007.
    With her immense trade surpluses, China’s reserves have surged from $200 billion in 2002 to $2 trillion. Awash in dollars, Beijing now waits patiently, writes McMillion, to cherry-pick the crown jewels of America’s industrial empire — “patents, talents, natural resources, brands” — at fire-sale prices in the global crash.
    As America plunges into recession and our industry hollows out, while China is still growing at 9 percent, as the 20th century’s greatest creditor nation now borrows from Beijing to pay for booster shots for its sick economy, may we hear once again the Bush-Clinton refrain about how the terrible danger we all face is from “protectionism.”

  9. NeoMalthus says:

    JR writes
    ‘Immigration should be constrained to the extent we can maintain the proper careful background checks necessary for maintaining national security and the criminal justice system.’
    If no criminal record, then approve the applicant.
    Are you serious? No numerical limit.

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