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Wednesday, December 28, 2011

Selected Quotes from The Economic Logic of Illegal Immigration by Professor Gordon H. Hanson.

Quotes Selected by Chuck McGlawn.

It is a 52-page report commissioned by the Council on Foreign Relations. I am not going to try to abbreviate the contents of the Dr. Hanson Report. I am just going to share with you some of the quotations that should have some effect on your thinking about so called Illegal Immigration. We will quote some of Dr. Hanson remarks found in the Foreword, Introduction, Current U.S. Immigration Policy, Illegal Immigration and the U.S. Economy, Benefits and Costs of Immigration, Reforming Immigration Policy and Final Considerations

In the FORWARD, Professor Gordon H. Hanson approaches immigration through the lens of economics.
By focusing on the economic costs and benefits of legal and illegal immigration, Professor Hanson concludes that stemming illegal immigration would likely lead to a net drain on the U.S. economy.

Hanson argues that guest worker programs now being considered by Congress fail to account for the economic incentives that drive illegal immigration, which benefits both the undocumented workers who desire to work and live in the United States and employers who want flexible, low-cost labor.

In the INTRODUCTION Professor Hanson says, “From a purely economic perspective, the optimal immigration policy would admit individuals whose skills are in shortest supply and whose tax contributions, net of the cost of public services they receive, are as large as possible. Admitting immigrants in scarce occupations would yield the greatest increase in U.S. incomes, regardless of the skill level of those immigrants. In the United States, scarce workers would include not only highly educated individuals, such as the software programmers and engineers employed by rapidly expanding technology industries, but also low-skilled workers in construction, food preparation, and cleaning services, for which the supply of U.S. native labor has been falling.”

[T]here is little evidence that legal immigration is economically preferable to illegal immigration. In fact, illegal immigration responds to market forces in ways that legal immigration does not.

Illegal migrants tend to arrive in larger numbers when the U.S. economy is booming [When they are needed.] and move to regions where job growth is strong. Legal immigration, in contrast, is subject to arbitrary selection criteria and bureaucratic delays, which tend to disassociate legal inflows from U.S. labor-market conditions.

Two-thirds of legal permanent immigrants are admitted on the basis of having relatives in the United States. Only by chance will the skills of these individuals match those most in demand by U.S. industries.

[T]emporary legal immigrants come to the country at the invitation of a U.S. employer, the process of obtaining a visa is often arduous and slow. Once here, temporary legal workers cannot easily move between jobs, limiting their benefit to the U.S. economy.

Quotes from ILLEGAL IMMIGRATION AND THE U.S. ECONOMY: “Between 1960 and 2000, the share of working-age native-born U.S. residents with less than twelve years of schooling fell from 50 percent to 12 percent.”

Native-born U.S. workers with low schooling levels are increasingly hard to find. Yet these workers are an important part of the U.S. economy—they build homes, prepare food, clean offices, harvest crops, and take unfilled factory jobs.

Illegal immigration also brings low-skilled workers to the United States when the productivity gains of doing so appear to be highest. During the past twenty years, Mexico has experienced several severe economic contractions, with emigration from the country spiking in the aftermath of each downturn. In terms of the economic benefits, this is exactly when one would want workers to move—when their labor productivity in the United States is highest relative to their labor productivity at home. Long queues for U.S. green cards mean there is little way for legal permanent immigration to respond to such changes in international economic conditions.

Quoting from BENEFITS AND COSTS OF IMMIGRATION:  “Overall, immigration increases the incomes of U.S. residents by allowing the economy to utilize domestic resources more efficiently”

Immigration generates extra income for the U.S. economy, even as it pushes down wages for some workers.

More workers allow U.S. capital, land, and natural resources to be exploited more efficiently. Increasing the supply of labor to perishable fruits and vegetables, for instance, means that each acre of land under cultivation generates more output. Similarly, an expansion in the number of manufacturing workers allows the existing industrial base to produce more goods.

The annual immigration surplus in the United States appears to be small, equal to about 0.2 percent of GDP in 2004.

[L]ower wages for low-skilled labor mean lower prices for labor intensive goods and services, especially those whose prices are set in local markets rather than through competition in global markets. Patricia Cortes finds that in the 1980s and 1990s U.S. cities with larger inflows of low-skilled immigrants experienced larger reductions in prices for housekeeping, gardening, child care, dry cleaning, and other labor-intensive, locally traded services.

Lower prices for goods and services raise the real incomes of U.S. households, with most of these gains going to those in regions with large immigrant populations.

The total impact of immigration on U.S. residents—the sum of the immigration surplus (the pretax income gain) and the net fiscal transfer from immigrants—would be unambiguously positive.

If immigrants are a net fiscal drain, the total impact of immigration on the United States would be positive only if the immigration surplus exceeded the fiscal transfer made to immigrants. For low-skilled immigration, whether legal or illegal, this does not appear to be the case.

In REFORMING IMMIGRATION POLICY: [Remember this report was published in April 2007]  Liberty Views suggest that you read this segment yourself. We  make this recommendation because, “There are no easy answers to U.S. immigration problems.”

“One issue on which most members of Congress agree is that border and interior enforcement should be expanded. At current enforcement levels, as many as 400,000 new illegal immigrants are probably still entering the country on net each year, and halting that flow will require a further increase in the already substantial resources devoted to the task.

“The expenditures on border enforcement (more than 0.1 percent of GDP) are already greater than the fiscal benefits of reducing illegal immigration (less than 0.1 percent of GDP).

Currently [2007], U.S. employers, by virtue of asking workers for identification at the time of their hiring, can plausibly deny having knowingly hired illegal immigrants. A system of electronic verification would potentially eliminate plausible deniability, placing a greater burden on employers to screen out workers who are unauthorized for employment. But by any measure, halting illegal immigration is likely to be a net drain on the U.S. economy.

 Professor Gordon H. Hanson is the director of the Center on Pacific Economies and professor of economics at University of California, San Diego, where he holds faculty positions in the Graduate School of International Relations and Pacific Studies and the department of economics. Professor Hanson is also a research associate at the National Bureau of Economic Research and coeditor of the Journal of Development Economics. He obtained his BA in economics from Occidental College in 1986 and his PhD in economics from MIT in 1992.

Prior to joining UCSD in 2001, he was on the economics faculty at the University of Michigan (1998–2001) and at the University of Texas (1992–1998).

Professor Hanson has published extensively in the top academic venues of the economics discipline. His current research examines the international migration of high-skilled labor, the causes of Mexican migration to the United States, the consequences of immigration on labor-market outcomes for African-Americans, the relationship between business cycles and foreign outsourcing, and international trade in motion pictures.

In recent work, he has studied the impact of globalization on wages, the origins of political opposition to immigration, and the implications of China’s growth for the export performance of Mexico and other developing countries. His most recent book is Why Does Immigration Divide America? Public Finance and Political Opposition to Open Borders (Institute for International Economics,

For more current recommendations, read A Better Immigration Policy for America
Each year, the United States turns away thousands and thousands of highly skilled immigrants who want to join the U.S. labor force. It does this by setting aside more work visas for people chosen randomly by a lottery than for those who possess demonstrably greater abilities, by sending home many of the foreign graduates it has helped to educate, and by admitting an absurdly low number of immigrants for the size of the U.S. economy. As a result, the United States squanders a fantastic opportunity to foster innovation and accelerate economic progress, according to Independent Institute Research Director Alex Tabarrok. READ MORE

The No-Brainer Issue of the Year: Let High-Skill Immigrants Stay, by Alex Tabarrok (The Atlantic, 12/20/11)

Launching the Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast, by Alex Tabarrok; a TED Kindle book

Entrepreneurial Economics: Bright Ideas from the Dismal Science, edited by Alex Tabarrok

16 comments:

Anonymous said...

Mr. McGlawn started a new blog to take your attention off the previous blog.

Mr. McGlawn has been deleting my comments under the previous thread.

In my opinion:

1) Illegal migrants increase crime.

2) Illegal migrants cause blight to our neighborhoods.

6) Illegal migrants send $billions$ of US dollars outside our country.

7) Illegal migrants turn Mexico's problems into our problems.

8) Illegal migrants collect $billions$ in child tax credits annually.

9) IlLegal migrants cost CA taxpayers over $20B a year.

10) Illegal migrants are turning the US into a third world banana republic - just like their home countries.

Tell Mr. Hanson that I would love to debate him, Mr. McGlawn. Tell him to come out of his ivory tower to answer some of my questions. :>)

Chuckest said...

I edited A4s post. When he calls something "a fact" he must document it. Otherwise it is his opinion.

When his lay opinion contradicted a statement of an advanced degreed authority without some documentation, it was deleted.

When A4 presents facts from an advanced degreed authority they will be included in the blog.

Anonymous said...

"When his lay opinion contradicted a statement of an advanced degreed authority without some documentation, it was deleted"

You offer lots of opinons on these boards that aren't supported by documented facts. Why don't you delete some of your own comments. Opinion boards exist for opinions. The academics that you reference rarely if ever give us the calculations that form their conclusions. Therefore, what they write is largely an opinon too. Just because someone has a Ph.D. it doesn't mean that he isn't bought and paid for by some outside organization. I have raised some very legitimate questions about the conclusions drawn by the academics you referenced. They are EXPERTS at only showing you HALF THE EQUATION. The other half they deliberately ignore. That's not research. That's deception.

Chuckest said...

I did not delete your opinions.

However, when you stated something that was a direct contradiction of something Dr. Hanson asserts after a lifetime of study, your contrary OPINION has not earned an airing.

A4 said, "You offer lots of opinions on these boards that aren't supported by documented facts."

Opinion, is acceptable, I allowed yours. If something is documented then it is not opinion, and if any one objects, his objections should be documented.

I object to what you say because they are either isolated statistics, undocumented e-mails or anecdotal stories.

You quoted FAIR that said
II=illegals immigrants, cost the taxpayers $131 Billion.(I may have the number wrong.) The statistic is likely accurate. The distortion is in the way it is said. "II cost TAXPAYERS $131... According to estimates more than half of the II are working ON THE BOOKS and are among the TAXPAYERS that FAIR IS TALKING ABOUT.


A4 said, "The academics that you reference rarely if ever give us the calculations that form their conclusions. Therefore, what they write is largely an opinion too.

That is not true. The article that brought you to this blog was an abbreviation of a near 100 page study with numbers, calculations and graphs. If you wanted the truth, you would have linked to the article and learned the raw data that supported the conclusions.

A4 said, "Just because someone has a Ph.D. it doesn't mean that he isn't bought and paid for by some outside organization."

What you say is true. It also doesn't mean that they are.

A4 said,"I have raised some very legitimate questions about the conclusions drawn by the academics you referenced."

No you haven't When you challenge almost every advanced degreed economist who say II is a NET GAIN with the isolated statistic that Fair says II cost TAXPAYERS $131 Billion. It means nothing. You should see it for what it is, a distorted fact compiled in an attempt to make you hate II.

A4 said, "They are EXPERTS at only showing you HALF THE EQUATION.

That is not true. Did you take 3 minutes to view The Three Myths of Immigration? It includes numbers and graphs. It destroys any false belief that Immigration causes unemployment.

This is fair warning A4, if you have legitimate questions about the content of this blog you are welcome. However, if you are going to use this blog to promote your baseless agenda, all of your postings will be deleted.

Anonymous said...

Mr. McGlawn deleted my claim that illegal migrants cost our nation $120B a year in 2011.

Here is a proof source from FAIR. In 2010 illegals cost us $113B - so for 2011 one must factor in inflation and other accelerating measures by 6%.

Unlike Mr. McGlawn's referenced 'experts' FAIR actually provides calculations and an itemized accounting that supports their conclusions.

Here, look for yourselves:

http://www.fairus.org/site/News2/977633106?page=NewsArticle&id=23190&security=1601&news_iv_ctrl=1761

Now that's how research should be done, Mr. McGlawn. You might send your 'experts' a copy of FAIR's research so they can use similar methods next time.

Anonymous said...

Mr. McGlawn,

Don't forget to click on that pdf report that is linked to the FAIR executive summary that I posted. It will provide you with all the data that was required for FAIR to come to their final conclusions. That is the way a research paper should be constructed - with all the supporting data contained therein. Make sure to tell your referenced expert sources to follow said example the next time they conduct research and present a study. And FAIR was very objective in their presentation by even stating the amount of tax revenue generated by illegal migrants. You notice that your referenced experts never presented the actual COSTS of illegal immigration. They referred only to the alleged gains without supporting evidence.

Do you see the difference in the quality of the research, Mr. McGlawn? Please take note. Thank you.

Anonymous said...

Either I stumped Mr. McGlawn with my FAIR link to which he has no reply - or he is in the midst of preparing a rebuttal to FAIR's claims. Please update us, Mr. McGlawn. We are awaiting your response with bated breath.

The FAIR link has some VERY damning evidence taken from government sources that directly refutes most claims made by pro-illegal migrant crowd. It is very solid research that will be very hard for Mr. McGlawn to overcome.

All we ask is that you don't spin your response with mere 'opinion' without supporting evidence to refute the FAIR conclusions, Mr. McGlawn. Don't be a spinmeister, ok?? :>)

Anonymous said...

Well, it appears that the FAIR data was too big a challenge for Mr. McGlawn who failed to respond.

At the very least you should acknowledge that the FAIR data puts to rest many of the routine claims made by the illegal migrant sympathizers, Mr. McGlawn.

Best of luck in the New Year!

chuckest said...

Quoting: Alan Greenspan, PhD, former Chairman of the US Federal Reserve, stated in his Apr. 30, 2009 testimony before the US Senate Subcommittee on Immigration, Refugees, and Border Security:

"[T]here is little doubt that unauthorized, that is, illegal, immigration has made a significant contribution to the growth of our economy. Between 2000 and 2007, for example, it accounted for more than a sixth of the increase in our total civilian labor force. The illegal part of the civilian labor force diminished last year as the economy slowed, though illegals still comprised an estimated 5% of our total civilian labor force. Unauthorized immigrants serve as a flexible component of our workforce, often a safety valve when demand is pressing and among the first to be discharged when the economy falters.

Some evidence suggests that unskilled illegal immigrants (almost all from Latin America) marginally suppress wage levels of native-born Americans without a high school diploma, and impose significant costs on some state and local governments.
However the estimated wage suppression and fiscal costs are relatively small, and economists generally view the overall economic benefits of this workforce as significantly outweighing the costs."

chuckest said...

Quoting: Francine J. Lipman, MBA, LLM, Professor of Law, Business and Economics at Chapman University, wrote in a Spring 2006 Tax Lawyer essay titled "Taxing Undocumented Immigrants: Separate, Unequal and Without Representation":

"Americans believe that undocumented immigrants are exploiting the United States' economy. The widespread belief is that illegal aliens cost more in government services than they contribute to the economy. This belief is undeniably false... [E]very empirical study of illegals' economic impact demonstrates the opposite: undocumenteds actually contribute more to public coffers in taxes than they cost in social services. Moreover, undocumented immigrants contribute to the U.S. economy through their investments and consumption of goods and services; filling of millions of essential worker positions resulting in subsidiary job creation, increased productivity and lower costs of goods and services; and unrequited contributions to Social Security, Medicare and unemployment insurance programs. Eighty-five percent of eminent economists surveyed [according to the Dec. 1995 study by Julian L. Simon, "Immigration, the Demographic & Economic Facts," of the Cato Institute and the National Immigration Forum] have concluded that undocumented immigrants have had a positive (seventy-four percent) or neutral (eleven percent) impact on the U.S. economy."

Spring 2006 - Francine J. Lipman, MBA, LLM

chuckest said...

Quoting: Raul Hinojosa, PhD, Associate Professor of Chicana and Chicano Studies at the University of California at Los Angeles (UCLA), wrote in his July 18, 2005 BusinessWeek interview "A Massive Economic Development Boom":

"First and foremost, [illegal immigration] it's a source of value added. The total goods and services that they consume through their paycheck, plus all that they produce for their employers, is close to about $800 billion. They're also producing at relatively lower costs because the undocumented population typically gets about 20% less in wages than if they were legalized. That leads to lower prices for us and higher profits to employers. In addition, they're obviously a huge consumer base. We've seen that 90% of the wages that the undocumented population gets are spent inside the U.S. Remittances are sent abroad, but that only represents about 10% of immigrants' income. The numbers are becoming quite huge. We estimate about $50 billion dollars in remittances this year. That means that total consumptive capacity remaining in the U.S. is $400 billion to $450 billion. If you took away the undocumented population, it would be the worst economic disaster in the history of the U.S."

chuckest said...

Quoting: The Washington Post wrote in its June 4, 2007 editorial article "Immigrants Equal Growth... Reform Isn't Just Humane. It's Self-Interest":

"Amid the blizzard of data concerning immigrants' effects on wages, welfare and municipal budgets, the essential point is this: The latest wave of immigrants -- legal and illegal, skilled and unskilled -- has stimulated enormous economic activity and wealth generation in this country, and it is implausible that the American economy would fare as well without them... Since most immigrants come when they are young and working... they tend not to collect Social Security or Medicare for many years -- even while paying into the systems with payroll taxes, in many cases with phony Social Security numbers (meaning they will contribute but not collect). In fact, illegal immigrants do not get federal welfare benefits of any kind. At the same time they often pay income tax (through paycheck withholdings) and sales tax, thereby helping directly or indirectly to underwrite transportation, health care, education and other services. And while immigrants surely have contributed to some extent to the ranks of the poor, that was also true of previous waves of immigrants; the point is, most of those immigrants didn't stay poor."

chuckest said...

Quoting: The Wall Street Journal, in its "Monthly Economic Forecasting Survey: April 2006," conducted from Apr. 7-11, 2006, obtained the following answers from 46 economists:

"Illegal immigrants often benefit businesses by filling low-wage jobs that are difficult to fill with Americans. But illegal immigrants can add to the costs of U.S. social programs. On balance, has the U.S. economy benefited more than it has been harmed by its current population of undocumented workers?"

It has benefited more than it has been harmed? 96%

It has been harmed more than it has benefited 4%

chuckest said...

Quoting: Jesus Nebot, filmmaker, entrepreneur, and speaker, wrote in an Aug. 14, 2011 email to ProCon.org:

"Economic studies seem to indicate that the contribution of undocumented immigrants to the US economy is greater than their burden.

Undocumented immigrants pay sales tax on their purchases and property tax on their homes. Additionally an estimated three-quarters of undocumented immigrants pay income tax using Individual Taxpayer Identification Numbers or false Social Security numbers. These documents put workers 'on the books,' which means their employers must make required deductions from their pay. Each year, taxpayers who use incorrect or false Social Security numbers (the majority of them undocumented immigrants) contribute approximately $7 billion to Social Security and $1.5 billion to Medicare. Most of these workers were educated in their countries of origin and now the U.S. economy reaps the rewards of their work. Yet, undocumented workers are ineligible for most government benefits.

On average, all immigrants will pay $80,000 more in taxes per capita than they use in government benefits over their lifetime. These facts led the President's Council of Economic Advisers to declare in June 2007 that 'the long-run impact of immigration on public budgets is likely to be positive.'

Undocumented immigration also produces a net benefit at the state level. For example, approximately 13.9% of the nation's undocumented immigrants live in Texas. In 2006, the Texas Comptroller reported that undocumented immigrants paid about $424.7 million more in state revenues – including sales tax and school property tax – than they used in state services, including education and health care."

chuckest said...

Quoting: The Pew Hispanic Center estimates that as of March 2010, 11.2 million unauthorized immigrants live in the U.S., and about 7 million of them migrated from Mexico. Why do so many Mexicans choose to illegally immigrate to the U.S where they are often treated with contempt and disrespect? And, if they really want to come to the U.S., why don’t they play by the rules and enter legally? Why do so many choose to make the grueling 4-day journey though the Arizona desert that involves very real risks of dehydration in 115-degree heat and rape at the hands of human smugglers?

Part of the explanation has to do with Mexico’s relative poverty and proximity to the U.S. The border between the U.S. and Mexico marks the largest income gap between any two neighboring countries in the world.

Until 1986, when U.S. immigration laws changed so dramatically, hundreds of thousands of Mexicans came and went – or stayed – with comparative ease. As a result, the 2,000-mile border now splits millions of Mexican and American families. Considering the income disparity and the social, economic, and historical ties between the two countries, it’s easy to see why Mexicans choose to migrate to the U.S.

Another part of the explanation has to do with current U.S. immigration laws, which essentially treat Mexicans the same as just about any other nationality despite Mexico’s special status as a neighbor. In 2010, the U.S. provided fewer than 180 thousand visas to Mexicans for labor and family unification purposes. This figure is equivalent to just 2.7% of the number of unauthorized Mexicans now living in the U.S. The competition for such a small number of visas means that it’s practically impossible for the typical Mexican immigrant to enter the country legally in his or her lifetime. So, with no way to enter legally, Mexicans make the difficult decision to migrate illegally.

Consider a 30-year old Mexican with a high school education and a sibling who is a citizen of the U.S. According to data compiled by Forbes magazine, “playing by the rules” and applying for a green card could mean waiting in line for 131 years! Why such a long wait? The short answer is that current regulations limit any single country to 7% of the total number of green cards allotted by Congress in any given year. Mexico is subject to this limit just like any other country even though it is the world’s eleventh most populated country and a neighbor to the U.S.

It’s absurd to expect someone to go to the back of a line that never ends. If the U.S. wants Mexican immigrants to play by its rules, a set of rules must be created that includes them in the game. The design of the current U.S. immigration system is based on a model from nearly half a century ago. A twenty-first century immigration policy should recognize Mexico’s unique status as a neighbor of the U.S. Surely Mexican workers would prefer to enter legally, and moreover, the U.S. economy is dependent on their skills and labor.

Anonymous said...

Mr. McGlawn,

It's Funny that you should quote Alan Greenspan, one of the architects of a massive global economic meltdown in which tens of millions lost their jobs, homes and life savings and from which we continue to suffer!!!! Who in their right mind would take the OPINION of that devil seriously?? YOU NEED TO REFER TO THE "FAIR" DATA THAT I POSTED EARLIER TO UNDERSTAND THE ECONOMIC DAMAGE WE HAVE SUSTAINED THROUGH ILLEGAL IMMIGRATION!!!!

None of the other clowns you referenced (Lipman, Hinjosa, Nebot, the WSJ or the Pew Hispanic Center) could refute the reseach data provided by FAIR - that unequivocally shows the economic damage that illegal immigration has caused this nation of ours.

You cannot refute it either, Mr. McGlawn. You had your chance and you folded. You know that the FAIR data represents the truth. That is the reason you failed to respond to it.

The opinions of all your contrived sources are just that - OPINIONS - and just like spinchter holes - everybody has one!!!

I PREFER TO LOOK AT THE RESEARCH DATA AND SUPPORTING EVIDENCE WHEN I SEEK OUT THE FACTS!!!!

Try it sometime. You might like it.
Start today - with a New Year's resolution, Mr. McGlawn!