John Hinderaker: Why Immigration Reform Will Make Americans Poorer
Posted on 15-Jul-2013. Updated on 05-Sep-2013.
Topics: Effects of Immigration on American Workers
From The Powerline Blog:
Of all the arguments that are made in favor of comprehensive immigration reform along the lines of the Senate bill, perhaps the most disingenuous is the claim that it will boost the economy. Proponents of the bill always, as far as I have seen, limit themselves to the claim that admitting somewhere between 30 and 60 million new immigrants, over and above those authorized by existing law, will increase the GDP. Good Lord, I should hope so! That would be true unless every single one of them is unemployed. Increasing aggregate GDP is a ridiculously low bar. Congress has a fiduciary duty, not to citizens of Mexico, Colombia or France, but to citizens of the United States. The relevant question, with respect to the economic impact of the Gang of Eight’s legislation, is what impact it will have on existing American citizens.
A reader whose mathematical skills greatly exceed mine offers illuminating commentary on this issue. He begins by noting President Obama’s weekly address, in which he claimed that immigration “reform” will strengthen the economy: >
It is an exercise of sophisticated propaganda, but still amounts to specious economism–the notion that only aggregate GDP increases matter.
The Senate’s plan would also provide a big boost to our recovery. And on Wednesday, we released a report detailing exactly how big a boost that would be.
The report is based on the findings of independent, nonpartisan economists and experts who concluded that, if the Senate’s plan becomes law, our economy will be 5% larger in two decades compared to the status quo. That’s $1.4 trillion added to our economy just by fixing our immigration system.
And who might those supposedly “independent, nonpartisan economists and experts” be? When you check out the actual report, here is who they are:
President’s National Economic Council, Domestic Policy Council, Office of Management and Budget, and the Council of Economic Advisers.
In other words, extensions of the office of the president. His appointees–high level flacks.
And yet this is the best they can come up with! The usual misleading claim…all it means is that aggregate GDP will be higher. DUH! I would hope so, because there will be massive population increases from chain migration, “guest workers”-who-never-leave and increases in the overall level of legal immigration, not to mention illegal immigration which will continue, as admitted in their own reports.
We will certainly be a lot bigger. The TOTAL population increases are staggering not only from adding immigrants and chain migration, but because of their higher fertility rates. It’s grotesque giantism. We’ll end up looking like India, but will not be any richer. In fact, extrapolating from their numbers, per capita GDP will actually decline over the 20 year period cited.
The claim is that aggregate GDP will be 5% higher in 20 years than otherwise, equal to $1.4 trillion in constant dollars. By simple algebra that means they are assuming a status quo future GDP of $28 trillion and therefore an immigration-enhanced GDP of $29.4 trillion. But wait! What about GDP per capita, the only meaningful measure of economic growth for the populace? Well…population will increase from today’s 315 million to about 378 million under the current immigration and population levels, and to about 410 million with the new immigration regime, conservatively estimated. [Ed.: That is a VERY conservative estimate.] Simple arithmetic demonstrates that future GDP per capita without the new immigration levels is $74,000, whereas with increased immigration it is $71,700.
It cannot be otherwise, mathematically. Their GDP growth rate projections are 2.76% under the status quo and 3% with increased immigration, a difference of less than a quarter of 1%, itself based on highly speculative heroic assumptions. But what is certain is that the population growth rate increases from about .91% to about 1.32%. The differential in growth rates of population is almost double the differential of the heroically assumed aggregate GDP growth rates! Extending the analysis, since the difference in population growth rates is much larger than the difference in assumed GDP growth rates, absolute GDP per capita is less with enhanced immigration, and the growth of GDP per capita actually declines with more immigration, from about 1.9% p.a. to 1.7%….almost 1/5th of 1%. And this is all derived from their own report.
Their plan is simply to import scores of millions of unskilled 3rd world immigrants, covered by a fig leaf of a few hundred thousand high skilled STEM workers, 90% of whom we can easily do without, in order to create “economic growth” — in the aggregate — by a massive population expansion from the outside–but not growth that will benefit existing native born Americans at all. And that is not counting the inevitable economic drawbacks of this grotesque giantism — overcrowding, land use issues, infrastructure deterioration, and environmental degradation, to name a few.
WHY would they want to do this?…to explode our population with essentially no discernible economic benefit to us — existing native born Americans? There are some very good, if ignoble, reasons, but they are left as an exercise for the reader.
Our reader adds this mathematical footnote:
The growth calculations are: LN(29.4/16)/20 = 3%; LN(28/16)/20 = 2.76%; assumes $16 trillion as current period GDP; Population: LN(378/315)/20 = .91%; LN(410/315)/20 = 1.32%; GDP pe capita: LN(74/50.8)/20 = 1.89%; LN(71.7/50.8)/20 = 1.72%, assumes current period GDP per capita of $16 trillion/315 million = $50,800; 2033 GDP per capita of $28 trillion/378 million = $74,000 (no increased immigration) and $29.4 trillion/410 million = $71,700, with increased immigration.
That’s the bottom line: immigration “reform” will make Americans poorer.
 "WHY IMMIGRATION “REFORM” WILL MAKE AMERICANS POORER", John Hinderaker, Powerline Blog, 14-July-2013