Two Hands, One Mouth

Can we afford to let in more immigrants? Can we afford not to?

Until Congress took up the Simpson-Mazzoli immigration reform bill this year, it had been some 32 years since the legislature had made any fundamental changes in immigration policy. Members of Congress had long considered immigration subcommittees among their most-sedate and least-demanding assignments. No longer. Immigration policy has come close to the top of the political agenda.

Before versions of the Simpson-Mazzoli bill passed both houses in July, there was much debate about whether the measure would stanch the flow of illegal immigrants into the United States. There was very little debate about the underlying issue—whether the stream of immigrants is really a threat to the welfare of existing citizens of the country. It is in fact a very shaky premise, but it is widely held and is sure to haunt ongoing policy debates about immigration.

Practically every problem we have in the United States is said to be either created or aggravated by immigration. Colorado Governor Richard D. Lamm has probably made the case as eloquently as anyone. Writing in the October 1983 issue of the Futurist, he admitted that "when the United States was a vast empty frontier, it needed immigrants to people an empty continent." But he admonished his readers that "those days are gone, never to return.…The America of the empty frontier has been replaced by an America of 9.5% unemployment."

The arithmetic seems simple. For every immigrant who enters the country and takes a job, there is one less job for an American who was already here. When the United States has nearly one worker in 10 looking for a job already, it certainly doesn't need to add to the problem. And if the immigrant doesn't displace an existing worker by taking a job, he ends up on welfare and becomes a burden to those who have jobs and pay taxes.

What about America's role as a refuge for those in need elsewhere? What about Emma Lazarus's "golden door"? Lamm argued that the country can no longer afford to play that role. "The United States is no longer a frontier; our humanity can no longer be boundless," he declared. "Our increasingly scarce resources and our own multiple economic problems are already substantial enough without encouraging the entrance of many millions of new immigrants who would compound these problems and diminish our standard of living significantly."

The theme of limited resources is a recurring one in such discussions of immigration's threat. The "limits to growth" school that was prominent a decade ago is still sentient despite the end of "the energy crisis." Its advocates still raise the alarm about diminishing resources. Paul Ehrlich of The Population Bomb (1968) warns that even though the US birth rate has dropped below the replacement level, we're still not home free—immigration, particularly illegal immigration, is still increasing the country's population. And this will inevitably lead to more-rapid depletion of the country's natural resources. His prediction is echoed by environmentalist Garrett Hardin and scores of others.

What is to be done? In the December 1982 issue of the Futurist, Lamm argued that America will have to stop accepting any more immigrants at all. His proposal was in the form of a speech to be delivered to the United Nations on July 4 in the year 2000 by a deputy secretary of state, explaining why the United States had closed its borders.

Part of the problem was the mushrooming of population and unemployment in Mexico. "In 1980, Mexico had a labor force of 19 million people, of whom 50% were unemployed or seriously underemployed," reports the fictitious deputy secretary at the turn of the century. "Despite its oil wealth, Mexico could not provide jobs for all its unemployed."

Of course, Mexico is not singled out as the only problem country. The rest of the developing world is forecast by Lamm to do just as poorly by the year 2000. "In 1980, the International Labor Organization estimated that the developing world would have to generate between 600 and 700 million new jobs over the next 20 years just to keep unemployment from rising," the speaker notes. "It just didn't happen. With so much capital spent just to feed and minimally house exploding populations, only 400 to 450 million new jobs have been created."

Lamm's deputy secretary, not surprisingly, sings the theme of resource depletion, too. "Last year's (1999's) embargo on food exports from the United States was only an admission of the inevitable. After a few years of low rainfall, we were growing only enough food to feed our own 300 million citizens."

But people who are concerned about immigration often worry that it is a threat not only to our jobs and well-being but to our freedom itself. As Lamm voiced this fear in his 1983 article, "Democracy has always prospered on growth. The pie usually grew and fostered social and political expectations of progress. The legitimacy of government has not been based so much on justice or religious freedom as on material advancement. Everyone could and did have a better tomorrow. If these conditions disappear, perhaps the legitimacy of our governmental structure will also disappear."

For all these reasons, the US government is urged to further limit or even end immigration. But are they good reasons? If a ceiling is to be placed on legal immigration, it ought to be established for the right reasons. Even if a particular level of immigration were appropriate in the short run, setting it for the wrong reasons would mean that we would probably suffer in the long run, since we would be unlikely to change when change is called for by the right reasons. So it's worth examining the reasons being given for limiting or ending immigration. It's also worth looking at some of the reasons we might even want to increase the level of legal immigration.

To start with, the concern about immigrants taking jobs and the concern about immigrants accelerating the depletion of our natural resources contradict each other. They can't both be valid.

Consider that resources such as iron ore and timber can't be used "as is." Before they can be consumed, they must be transformed into products. The transformation inevitably involves human labor, which is to say it provides jobs. So if an immigrant actually takes a job that would have been held by a nonimmigrant worker, he cannot at the same time increase the depletion of our resources. An immigrant can speed the depletion of our natural resources only by taking a job that didn't exist before he arrived.

But the notion of the displacement of workers itself bears more scrutiny. Abraham Lincoln once remarked that every person is created with two hands and one mouth, and he presumed that the Creator intended those two hands to feed that one mouth. Lincoln was speaking of slavery and objecting to the slaveowner appropriating the product of the slave's labor, but his observation is relevant to the issue of immigrants and unemployment.

Many people look upon jobs as something produced by an economy, in the same way an economy produces steel. This is the idea that underlies Lamm's "forecast" that the world economy will "generate" only 450 million jobs when 700 million will be needed.

We can get a better perspective on the "generation of jobs" if we consider a typical primitive subsistence economy. One of the most prominent features of such an economy is that everyone has a job—even the children and the old folks. For the able-bodied adults, it's a backbreaking, dawn-to-dusk job. "Unemployment" is unheard of. Yet in no sense has the economy provided those jobs. Every person in that economy uses his two hands to provide the food for his mouth (and the clothing on his back and the roof over his head). Each person's existence generates a demand for sustenance; that demand for sustenance in turn provides work for the person. The match is perfect: two hands producing and one mouth consuming.

What has this to do with immigration? Just as nearly every person comes into the world with two hands and one mouth, nearly every immigrant arrives in the country equipped the same way. The match is still perfect. An immigrant demands sustenance and is equipped to provide it. Just as in a subsistence economy, the presence of an immigrant creates a new job while simultaneously providing a worker to fill it.

This can be seen readily when an immigrant enters the country and homesteads a farm, as millions did during the 19th century. Where did that job come from? The immigrant brought it with him. He ate what he grew, and he grew it because he needed to eat. The economy did not generate that job, any more than a subsistence economy generates the jobs in it.

But, the Lamms counter, we no longer have a frontier to absorb millions of immigrants. This agrarian imagery may have been relevant once, but it isn't any longer.

Ironically, their own simple picture of immigrants settling on the frontier never was true. If we check out the history of various immigrant groups in America, as Thomas Sowell did in his book Ethnic America, we find a more-revealing picture.

Sowell reports that in 1900, over half of the farmers in America were of German ancestry. That is, the bulk of the immigrants who settled the frontier were Germans. Even so, during colonial times nearly half the German immigrants were craftsmen rather rather than farmers and worked at their crafts after they immigrated. By the late 19th century, the proportion of farmers among German immigrants had dropped to 25 percent.

Most Jewish immigrants, from colonial times on, were craftsmen and businessmen rather than farmers. In fact, the massive influx of Jews in the late 19th and early 20th centuries (one-third of all Jews in Eastern Europe immigrated to the United States during that period) remained and worked almost exclusively in the large cities of the East.

The vast bulk of Italian immigrants came after the closing of the frontier and took jobs in the port cities where they arrived, despite the fact that most had been peasant farmers in Italy. The Slavs ended up in the coal mines of Pennsylvania and the steel mills of Pittsburgh and Youngstown. Even Japanese immigrants, who are often stereotyped as farmers, followed a similar pattern: only about 40 percent of them worked as farm laborers and the rest worked in industry.

In reality, most of the immigrants to the United States did not settle the frontier. Instead, they crowded into the cities, where they obtained and held jobs supplying their own needs for sustenance in an exchange (not subsistence) economy.

That was the 19th century, but a look at Hong Kong suggests that things are not different today. Hong Kong is a small island. Its area of 1,050 square kilometers holds 5.2 million people, more than the population of any of the smallest 40 members of the United Nations. In fact, Hong Kong has more people than the smallest 35 UN members put together. Its population density of 4,900 persons per square kilometer is the third highest in the world, following Monaco and Gibraltar and just ahead of Singapore.

How could such a crowded speck of land possibly allow immigration? Yet it has. From 1945 to 1956 alone, Hong Kong accepted a million immigrants, including 700,000 refugees, and has admitted another million immigrants in the years since. By comparison, the United States, 9,246 times the size of Hong Kong, has admitted about 13 million legal immigrants since 1945, including about 1 million refugees. This comes to not quite 6 percent of our population. In Hong Kong, about 40 percent of the current population is immigrants, and many of these were refugees who arrived with literally nothing but the clothing on their backs. Some who swam across from China didn't even have that.

How is Hong Kong doing with all those people crowded in there? Very well, thank you. The death rate is 4.8 per 1,000, the lowest in Asia. The infant mortality rate of 9.8 deaths per 1,000 live births is the second best in Asia, bettered only by Japan's 7.1 and better than any nation in North America, including the United States' 11.7. Life expectancy is 72 years for males and 78 years for females, better than virtually every other nation in the world. The literacy rate is 81 percent for all those over 15, one of Asia's highest.

Nor is Hong Kong's economy in the straits one would expect according to popular worries about immigration. Although Hong Kong's government apparently doesn't bother to compile figures on employment, it would appear that it doesn't need to. The 1984 edition of the Encyclopedia Britannica Yearbook, in its entry on unemployment, refers to Hong Kong as an "industrial magnet" that attracts labor. And according to data compiled by the United Nations, Hong Kong's population grew by 12 percent between 1970 and 1976—while during the same time employment in manufacturing grew by 21 percent and wages by 83 percent (compared to a 12 percent increase in consumer prices). Meanwhile, capital formation per capita was growing at 7.5 percent a year. All in all, it doesn't sound as though there was much room for unemployment in immigrant-"burdened" Hong Kong.

In short, the American experience in the 19th and early 20th centuries and the experience of present-day Hong Kong demonstrate that the frontier was largely irrelevant to the absorption of immigrants. The fact that America no longer has a frontier has nothing to do with whether we can "provide jobs" for immigrants today.

If an immigrant brings his job with him, though, why aren't the unemployed creating their own jobs? Why doesn't their demand for sustenance generate work? What happened to the match between their hands and their mouths?

The answer is complicated, but it includes minimum-wage laws, occupational-licensing laws, a legal bias in favor of labor unions, tax laws that encourage consumption and discourage saving, tariffs and import quotas that protect dying industries at the expense of growing ones, and thousands upon thousands of regulations that hinder the growth of business. In a nutshell, those who worry about immigration torpedoing our freedom have it backwards. It is not that freedom prospers only under economic growth. It is that economic growth occurs only under freedom.

The number of workers in the United States doubled between 1874 and 1900, with most of the increase coming from immigration. Despite the increase, real wages rose over 40 percent during that same period. That's what freedom can do to foster prosperity. In today's Hong Kong, under conditions of freedom comparable to those of 19th-century America, economic growth is creating room for the immigrants. In today's America, with our economic freedoms considerably diminished since 1900, the economy is staggering along and nearly 1 out of 10 workers either can't find work or is unwilling to take an available job because the alternative (often, government assistance) is more attractive.

We've really done it to ourselves, and what's worse, at one time we knew better. The original settlers of the United States came to an unknown land to get away from government restrictions, confident that they could prosper if only the government would get out of the way. The signers of the Declaration of Independence would have been horrified to hear Governor Lamm aver that the legitimacy of a government depends on whether people prosper under it. To them, the legitimacy of a government depended on whether the people consented to it rather than having it imposed on them. They knew that prosperity is individuals' own responsibility, and they realized that governments don't create prosperity—at best governments can only refrain from destroying it. In 200 years, the accepted wisdom has changed radically.

Despite the restrictions that hinder growth in our economy, immigrants still manage to find room in it. Julian Simon in The Ultimate Resource notes that within three months of their arrival in the United States, 47 percent of Vietnamese males aged 14 or older had obtained jobs. Simon also points out that when illegal Mexican aliens were removed by the Immigration and Naturalization Service (INS) from jobs they held in California, no native Americans could be found to fill those jobs.

This is a graphic example of aliens creating their own jobs, not displacing native workers. They were taking jobs that native workers, including the unemployed, refused to take. As Tom Bethell put it, writing in National Review, "Illegal aliens are good at lubricating an economy because they…slip into all sorts of economic nooks and crannies, sometimes taking two or three part-time jobs. In properly planned, bureaucratically approved economies, this kind of voluntary activity is against the rules and nothing works very well as a result."

So "jobs" are clearly not a sensible reason for limiting immigration. Instead, unemployment would probably end overnight if we simply abolished the rules that prevent or discourage law-abiding citizens from acting on the fact that they come equipped with both mouths and hands.

Yet it may still seem that those immigrants getting jobs converting raw materials into finished products will hasten the day we run out of natural resources. This supposed linkage of natural resources and wealth is behind the paradox that Lamm finds in the inability of Mexico, even with its great oil wealth, to provide jobs for its citizens. Since an economy doesn't "provide" jobs, the paradox really doesn't exist. Still, the resource worry warrants another look at wealth.

Is oil in the ground "wealth"? That depends on the calendar. In 1800, the answer was no. In 2100, the answer will probably again be no. Oil in the ground is wealth only so long as someone wants it badly enough to trade something for it. It is then worth exactly what people are willing to give in exchange for it. In 1800 no one would have given anything in exchange for it; therefore it was worthless.

This applies not just to oil but to everything. The economic value of anything at all is precisely what people are willing to exchange for it. So if you have something people want, you can gain access to raw materials that you want. Consider Hong Kong again. It not only doesn't have a frontier to absorb immigrants, it has no natural resources to speak of—not even a supply of fresh water. Hong Kong's drinking water comes from reservoirs that are filled during the rainy season and last the rest of the year. Yet with virtually no natural resources at all, the people there still generate wealth, importing the raw materials they need.

But there's a deeper issue yet. People do not exchange what they have for products made of natural resources simply because they want something made of iron or of wood. People want products for the services that they can perform, not for the products themselves. As someone has put it, the real reason you buy a quarter-inch drill is that you want a quarter-inch hole. So the issue is not natural resources themselves but how we can continue to get the services we want when there are more and more people to share an earth of fixed size—or, for that matter, to share a United States of fixed size.

By and large, technology is a way of getting more and more services out of a given amount of material. That may mean extracting specific materials out of leaner and leaner ores, or it may mean doing more with a given amount of refined material. Consider the amount of material that goes into a transistor radio of today compared with the amount of material that went into a vacuum-tube radio of a generation ago. The difference is one measure of the progress of technology since then. If technology advances rapidly enough, we can continue to get the services we want even though we have to divide a fixed amount of iron, copper, and so on among a larger number of people.

So the question is put one step back—can we be sure technology will advance rapidly enough to keep pace with population? If not, it seems that population growth, including immigration, must be limited to a rate with which technology can keep pace. But this is to misconceive why technological developments occur. As Julian Simon emphasizes in The Ultimate Resource, "the development of new methods that prevent scarcity is not fortuitous." Drawing from history, Simon shows that "to a large extent new methods are invented and developed in response to the signals of impending scarcity." Thus his ultimate conclusion, that "an increase of human beings constitutes an addition to the crucial stock of resources along with causing additional consumption of resources." In short, people create resources by finding ways to do more with less.

This makes it sound as though population increase, including immigration, might even benefit a nation, particularly if that nation allows the increased population the freedom to use their hands to feed their mouths. Simon has documented this possibility, showing that people begin to produce net economic benefits to society about 30 years after they are born. In the case of immigrants, the payoff usually comes even sooner. Simon's calculations show that the "return on investment" legal immigrants make to the rest of society is about 20 percent per annum, certainly one of the best payoffs around today. The payoff from illegal immigrants is even higher, since they pay taxes but don't get Social Security and other benefits.

So those who worry about economic harm from immigration are "dismembering" the immigrants: those who worry about immigrants taking jobs are looking at their hands but forgetting about their mouths; those who worry about immigrants consuming resources are looking at their mouths but forgetting their hands. In fact, the immigrant is a whole person. He has two hands and one mouth. He brings with him the job of providing his sustenance, and he brings with him the hands to produce the resources he consumes.

Does this mean that we ought to throw open the gates and let anyone enter who wants to? The American experience of a century ago and the experience of Hong Kong today suggest that we might very well be better off for doing so. However, that's another subject entirely. The point here is simply that whatever we do about the level of immigration shouldn't be done relying on the standard arguments about jobs and resources. They are false to the core.

Joseph P. Martino is a technology forecaster at the Research Institute of the University of Dayton. He has degrees in physics, electrical engineering, and mathematics and is an associate editor of Technological Forecasting and Social Change.