Immigration Is Good for the U.S. Economy

Let them in.


Immigration hawks make many weak arguments, so it is hard to pick the weakest. But one contender you see a lot goes like this: "If you think the U.S. should welcome those people, then I assume you'll be putting some of them up in your own home, won'tcha? Hunh? Howaboutit, buddy?"

At first blush this could seem like a pretty devastating takedown, along the lines of the old joke by Will Rogers—who once said he was so old he could remember when a liberal was someone who was generous with his own money.

A few years ago Arthur Brooks gave that joke empirical heft in his book Who Really Cares? He went in search of data about charitable giving and found, to his surprise, that conservatives as a group tend to be far more personally generous than liberals. Among other things, he noted that if liberals donated blood at the same rate conservatives do, the nation's blood supply would jump by 45 percent. This confounding of stereotypes (liberals are compassionate, conservatives are not) seems mystifying, at least until you note economist Bryan Caplan's observation that while voluntary charity is costly to the giver, voting for charity is virtually free.

That's what makes the immigration hawks' argument seem so powerful: It makes the pro-immigration side look like hypocrites.

But that impression rests on a misunderstanding. Because, in fact, a great many Americans are willing to offering housing to immigrants. And to hire them, and to sell them groceries, and peddle clothing to them, and so on. In fact, it is precisely the willingness of many Americans to hire immigrants that drives another anti-immigration argument: If we let too many immigrants into the country, they will take our jobs. (More on that fallacy shortly.)

So here comes Juan, traipsing across the border in search of a better life. Lucas runs a construction company and would be happy to pay Juan to swing a hammer. Mike owns an apartment complex and would gladly rent Juan a room. Amanda would like to sell Juan some groceries. Steve wants Juan to have a few drinks at his nightclub. And so on.

Meanwhile there's Sebastian, a professor of literary theory, who supports broader immigration policy but doesn't want to turn his personal residence into a rooming house for new undocumented arrivals. Imagine how ridiculous it would be to say to Lucas and Mike and Amanda and Steve: "Look, we know you all want to do business with Juan—but we can't let you, because Sebastian isn't interested." Where is the sense in that?

To hear some border hawks talk, immigrants want to come to America only so they can sponge off welfare programs supported by hardworking Americans. The truth is much closer to the opposite. Among working-age men, immigrants are more likely to be working than native U.S. citizens. In fact, illegal immigrants are the most likely to work: In one recent year, 93 percent of undocumented alien males participated in the labor force. The figure for legal immigrants was 86 percent. Among native-born American men, it was 81 percent.

Immigrants also show a greater entrepreneurial spirit than native-born Americans. In a 2012 report, the Partnership for a New American Economy notes this: "Over the last 15 years, while native-born Americans have become less likely to start a business, immigrants have steadily picked up the slack. Immigrants are now more than twice as likely as the native-born to start a business and were responsible for more than one in every four (28 percent) U.S. businesses founded in 2011, significantly outpacing their share of the population (12.9 percent)."

Immigrant-owned businesses in the U.S. generate more than $775 billion in sales and pay more than $126 billion in payroll each year. Much of that prosperity derives from exports—"immigrant-owned businesses are more than 60 percent more likely to export than non-immigrant businesses," says the report—which makes perfect sense (who better than a Guatemalan native to sell U.S. goods in Guatemala?).

The entrepreneurship figures are significant because most new jobs are created by new businesses. As the Partnership paper reports, "one in every 10 workers at privately owned U.S. companies now works at an immigrant-owned company. … Altogether, immigrant-owned businesses have collectively created 4 million jobs that exist today in the United States." 

Were it not for business starts by immigrants, the U.S. jobs picture would look much more grim than it does. Immigrants aren't taking jobs from millions of Americans—they're giving jobs to millions of Americans. And doing business with millions more. 

But not the Sebastian of our example above. Doesn't Sebastian's willingness to let Juan enter the country, combined with his unwillingness to let Juan stay at his house, still make him a hypocrite? No. If Sebastian is willing to let Juan enter the country so he can do business with Lucas and Mike and Amanda and Steve, he isn't being a moral phony. He is simply minding his own business. 

Maybe the border hawks should try it some time.