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Immigration is Not Charity

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Immigration is Not Charity

The biggest misconception about immigration is that it is a zero-sum game--that there is a finite number of jobs which immigrants "take" from the native-born and that immigrants consume social services without paying anything in. Several state governments--including Arizona, Alabama, South Carolina, and others--have bought into this myth, enacting measures to address what they perceive as problems arising from undocumented immigration. Yet anti-immigration laws hurt not only immigrants, but native-born Americans as well.

Alabama's new immigration law HB 56 clearly hurts employers. Section 15 of the law punishes employers who knowingly or intentionally hire undocumented immigrants. The punishments escalate for each offense. A first offense results in the firing of all undocumented workers, business licenses suspension for 10 working days, and administrative penalties. For a second offense, the Alabama state government will revoke all of the business' licenses and permits for the location where the offense took place. For a third offense, the government permanently revokes all of the business' licenses from all of its locations in the entire state - destroying the business. (That section of HB 56 is called the business death penalty and is based on a similar section of Arizona's anti-immigration law SB 1070 and Legal Arizona Workers Act). 

Laws like HB 56 also hurt farmers. Undocumented immigrants are a major source of labor for Alabama's farming industry, which adds more than $5 billion annually to the state GDP. In neighboring Georgia, where lawmakers recently passed a law similar to HB 56, farmers now face severe labor shortages, putting $300 million of planted fruits and vegetables at risk, according to the Georgia Fruit and Vegetable Growers Association. Without access to low-skilled labor, many farmers will stop planting altogether, decrease the acreage under cultivation, or start planting less profitable crops that can be harvested by expensive machinery. 

Georgia's solution to the labor shortage has been to conscript criminal offenders and probationers as field hands. Benito Mendez, crew leader for a crew of Hispanic pickers said, "It's not going to work. ... No way. If I'm going to depend on the probation people, I'm never going to get the crops up." As economics professor Alexander Tabarrok observes, the Georgia immigration law has "turned good workers into criminals and turned criminals into bad workers, losing on both ends of the deal."

Construction in Alabama is also getting pummeled by HB 56. James Latham, chief executive of WAR Construction Inc. in Tuscaloosa and president of the Alabama Associated General Contractors, is concerned that the exodus of undocumented workers will slow down construction projects. He said, "We are seeing smaller crews, and work taking longer to get accomplished, due to less available workers."

HB 56 and laws like it also hurt the global and American economies. Immigrants come from countries where labor is abundant but opportunity is scarce. America's relatively free market has a "place premium" that raises wages for immigrants. Economists Michael Clemens, Claudio Montenegro, and Lant Pritchett show that immigrants, controlled for education and other factors, see an average five-fold increase in wages by moving to the U.S.

More consumers with greater purchasing power is good for business all around. Clemens recently wrote in the Journal of Economic Perspectives that unlimited immigration would increase worldwide GDP by 50 to 150 percent. That's a whopping increase of $32.5 to $97.5 trillion in global yearly production. Most of the benefits would accrue to the immigrants themselves, but trillions of dollars would also benefit Americans. Even diminishing immigration barriers by a little will boost American economic growth substantially. Every day we delay reform costs the economy.

Immigration is like other voluntary trades between two parties--both sides benefit. Immigrants get to make more money; employers get a greater pool of talent from which to choose workers; consumers benefit from lower prices and more business entrepreneurship, innovation, and services; and many Americans see their wages increase.

Immigration benefits both sides. It is neither a zero-sum game nor charity for poor foreigners. The government should get out of the way and let Americans and immigrants work together to each other's benefit.