Reply To: Is there a economic case against immigration?


The argument that immigration is an economic loss to society because it lowers the wages of workers who compete with immigrants is incorrect. If it were true, then population growth from any source, foreign or domestic, would lower social well being. Social well-being would also decline if people in one country integrated their economic activity with people in another country. In other words, free trade would lower standards of living..

Extending the division of labor results in greater physical production. Reallocating resources from lower to higher valued uses results in higher-valued production. Accumulating capital results in higher-value goods being produced in lower-cost ways. These economic principles transcend political boarders.

While the dynamic of the market improves the economizing of resources for society at large it doesn’t and can’t guarantee that each person has a higher standard of living after each adjustment than he did before. Entrepreneurs who lack the foresight to anticipate declines in consumer demand for their products will see their incomes decline as entrepreneurs with superior foresight attract consumer demand. Workers for inferior entrepreneurs will see their incomes decline if they choose to remain in their employ. The only way to prevent such changes in income patterns is to destroy the market altogether.

But this doesn’t seem to be the complaint of the anti-immigration economists, In other words, they don’t seem to be merely apologists for some special interest group, e.g., they want protectionist measures designed to prevent immigrants or foreigners in their own country from competing against domestic garment workers to help out the domestic garment workers even though society at large would be worse off.

They seem to be claiming that by lowering wages in certain labor markets an influx of immigrants lowers the average standard of living in the country. But that cannot be the case in terms of physical production of goods, i.e., standard of living, as long as immigrants produce at least as much as much as they consume. With an influx of immigrant garment workers, for example, wages will decline for all garment workers, but the physical production of domestic garment workers who remain in their jobs will not decline. So if the immigrant workers produce at least as much as they consume, then the average standard of living will not decline.

And if what the anti-immigration economists’ seem to be claiming was correct, then it would be an argument against free trade and not just immigration. If foreign wages for garment workers are lower than domestic wages, then capitalists will invest in foreign countries which will lower the demand for domestic garment workers and hence, their wages. The result, they claim, are lower average wages domestically. But, again, this argument conflates monetary with real wages. Average standards of living will rise for workers in society at large even though domestic garment workers’ average share of goods produced in society might be lower.