MONTANA, United States. — While I am personally uncomfortable with the idea of open borders, the topic is worth studying as economist Bryan Caplan does in Open Borders: The Science and Ethics of Immigration. Caplan’s argument is categorical: “Opening all borders would usher in a booming global economy practically eliminating poverty worldwide and ultimately benefiting all humanity.”
He calculates that when the average third-world worker moves to a country like the United States, that worker’s productivity increases by 400 percent. The poorer the country of origin, the greater the productivity gains. Caplan’s point is that the same workers are more productive in the United States than in Nigeria or Haiti. In other words, the earnings gap results not from who you are, but from where you are.
Caplan is a meticulous scholar, and he has crunched the numbers to address the various objections to open immigration. He acknowledges the risks associated with open borders but, given that World Gross Product would double if anyone could take a job anywhere, the downside risks of open borders would have to be astronomical for the cost to outweigh its benefits.
When it comes to supply and demand, we understand intuitively the supply-side effect of immigrants such as an increase of immigrant workers that drives down wages. Yet, we fail to see the demand-side of immigrants as consumers. When selling our labor, immigrants that sell the same labor, may hurt us in the marketplace. But, we are helped, in the same marketplace, by immigrants that buy the goods and services that we sell.
Also, by world standards, even low-skilled American workers are high-skilled. They are literate, fluid in English, and familiar with the modern world. Therefore, low-skilled American workers often end up training and managing new arrivals, not competing with them. Think for instance of jobs in the construction industry.
Immigration opponents claim that immigrants lower our country’s average standard of living. This is technically true, but it is a meaningless statistic. Say that the average standard of living in the United States and in a foreign country is measured by average incomes of $50,000 and $5,000 respectively. This yields a combined World Gross Product of $55,000. If under open borders the foreigner chooses to work in the U.S for $20,000, their combined World Gross Product rises to $70,000. Humanity is enriched.
Notice, however, that although the average native worker in the U.S. is still making $50,000, the average income in the United States is now lower at $35,000 ($50,000 + $20,000 / 2). Yes, the immigrant’s arrival has lowered the statistical average income, but his income, and the income of the world, has increased at no cost to the native worker. Admittedly this is a simplistic illustration, over time the supply of lower cost labor could bring down the income of that native worker. The point is simply that the often cited statistics need scrutiny.
Another objection to immigration is the fiscal burden that it imposes on government services. But many government services are what economists call “non-rival” services: services where the total cost of the services stays the same even as population increases. National defense is the classic example of a “non-rival” service that does not increase in cost due to population growth.
Of the remaining “rival spending” on government services, over two thirds is for the very young and the very old. Professor Caplan’s work shows that most immigrants are of working age, neither very young nor very old. Rather than a fiscal burden, working age immigrants mostly contribute thru taxation to programs for the young and the old. A report by the National Academy of Science concludes that the overall long-term fiscal effect of a new immigrant is a positive $259,000. Unless immigrants are old and low skilled, they more than pay for themselves.
Caplan numerically addresses other objections to unlimited immigration such as criminality, terrorism, political ideology, cultural dilution and more. And yet, I remain uncomfortable with the idea of open borders. But now, I am even more uncomfortable because I do not know why I remain uncomfortable.
Dr. Azel‘s latest book is “Liberty for Beginners”
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