Following the recent events at the Texas border and the associated supreme court ruling, I’ve felt compelled to write a post regarding immigration in the U.S. It’s an issue that I’ve been hesitant to take a stance on publicly, because I can easily understand the reasoning behind a variety of positions. It shouldn’t be a binary choice between allowing all migrants through the border with no process or completely closing the border and deporting everyone that’s here. However, I often feel as if those are the only options popular in the general discourse. There are a number of policy solutions in-between and I would contend that the best policy solution for the current crisis our nation is facing includes, but is not solely dictated by direct immigration policy.

Many of the negative externalities of mass illegal immigration are caused not by the general fact that there is a large number of migrants, but by other pre-existing policies whose negative effects are exacerbated by the immigration. In order to reach the economic and societal benefits that should accompany free movement of people, the U.S. will first have to change its course on these policies. Until the point of resolving those issues, the U.S. should allow a slow drip of qualified applicants into the country.

Economic benefits of immigration

From an economic perspective, the free movement of people comes with many positives. Much like free-trade, free movement optimizes economic productivity because people are able to move from one place to another until supply and demand balances out. From a theoretical perspective, if people are able to move between the areas with the highest demand for labor and the most desirability for living, they create opportunity for both themselves and the economy they are contributing to. We see this many times with internal migration patterns. Employment opportunities, policy differences, and housing availability all contribute to recognizable patterns of large-scale movement between states.

This is of course the case with rational immigration. Clearly, there are also levels and rates of migration that begin to represent a strain on the local economy of the place receiving the migrants rather than a positive. As a high-level example of this, If everyone living in Asia were to decide at once to pack-up shop and move to Europe this would create a highly inefficient use of land and resources that would ultimately destroy the welfare of the citizens already living in the land and those entering it. Of course you would never see this exact scenario play-out and if it did, a mix of people globally would be rational enough to homestead the vast amounts of land and infrastructure left-behind in the migration, ultimately creating a new balance. A new balance is what should always be expected as those who migrate benefit from the new opportunities they are pursuing and those remaining obtain an increased share of influence in their localities.

From a theoretical perspective rational immigration creates opportunity for all-involved, but this is not just theoretical, it is borne out in empirical evidence. High levels of immigration can offset declining birth-rates, increase job growth, and bring innovation.

Research by the National Foundation for American policy on 248 metro areas in the United States showed that large numbers of immigrants in metro areas is correlated with faster growth in jobs and new business creation. It is important to note as well, that immigration has been demonstrated by the National Bureau of Economic Research to have very limited impact on the native work-force’s ability to find work or overall wages. Kenan Fikri, Director of research at the Economic Innovation group, suggests that it could actually improve the prospects of the native work-force whether immigrants be low or high-skilled laborers, due to the fact that immigrants entering the lower end of the work-force can free up native workers to pursue more highly valued work and immigrants entering the higher tier of the workforce could increase the overall diversity of skill and perspectives.

Additionally, immigrants do not just consume jobs, they add demand and even create jobs by founding companies of their own. MIT researchers utilizing data from over 1 million businesses founded between 2005 and 2010 discovered that immigrants were 80 percent more likely to found businesses than native-born citizens and on average the businesses were 1 percent larger than businesses founded by native born citizens. Immigrants with high-levels of education likely skew the overall numbers significantly, but it is also possible that people willing to take risks to pursue a better life may be more adventurous with business as well. Regardless of the specific explanation, the amount of wealth available is not a static pool, but something that grows exponentially with the application of productive labor.

Potential issues caused by current immigration and relevant solutions

While I was able to find very little substantial empirical evidence as to the risks of immigration, I do want to recognize that there are serious issues that present which may potentially offset the economic benefits detailed here. As I see it, issues which create cause for concern with illegal immigration include security threats, trafficking and economic shortages. While I do believe that all immigration should follow a more streamlined legal process, I also believe that every single one of these issues can in large part be alleviated by making changes to related policies that come to bear on the issue.

Taking these in stride; Security threats are often a result of inflammatory foreign policy, drug trafficking was made lucrative by the war on drugs itself, and economic issues related to immigration are the negative results of existing economic policy seen on a larger scale.

Blowback from U.S. foreign policy

Blowback is a term used to describe the violent response to actions taken by the U.S. government. It can take many forms, but it is often manifested as terrorist attacks whose stated intention is to protest U.S. involvement financially, militarily, and often violently in the middle-east. Ron Paul awoke many people to this reality when he suggested in the 2008 Republican presidential debates that the 9/11 attacks were a response to our bombing campaigns in Iraq.

“They don’t come here to attack us because we’re rich and free. They come and they attack us because we’re over there,” Paul said.

He was right. While terrorist attacks are an evil and counterproductive way of protesting, in reality many terrorist attacks are a direct response to decades of U.S. intervention in the middle-east. In some cases, we’ve gotten this information in the terrorists’ own words, including Osama Bin Laden’s letter to America and statements from the Pulse Nightclub shooter that his attack was intended to send a message to the U.S. to stop the killing of muslims in the Middle-East.

While vetting and documenting for security purposes every person who immigrated to the United States is the clearest direct solution to limiting the risk for violent attacks, the U.S. should go further and end its interventions in Israel, Iraq, Syria, Yemen, and Ukraine. There are a great many benefits from ending these interventions, including setting the U.S. back on a track to fiscal solvency, de-escalating tensions with other major powers and improving the overall opinion of the U.S. globally.

Black markets and the accompanying violence

Much of the drug-trafficking activities cartels have been involved with since their inception could be disincentivized by legalizing and minimally regulating illicit drugs. The criminalization of drugs and the billions of dollars invested in related policing activities allow for the substantiation of a black market that is extremely lucrative. Prices on black markets tend to be extremely inflated due to the high-costs associated with defying the law and potential violence— and that violence certainly is propagated in a black market.

Analysis of homicide rates during the prohibition era, shows that homicides continued to increase throughout prohibition and sharply declined following it. While this is not direct evidence that the increase in homicides during prohibition was actually caused by prohibition, it shows that there was likely an impact. Up to 50 percent of U.S. homicides are related to the drug war according to the Foundation For Economic Education.

Black Markets are also not inevitable. The higher the barrier to legally providing for a demand, the more likely it will be lucratively provided for illegally. This has been seen in the shift of focus for cartels from Marijuana to cigarettes over recent years. As marijuana has been legalized in 23 states, its profitability for cartels has been substantially reduced. In the meantime, cartels have started to partially shift their business to tobacco products. In fact, 4 U.S. Senators sent an open letter to the Secretary of State raising this concern. There are a couple reasons for this shift in focus apart from legalization or decriminalization of marijuana in many states. These include increased cigarette taxes and bans on Menthol cigarettes, along with the move of the legal purchase age from 18 to 21. These increased restrictions have the counter-effect of providing additional avenues of business for cartels.

Economic strain from harmful regulation

Another way to alleviate the potential economic strain of large-scale immigration causing housing shortages and job shortages is to change housing regulations and repeal minimum wage laws.

Artificial restrictions on the supply of housing cause rising prices and make it more difficult for the market to quickly adjust to demand. These restrictions include zoning regulations and government owned land which restricts the overall ability for cities to productively expand.

As of 2019 it was illegal to build anything other than a free-standing single-family home on 75 percent of zoned land, according to New York Times reporting. Restricting this large area to only single-family homes is a large contributor to rising housing prices and the difficulty finding a suitable living situation which many Americans face. If many of these zoned areas were opened up to apartments, town-homes, and mixed use commercial and residential areas, no doubt stand-alone homes would still be available to those who preferred them and could afford them. Those who couldn’t would have a greater number of options available to them.

On top of this, in many Western States greater than 30 percent of the land is owned by the government. This further restricts the ability of people moving into these western states to find a suitable place to live. Any of this land, not owned as a part of a national or state parks system should be opened up fairly to sale and homesteading.

Minimum wage laws restrict people’s ability to find work and gain valuable experience. Due to the fact that people buy less of something that is priced higher, under the artificially high prices that come with minimum wage laws, employers hire less labor than they would under the law of supply and demand.

Importantly, the vast majority of employment is contracted at a wage above the minimum wage so the minimum wage only affects a subset of workers who are typically young and have few trained skills. This group is particularly negatively impacted by the increase in unemployment caused by minimum wage, due to the fact that they miss out on valuable formative experience. In his book, Social Justice Fallacies, Thomas Sowell provides empirical evidence showing an increase in unemployment amongst teenage black males from under 10 percent in 1948 and the early 1950s to consistently over 20 percent, sometimes peaking over 40 percent in the 1960s and 70s. This rise in unemployment can primarily be attributed to a series of raises in the federal minimum wage over that period.

Sowell explains that with the subsequent increases in minimum wage, there was a larger pool of applicants for a smaller number of jobs and the cost of discrimination was lowered. Since the cost of labor was raised, creating a gap in the amount of job seekers vs. the amount of jobs available, employers could afford to be more selective with who they employed than before.

Sowell also addresses concerns about rising wage gaps between various income brackets. It is worth noticing, he explains, that these brackets of income are not stagnant groups— people move in and out of them over the course of their careers. A study by Thomas Hirschl and Mark Rank showed that before age 60 over 50 percent of the U.S. population spends at least one year in the top 10 percent of income earners and nearly 70 percent will reach the top 20 percent of income earners. According to the same study, people’s top years of earnings are typically towards the end of their working age career, between ages 45 and fifty-four. Individual prosperity is built over time, by gaining new experience, skills and connections. Restricting people’s possibility to gain any form of employment does not help them to work towards individual prosperity.

Final Thoughts

Immigration is an important and personal topic to many people which warrants an open discussion into its results and what reforms can be taken to improve them. As I have attempted to demonstrate here, the free movement of people between countries should lead to a net increase in prosperity and productivity, but in reality it is a mixed bag of positive and negative externalities. While there are actions that can be taken specifically to improve the way immigrants are processed and integrated into society, there are also many related policy changes that can help improve the chances that migrants will peacefully and productively integrate into our society. These include, ending U.S. interventions in the middle-east which create blowback terrorism, decriminalizing drugs to decrease the incentives for violent-illicit markets and changing existing regulations to increase the level of available opportunities.