Archive - Aug 28, 2006
How Unskilled Immigrants Hurt Our Economy
Submitted by Jonathan on Mon, 2006-08-28 21:06A different point of view on the immigration debate than would normally catch my eye...via the August 18, 2006, issue of The Week, from an article by Steven Malanga in City Journal:
Since the mid-1960s, America has welcomed nearly 30 million legal immigrants and received perhaps another 15 million illegals, numbers unprecedented in our history. These immigrants have picked our fruit, cleaned our homes, cut our grass, worked in our factories, and washed our cars. But they have also crowded into our hospital emergency rooms, schools, and government-subsidized aid programs, sparking a fierce debate about their contributions to our society and the costs they impose on it.
Advocates of open immigration argue that...[it] is essential for our American economy: our businesses need workers like him, because we have a shortage of people willing to do low-wage work. Moreover, the free movement of labor in a global economy pays off for the United States, because immigrants bring skills and capital that expand our economy and offset immigration's costs. Like tax cuts, supporters argue, immigration pays for itself.
But...America does not have a vast labor shortage that requires waves of low-wage immigrants to alleviate; in fact, unemployment among unskilled workers is high—about 30 percent.
Yet while these workers add little to our economy, they come at great cost...Increasing numbers of them arrive with little education and none of the skills necessary to succeed in a modern economy. Many may wind up stuck on our lowest economic rungs, where they will rely on something that immigrants of other generations didn't have: a vast U.S. welfare and social-services apparatus that has enormously amplified the cost of immigration....
Unlike the immigrants of 100 years ago, whose skills reflected or surpassed those of the native workforce at the time, many of today's arrivals, particularly the more than half who now come from Central and South America, are farmworkers in their home countries who come here with little education or even basic training in blue-collar occupations like carpentry or machinery. (A century ago, farmworkers made up 35 percent of the U.S. labor force, compared with the under 2 percent who produce a surplus of food today.) Nearly two-thirds of Mexican immigrants, for instance, are high school dropouts, and most wind up doing either unskilled factory work or small-scale construction projects, or they work in service industries, where they compete for entry-level jobs against one another, against the adult children of other immigrants, and against native-born high school dropouts...
Although open-borders advocates say that these workers are simply taking jobs Americans don't want, studies show that the immigrants drive down wages of native-born workers and squeeze them out of certain industries. Harvard economists George Borjas and Lawrence Katz, for instance, estimate that low-wage immigration cuts the wages for the average native-born high school dropout by some 8 percent, or more than $1,200 a year. Other economists find that the new workers also push down wages significantly for immigrants already here and native-born Hispanics...
Because so much of our legal and illegal immigrant labor is concentrated in such fringe, low-wage employment, its overall impact on our economy is extremely small. A 1997 National Academy of Sciences study estimated that immigration's net benefit to the American economy raises the average income of the native-born by only some $10 billion a year—about $120 per household. And that meager contribution is not the result of immigrants helping to build our essential industries or making us more competitive globally but instead merely delivering our pizzas and cutting our grass. Estimates by pro-immigration forces that foreign workers contribute much more to the economy, boosting annual gross domestic product by hundreds of billions of dollars, generally just tally what immigrants earn here, while ignoring the offsetting effect they have on the wages of native-born workers.
If the benefits of the current generation of migrants are small, the costs are large and growing because of America's vast range of social programs and the wide advocacy network that strives to hook low-earning legal and illegal immigrants into these programs. A 1998 National Academy of Sciences study found that more than 30 percent of California's foreign-born were on Medicaid—including 37 percent of all Hispanic households—compared with 14 percent of native-born households. The foreign-born were more than twice as likely as the native-born to be on welfare, and their children were nearly five times as likely to be in means-tested government lunch programs. Native-born households pay for much of this, the study found, because they earn more and pay higher taxes—and are more likely to comply with tax laws. Recent immigrants, by contrast, have much lower levels of income and tax compliance (another study estimated that only 56 percent of illegals in California have taxes deducted from their earnings, for instance). The study's conclusion: immigrant families cost each native-born household in California an additional $1,200 a year in taxes.
Immigration's bottom line has shifted so sharply that in a high-immigration state like California, native-born residents are paying up to ten times more in state and local taxes than immigrants generate in economic benefits.
What to do about it then? The author basically says, stop coddling them so they'll go back home:
...end the economic incentives that keep them here. We could prompt a great remigration home if, first off, state and local governments in jurisdictions like New York and California would stop using their vast resources to aid illegal immigrants. Second, the federal government can take the tougher approach that it failed to take after the 1986 act. It can require employers to verify Social Security numbers and immigration status before hiring, so that we bar illegals from many jobs. It can deport those caught here. And it can refuse to give those who remain the same benefits as U.S. citizens.
All in all, this article makes me think...but the tone is still distasteful...the author seems to take the point of view that there is one and only one criterion for making decisions...what is best for native-born Americans. It's not that simple.
The Coming Tsunami of Trash
Submitted by Jonathan on Mon, 2006-08-28 20:56Via the August 18, 2006, issue of The Week, from an opinion piece in the LA Times by Niall Ferguson:
It was 99 years ago that Leo Hendrik Baekeland invented the first plastic based on a synthetic polymer — Bakelite — and ushered in the age of plastic. From that moment, a new kind of pollutant entered the sea; one that took a century or more to degrade.
The plastic plague is a global epidemic. According to the United Nations Environment Program, about 46,000 pieces of plastic are floating on every square mile of the world's oceans.
The problem is more than merely aesthetic. Last week, this newspaper carried a shocking report from Midway Atoll, which is about as isolated a spot as the world has to offer. Hardly anyone lives there, so the number of bottles thrown in the sea can't be large. And yet birdlife on Midway is being devastated as albatrosses inadvertently feed their chicks lethal fragments of plastic picked up from what's known as the Eastern Garbage Patch, a virtual island of trash formed by the currents of the North Pacific subtropical gyre.
The Eastern Garbage Patch on Wikipedia.
Welfare Queens on Tractors
Submitted by Jonathan on Mon, 2006-08-28 20:49Via the August 18, 2006, issue of The Week, from an op-ed piece in the LA Times by Jonah Goldberg:
There are few issues for which the political consensus is so distant from both common sense and expert opinion. Right-wing economists, left-wing environmentalists and almost anybody in-between who doesn't receive a check from the Department of Agriculture or depend on a political donation from said recipients understand that Americans are spending billions to prop up the last of the horse-and-buggy industries.
At this nation's founding, nearly nine out of 10 workers were employed in agriculture. By 1900 that fell to fewer than four in 10. Today, fewer than one in every 100 workers is in agriculture, and less than 1% of gross domestic product is attributable to agriculture. Yet this country spends billions upon billions of dollars subsidizing a system that makes almost everyone in the world worse off.
Our system is so complicated — i.e. rigged — that it's almost impossible to know how much agricultural subsidies cost U.S. taxpayers. But we know from the Washington Post's recent reporting that since 2000 the U.S. government paid out $1.3 billion to "farmers" who don't farm. They were simply "compensated" for owning land previously used for farming. A Houston surgeon received nearly $500,000 to alleviate his hardship. Cash payments have cost $172 billion over the last decade, and $25 billion in 2005 alone, nearly 50% more than what was paid to families receiving welfare.
But those sorts of numbers barely tell the story of our appallingly immoral agricultural corporatism. Subsidies combined with trade barriers (another term for subsidy) prop up the price of food for consumers at home and hurt farmers abroad. This is repugnant because agriculture is a keystone industry for developing nations and a luxury for developed ones. This keeps Third World nations impoverished, economically dependent and politically unstable. Our farm subsidies alone — forget trade barriers — cost developing countries $24 billion every year, according to the National Center for Policy Analysis. Letting poor nations prosper would be worth a lot more than the equivalent amount in foreign aid. But Big Agriculture likes foreign aid because it allows for the dumping of wheat and other crops on the world market, which perpetuates the cycle of dependency.
Then, of course, there's the environment. Subsidies wreak havoc on the ecosystem...
There's a lot of romance about the family farm in this country. But that's what it is: romance. Most of the Welfare Kings are rich men — buffalo farmer and CNN founder Ted Turner is one of the biggest. Of course, there are small farmers out there, but they have no more right to live off the government teat than the corner bakery I so loved as a child but that couldn't keep up with the times. We don't have a political system addicted to keeping bakers rich.

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