| [T]his argument would have weight only if it
could be shown that the influx of unskilled workers
substantially increased the short-run reduction in the
standard of living of the present unskilled workers, over and
above the reduction just discussed. This cannot be shown,
because by the time the influx of immigrants is able to have a
significant depressing effect on the relative wages of
unskilled workers, it also exerts a significant positive
effect on the absolute standard of living of everyone.
Consider. If the freedom of immigration means an additional
increase in the number of workers of about 1½ percent
a year, then whatever the proportions of skilled and unskilled
labor among the immigrants, in any one year it can change the
proportion among workers as a whole only very slightly. As a
hypothetical illustration, if initially half the workers are
skilled and half are unskilled, while among the immigrants
only one-third are skilled and two-thirds are unskilled, the
effect in one year is to change the overall composition of the
labor force to a little more than 49¾ percent
skilled, and a little less than 50¼ percent
unskilled. (This conclusion follows by applying a rate of
increase of 2 percent to the unskilled half of the population
and a rate of increase of 1 percent to the skilled half of the
population, and then expressing the results as percentages of
the combined total.)
Furthermore, this change in the relative composition of the
labor force does not go on indefinitely, because as time
passes more and more of the earlier immigrants move up the
ladder into skilled jobs. And among their children, the
proportion of skilled and unskilled workers will be about the
same as among the original population.
But what is most important is that with each passing year
in which the proportion of unskilled workers becomes more
pronounced, until it finally levels off at its new
equilibrium, more and more of the earlier immigrants have had
time to achieve positions from which they can begin making
contributions that raise the general standard of living. Thus,
after ten years, say, while the overall proportion of
unskilled labor has risen in our hypothetical example from 50
percent to about 52½ percent, there
will be immigrants who have established their own businesses
and introduced important innovations having a growing impact
on the rest of the economic system and operating to raise the
standard of living of everyone. And with each passing year,
this effect will become more pronounced. (The figure of 52½
percent results from applying to the half of the
population that is initially unskilled a compound rate of
increase of 2 percent for ten years, and to the half of the
population that is initially skilled a compound rate of
increase of 1 percent for ten years, and then taking the
former result as a percentage of the combined result.)
Thus, the effect of the change in the proportions of
skilled and unskilled labor operates perhaps to postpone
somewhat the restoration and increase in the standard of
living of the unskilled workers. At the same time, it
accelerates the restoration and increase in the standard of
living of the skilled workers. For what happens is that while
the unskilled workers, with their relatively lower wages, are
unable to buy as many of the goods and services of the skilled
workers, the skilled workers are able to buy correspondingly
more of the goods and services of the unskilled workers.
Thus, overall, the effect of free immigration is that the
immigrants enjoy a substantial gain immediately, while the
original population gains after a period of time, which is
shorter for skilled workers and longer for unskilled workers.
Within the span of a single generation it is likely that
almost everybody will have gained and from that point on will
gain more and more. For by then, the immigrants and their
children will have been making important contributions for
some time, and will continue to do so, while further changes
in the proportion between skilled and unskilled labor will
probably have come to a halt.
The movement of workers from lower-paying jobs in less
free, less rational countries to higher-paying jobs in a
freer, more rational country does not equalize wage rates, but
increases the differences still further, because the
productivity of labor in the freer, more rational country will
tend to grow all the more rapidly relative to the productivity
of labor in the other countries, thanks to the unlocking of
human talent and the capital formation that is brought about
in the freer, more rational country. Thus, free immigration
contributes to the emergence of virtually two different
worlds, as population moves from politically created
wastelands into countries in which freedom and rationality
make possible continuous economic progress. *
* *
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