Missouri's 7th District, U.S. House of Representatives




Congressional Issues 2010
Immigration in a Division of Labor Economy

A third argument raised against the freedom of immigration is that its effect would be to reduce the wages of unskilled workers relative to those of skilled workers. This result would occur to the extent that such factors as their lack of knowledge of the language, and the possibly lower educational standards of the poorer countries from which they came, led the immigrants to enter the economic system more heavily at the unskilled end of the labor market than at the skilled end. In his treatise on Capitalism, Prof. George Reisman answers this argument:

[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 1 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 49 percent skilled, and a little less than 50 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.[119])

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 52 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 52 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. * * *

[119] The use of these percentages is based on the fact that two-thirds of an increase of 1 percent of the population as a whole is 1 percent of the population as a whole and 2 percent of half the population. Likewise, one-third of the 1 percent increase in the population as a whole is percent of the population as a whole and 1 percent of half the population.

Click here to continue to a fourth and final argument answered by Prof. Reisman: the non-economic argument to the effect that free immigration means turning the country over to foreigners and thus destroying its language and culture.

1 2 3 4 5 6 7 8 9 NEXT: 10

Gary North's essay on Darwin, Malthus, and a Biblical world-view

In his book The Myth of Over-Population, R.J. Rushdoony shows that the symptoms of "overpopulation" are actually symptoms of government intervention. Darwinian and Malthusian assumptions govern the modern State, and both the Republican and Democrat Parties.

Order Now:
The Myth of Over-Population

Recent Blog Posts

In the Next Two Years, Congress should:
  • expand, or at least maintain, current legal immigration quotas;
  • increase permanently the number of H-1B visas and deregulate employment-based immigration to facilitate the entry of skilled immigrants;
  • remove the new one-year time limit on filing for political asylum and reform the "expedited removal" laws;
  • repeal employer sanctions;
  • stop the move toward a computerized national identification system and the use of government-issued documents, such as birth certificates and Social Security cards, as de facto national ID cards; and
  • reduce restrictions on the movement of workers within the North American Free Trade Agreement area.
By the end of the decade, Congress should:
  • Abolish all anti-immigration laws.

As soon as possible, America should:

  • Create a vast network of voluntary social service agencies to meet all immigrants at the borders or piers and ensure their literacy and familiarity with American values.
  • Commit to on-going transmission of American values to immigrants in all areas of life. Read more about this.