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Posts Tagged ‘healthy economy’

Immigration and human capital

In economics on May 14, 2010 at 3:23 am

“Free trade is a lot like technology. It lowers the price of things for consumers, expands markets for businesses and provides jobs.” — Drew Carey

“Illegal immigrants are taking jobs away from hard-working Americans.” The claim is repeated often — but is it true?

Some fans of a Facebook page created “for conservative Americans” apparently think so. While perusing the discussions tab, a thread titled “Top Ten Myths About Immigration” caught my eye. The title seemed oddly out-of-place for a conservative group.

The creator of the discussion simply reposted information from the Justice for Immigrants website. Basically, the post attempts to debunk popular myths about immigration. One reoccurring falsehood is that undocumented workers are flooding the workforce with cheap labor, thus stealing jobs from American citizens.

But an understanding of simple supply and demand economics renders this argument void.

The fact is, immigrants would not be able to come to this country and work if it weren’t for market demand. And the market is controlled by consumers, so ultimately, it is American consumers who create job opportunities for their Mexican neighbors.

The argument that somehow an increase in population depletes the number of available jobs is completely illogical. If this were fact, the reverse argument — that a decrease in the population makes more jobs available — would also be true. Job availability has nothing to do with population. It has everything to do with the condition of an economy.

Human beings are not a burden, they are a benefit. Labor, or human capital, is a valuable resource for an economy. And an economy that has jobs available for labor to fill is a healthy one. Robinson Crusoe author Daniel Defoe thought so:

“People are indeed the essential of commerce, and the more people the 
more trade; the more trade, the more money; the more money, the more 
strength; and the more strength, the greater the nation…All temporal 
felicities, I mean national, spring from the number of people.”