Immigrants and Jobs - Island of Sanity

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Immigrants and Jobs


Whenever people discuss immigration, and especially illegal immigration, perhaps the biggest argument is that immigrants take away American jobs.

The only way this theory makes sense is if you assume that there are a fixed number of jobs available. If one person gets a job, someone else must lose one. But this is clearly not true. The number of employed people goes up and down all the time. For example in January 2002 there were 134 million employed people in America. In January 2009 there were 140 million. 6 million jobs were created in 7 years. Where did they come from?

Economists have long understood what they call "the multiplier effect": for every job that is created, about 4 more jobs will ultimately be created. When someone gets a job, it normally comes with a paycheck. The person spends that money somewhere. Say he spends it at a hardware store. Now the hardware store has a little more income and a little more work to do. They might give some of their people more overtime, or if they're maxed out on overtime, they might hire a new person. They have to buy more stock to replace what was sold. Their suppliers now have more income and more work to do. Etc. Then the workers at the hardware store and the hardware store's suppliers have more money, which they spend somewhere, giving more business to those people. They spend their money somewhere giving more business to someone else. Etc.

So yes, in a particular case, if a native-born citizen and an immigrant both apply for the same job, and the immigrant gets it, the native-born person has lost a job to an immigrant. But when the immigrant spends his money, he creates jobs for 4 more citizens. Someone who fails to get a job he applied for and then sees someone with a foreign accent working at that store may understandably be angry at immigrants. But someone who works for a store where many immigrants shop should be grateful to immigrants.

As I right this (May 2010) there are 15 million unemployed people in America. There are estimated to be 20 million illegal aliens. If the government managed to round up 15 million illegal aliens and deport them tomorrow, does that mean that all those unemployed people could now promptly get jobs? Surely not. Indeed, by the known principles of economics, the opposite would happen. When someone loses a job, we see the "multiplier in reverse". Now the places where the immigrants used to shop have less money. The store has to lay people off. It sends less money to its suppliers, so they hurt. Etc. That's why it's so hard to recover from a recession: once people start to lose jobs, the effect ripples through the economy until other factors can outweigh the multiplier effect. If 15 million illegals were deported, we would expect 60 million citizens to lose their jobs, too. Well, it would probably be less than that because illegal aliens make a lot less money than the average citizen. Deporting 15 million illegal aliens might only put 10 or 20 million citizens out of work.

© 2010 by Jay Johansen


Comments

Gilannk Oct 3, 2015

You definitely sholud have put some bait in your most recent media-related post, maybe something like: like noble immigrants struggling to evade the INS, bloggers struggle to get acceptance from bigger media sources.

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