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The Economics of an Invasion

People willing to work go where the jobs are. Dallas has jobs.
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Ever since Adam Smith, it has been axiomatic that the flow of labor will follow the flow of capital. National borders don’t impede the flow of capital. Neither can they impede the flow of labor.

Opponents of immigration—and I’m no enthusiast myself—can’t repeal the laws of economics any more than they can repeal the law of gravity.

Here’s the most basic law of economics: if Dallas has jobs, people are going to come from somewhere to fill them. Today, that somewhere is Mexico.

If anyone wants to stop the flow of labor to Dallas, the only way is to suffer a recession. Studies show that immigration slows to a trickle during downturns. The more severe the downturn, the slower the trickle. There were no debates in Dallas about immigration in the late ’80s.

The facts show immigration helps prevent recessions by stimulating economic activity. Every analysis, including one by the Federal Reserve of Dallas, shows that immigration is good for the economy. It does not depress wages, as some claim, except for the lowest paid, most uneducated, most unskilled workers—who seem not all that interested in working, anyway. It increases consumption and tax revenues. The Texas Comptroller’s Office recently confirmed decades of economic studies with its own that showed even illegal immigrants produce a net gain of billions for the Texas economy and millions for the state’s coffers.

“I’m all for immigration,” a friend counters when I offer this evidence. “I’m just against illegal immigration.” But what makes it illegal? The answer is, Congress makes it illegal. Immigration law is one more way that government interferes in the free market, in this case by telling businesses whom they can hire. As an example of how unsuccessful that can be, consider the recent government immigration raids on meatpacking plants, which caused a depression in the cattle market, higher labor costs, lower earnings, and higher prices to consumers. Social engineering, whether by socialists or Republicans, always produces unfortunate results.

Illegal immigrants are illegal because they can’t get here legally. Sometimes it is bad law that creates outlaws.

But, the argument continues, illegal immigrants are overwhelmingly poor and uneducated and, in coming here, take advantage of our welfare system and burden taxpayers. But if illegal immigrants were coming to America for its welfare benefits, wouldn’t they go to a state that doles out big welfare checks, such as New York, rather than one that doesn’t, such as Texas?

It appears that immigrants come to America not to freeload but to work. Between 1990 and 2000, Hawaii, a welfare-rich state, had very little immigration, while Nevada, a welfare-poor state, had explosive immigration. Hawaii didn’t have jobs, and Nevada did. Hawaii got poorer while Nevada got richer.

But won’t such a huge inflow of Mexican immigration alter the nature of American society? The same question was raised in the early days of the Republic (by Benjamin Franklin) about the Germans. It was raised later about the Irish, the Eastern European Jews, and the Chinese. Yet these immigrant groups, all of whom arrived poor and bedraggled and speaking a strange tongue, have been far more successful than the English colonials who preceded them. There is no reason to believe Mexicans won’t be as successful. In Dallas, many already are.

Is it an invasion? Yes. But it is an invasion of our own making. They are coming because we need them to do the work.