Problems with immigrants — today is no different

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How did America get to be “great”? One part of our self-perceived greatness is that we have a big population living in a big territory.

With the exception of American Indians (or for political correctness, “Native Americans,” or “Indigenous” or “Aboriginal” people), we all are recent (last 250 years) immigrants or the progeny of recent immigrants.

Not only have immigrants made America “great,” but immigrants made America. Period.

But today is different.

The truth about migration: How it will reshape our world
Arguments rage, but what does immigration really mean for jobs, economies and cultures? The evidence suggests we could turn a crisis into an opportunity

HUMANS migrate. It is a characteristic of our species. Yet now a migration crisis is headline news.

More than a million desperate people fled to Europe in 2015, and nearly 4000 died trying.

The influx is increasing and about to swell more as the weather improves. The United Nations says Europe faces “an imminent humanitarian crisis, largely of its own making”. And it is not alone.

The UN has also censured Australia for sending boatloads of refugees to squalid camps in other countries.

And US politicians talk of building a wall while tens of thousands of lone children flee violence in Latin America across the US-Mexican border.

If nearly all Americans are immigrants or descendents of immigrants, and if we all combined to make America great, why have we now become afraid of immigrants?

Why is today different?

The scientific study of what happens when humans move shows that many widespread beliefs don’t hold up to scrutiny.

“Concern about immigrants falls sharply when people are given even the most basic facts,” says Peter Sutherland, the UN Special Representative for migration.

One analyst even says that removing all barriers to migration would be like finding trillion dollar bills on the sidewalk.

The 2008 financial crash spawned insecurity about jobs and concerns about economic migrants. Several populist parties took the opportunity to warn of a flood of freeloaders at the gates.

“The logic driving this is the idea that migrant workers present additional competition for scarce jobs,” says Ian Goldin at the University of Oxford.

But that’s not how modern economies work.

If economies really were zero-sum games in this way, wages would go down as labour supply increased and natives might well lose jobs to immigrants.

But no modern economic system is that simple, says Jacques Poot at the University of Waikato, New Zealand.

The knock-on of economic migration is that increased labour also brings an increase in profit, which business owners can invest in more production.

They can also diversify, creating opportunities for a broader range of workers.

In addition, migration means workers can be more efficiently matched to demand, and make the economy more resilient by doing jobs natives won’t or can’t do.

Ask vegetable farmers in California or cotton farmers in the South, whether their field hands have replaced born-American workers.

“More people expand the economy,” says Goldin, because people are moving from where they cannot work productively to where they can.

In a survey of 15 European countries, the UN’s International Labour Organisation (ILO) found that for every 1 per cent increase in a country’s population caused by immigration, its GDP grew between 1.25 and 1.5 per cent.

The World Bank estimates that if immigrants increased the workforces of wealthy countries by 3 per cent, that would boost world GDP by $356 billion by 2025.

And removing all barriers to migration could have a massive effect. A meta-analysis of several independent mathematical models suggests such immigration would increase world GDP by between 50 and 150 per cent.

But who gets those billions?

Giovanni Peri of the University of California, Davis, looked at the situation in the US. “Data show that immigrants expand the US economy’s productive capacity, stimulate investment and promote specialisation, which in the long run boosts productivity,” he says.

“There is no evidence that immigrants crowd out US-born workers in either the short or the long run.”

Natives instead capitalise on language and other skills by moving from manual jobs to better-paid positions. Peri calculates that immigration to the US between 1990 and 2007 boosted the average wage by $5100 – a quarter of the total wage rise during that period.

Immigrants are consumers. Their increased buying means businesses increase selling. To do so, businesses must hire more people.

Who gets those new jobs? The advantage goes to American citizens, who by education and English speaking, are more likely to be hired for the better paying jobs.

The immigrants come in at the bottom of the employment chain, pushing American citizens up.

In short, immigrants’ consumption stimulates business, making more jobs available, and U.S. citizens, being better educated and better with English, receive the better of those newly created jobs.

The UK Migration Advisory Committee came to a similar conclusion. “EU and non-EU migrants who have been in the UK for over five years are not associated with the displacement of British-born workers,” it reported.

Very recent migrants do have a small impact, but mainly on previous migrants. What’s more, low-skilled migrants do “dirty, dangerous and difficult” jobs, which locals do not want – crop picking, care work, cleaning and the like.

As has been the case in America for the past 240 years, immigrants stimulate the economy and create better paying jobs for the rest of us.

Another presumption made about migrants is that they put a strain on benefit systems. This is also not borne out by the evidence.

“It is widely assumed that economic migrants are mainly poor people out to live off the tax money of the relatively rich,” says human rights expert Ian Buruma.

“Most of them are not spongers. They want to work.” A lot go not to countries offering generous benefits, but to where there are jobs.

Those who go to wealthier countries are not the burden people sometimes assume.

The Organisation for Economic Co-operation and Development, which represents 34 of the world’s wealthiest nations, calculates that its immigrants on average pay as much in taxes as they take in benefits.

Recent research shows that EU workers in the UK take less from the benefits system than native Brits do, mostly because they are younger on average.

Moreover, they bring in education paid for by their native countries, and many return to their homeland before they need social security.

Illegal migrants make a surprising extra contribution, says Goldin. While many work “informally” without declaring income for taxes, those in formal work often have taxes automatically deducted from their pay cheques, but rarely claim benefits for fear of discovery.

Social security paid by employers on behalf of such migrants, but never claimed by them, netted the US $20 billion between 1990 and 1998, says Goldin. That, plus social security contributions by young legal migrants who will not need benefits for decades.

We see the “fear-of-discovery” effect not only in unclaimed benefits, but in reduced crime.

Says Douglas Nelson of Tulane University in New Orleans. “On purely economic grounds, immigration is good for everyone.”

But economics is not the whole story.

Immigrants are often associated with crime. But here again the evidence doesn’t stack up.

In 2013, Brian Bell at the London School of Economics and his colleagues found no change in violent crime in Britain linked either to a wave of asylum seekers in the 1990s, or eastern EU migrants after 2004.

The asylum seekers were associated with a small increases in property crime such as theft – boosting existing local crime rates some 2 per cent – perhaps because they were not allowed to work, suggest the authors.

Immigrants in the US are much less likely to commit crimes and are imprisoned less often than native-born Americans. Tim Wadsworth of the University of Colorado has even suggested that a rise in immigration in the 1990s may have driven an overall drop in US crime rates since then.

The conservative scare-mongers paint a picture of immigrant hoards — criminals and rapists — taking over our nation. A blatant lie to gather votes from the frightened and misinformed.

Nevertheless, high rates of arrival can temporarily strain schools, housing and other services. “That is what people tend to see,” says Goldin.

He says investment is required to mitigate these problems. “Governments need to manage the costs, which tend to be short-term and local,” he says.

Rather than spending billions to seek out and deport immigrants, the government should spend money to accommodate these valuable additions to our society.

Perceived threats to national identity often top natives’ list of concerns about immigrants.

Ellie Vasta of Macquarie University in Sydney, Australia, is trying to understand why Europe, which embraced multiculturalism in the 1970s, today calls for cohesion and nationalism, demanding that immigrants conform and testing them for “Britishness” or “Dutchness”.

Canada has tried to base its national identity on immigration. Canadian prime minister Justin Trudeau told the World Economic Forum in Davos, Switzerland, this year that “diversity is the engine of investment. It generates creativity that enriches the world.”

This view is shared by complex systems analyst Scott Page at the University of Michigan, Ann Arbor. He argues that culturally diverse groups, from cities to research teams, consistently outperform less diverse groups due to “cognitive diversity” – exposure to disagreement and alternative ways of thinking.

“Immigration provides a steady inflow of new ways of seeing and thinking – hence the great success of immigrants in business start-ups, science and the arts,” he says.

In 2011, for the first time since mass European migration in the 19th century, more non-white than white babies were born in the US, mainly to recent Asian and Hispanic immigrants and their children.

By 2050, white Americans will be a minority, says Bill Frey of the Brookings Institution in Washington DC. That’s good news for the US, he adds, because it gives the country a younger workforce and outlook than its competitors in Europe and Japan.

In summary, it’s difficult to assure someone who has lost their job, or is afraid they soon will, that immigrants, rather than being a threat, are a blessing,just as they have been throughout America’s history.

The scare-mongers lie about immigrants being criminals, rapists, and job stealers who take benefits without making a contribution.

The facts are diametrically the reverse. Immigrants are business-stimulating consumers, who not only increase the job market, but by taking the lowest-paying jobs, push American citizens up the wage scale. In total, immigrants contribute far more than they take.

They are younger (good), less likely to be criminals (good), and they bring to America a diversity that is creative and stimulative (very good).

For all the wrong reasons, America recently has made immigration very difficult, expensive and time consuming. We don’t want illegal immigrants, while we make legal immigration next to impossible.

Conservatives in America criticize immigrants for being illegal, but don’t want to provide even a pathway to legal citizenship.

American conservatives are the most xenophobic in history, and this disease hurts every one of us, morally and economically.

Immigration prevents stagnation. Immigration is how America has become great.

Today is no different.

Rodger Malcolm Mitchell
Monetary Sovereignty

 

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually Click here
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

THE RECESSION CLOCK

Recessions begin an average of 2 years after the blue line first dips below zero. A common phenomenon is for the line briefly to dip below zero, then rise above zero, before falling dramatically below zero. There was a brief dip below zero in 2015, followed by another dip – the familiar pre-recession pattern.
Recessions are cured by a rising red line.

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

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Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes..
•No nation can tax itself into prosperity, nor grow without money growth.
•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)
•Deficit spending grows the supply of money
•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
•The limit to non-federal deficit spending is the ability to borrow.

•Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between rich and the rest..
•Austerity is the government’s method for widening the Gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

MONETARY SOVEREIGNTY