Immigration reform

Tamar Jacoby is defending Bush's immigration reform plan in the Weekly Standard. I'm still skeptical, but I'm warming up to the possibility that combined with increased enforcement, it could work. Jacoby correctly argues that it would be easier to enforce our immigration laws if there was more legal immigration. My fear has always been that we'll skimp on the enforcement like we have for so many years now, ending up with higher legal immigration, along with some form of amnesty (Jacoby prefers the word "probation") that will encourage further illegal immigration. However, given the strong Republican opposition to Bush's plan, I'm starting to think if a compromise is found, it will probably involve a significant increase in enforcement.

That said, I take issue with Jacoby's economics:

Many of his critics believe that the answer is to turn off the immigrant influx. We should, they say, make the necessary economic adjustments and do without the imported labor. It's an option; with enough resources, we probably could stop the flow. But are the American people prepared for the changes that would come with that decision? The likely economic sacrifice is incalculable: not just a few extra pennies on the cost of lettuce, but forfeited growth all across the economy, on a vast scale. In many industries today, growth depends on foreign laborers, who filled one in every two new jobs created in recent years.

The economic sacrifice is only incalculable if you don't bother to calculate. Behold, a numerical simulation of the economic effects of reducing immigration by 4000 per day for next three years:

First and foremost the population reduction induces a distinct decline in real GDP of approximately $120 billion per year averaged over the entire prediction period.... Averaged over the lower noninstitutional working age population however, the decline turns into a net gain amounting to roughly $220 per year in real terms averaged over the entire prediction period.

The unemployment rate is reduced by roughly half a percentage point...

That doesn't sound so bad.

Jacoby would do better to focus on the long-term costs of ending immigration. First the gloomy demographics: even if current immigration levels are sustained, our population is going to age a lot this century. Cutting off immigration would make supporting Social Security and Medicare that much more burdensome of future young workers. Also, from the geostrategic perspective, in a world in which overpopulation is not a concern (quite the opposite), more Americans, and more Americans as a fraction of world population, are preferable. Therefore, immigration should be kept at as high a level as is consistent with assimilation.

Alas, it's not clear at what level assimilation fails. (And how precisely are success and failure defined?) I suspect that at some point Hispanic immigration levels will have to be reduced if we want to avoid a permanently bilingual society (see here).

Update: fixed link to economic simulation to make scrolling down unnecessary.