For the (probably not) last time, the DREAMers are not taking your jobs.
Today I learned from Jeff Sessions that DREAMers are taking jobs away from real Americans. No wait, that’s not right- today, Jeff Sessions tried to tell me that DREAMers are taking jobs away from real Americans (or, more accurately, “real” Americans). He’s woefully incorrect, but a lot of people appear to share this viewpoint. For example, when Tim Cook tweeted that he has 250 DACA recipients working at Apple (he called them coworkers, it was nice), a lot of responses were of the form “those are jobs that could go to real Americans instead.”
Please allow me, as an economist, to set the record straight here. Now, I get why this is hard- it seems fairly intuitive that a new person coming onto the scene could take your job in the same way that they could take your girlfriend or whatever (actually, even that analogy doesn’t entirely work), and most attempts by economists to show otherwise start with “well, there’s this paper that uses a simple multiple linear regression to show that the average impact on hourly earnings…” I’m not judging, since I don’t think it’s entirely obvious why new people aren’t taking your jobs, but I do want to take a stab at a simple explanation.
The belief that there’s a fixed amount of work to be done in an economy is referred to by economists as the “lump of labor fallacy.” (Now you can go sound smart to your friends!) If there were a fixed amount of work, then sure, more people would mean more unemployment. But there isn’t, and we can see that because we manage to survive new people coming into the workforce all the time- they’re called young adults. Think about it- we generally experience positive population growth, so later generations are on average larger than earlier generations. This means that there are usually more people entering the work force than retiring, but we’ve failed to converge on a Hunger Games-type dystopia- how can this be? We can look at the data to see that employment tends to increase by 100–200K each month, which essentially absorbs the new people, so there must be something going on that we’re not thinking about.
That something, as it turns out, is young adults buying stuff (or saving, technically speaking, but I promised to not overcomplicate). Put simply, more people buying stuff means more people employed to make said stuff. Now, this relationship isn’t perfect, since the young adults buy imports and some of them make exports, but it’s there, and the same is true when the immigrant case is considered. For example, a number of those 250 immigrants that Tim Cook mentions likely own iPhones, and this demand for iPhones serves to increase the number of people that Apple employs. Sure, demand from the 250 immigrant employees isn’t enough to support 250 jobs, but when you consider all of the DACA recipients in the U.S., you get closer. Furthermore, the 250 immigrant employees buy more than just iPhones (presumably, I don’t know their lives), so their actions are also increasing employment in other industries.
To see this another way, let’s do a simple thought exercise. Take all of the immigrants and put them on an island- call it Ellis Island, for the sake of argument. Make it so they all live and work on this island and don’t have anyone coming in from the mainland U.S. to help them with anything. It stands to reason that the size of the overall U.S. economy is then the sum of the mainland economy and the Ellis Island economy, right? Ok, now move Ellis Island closer to the mainland… closer… hopefully you see where I’m going with this. Even when the economies are right next to each other and allowed/able to interact, there’s no reason to think that the island people are somehow taking something away from the mainland people.
In retrospect, I shouldn’t have called this island Ellis Island, I should have called it Hawaii- if I recall correctly (as I’ve read, I wasn’t there), the U.S. economy didn’t take a hit when Hawaii became a state, nor did Hawaiians take “real” Americans’ jobs en masse. Instead, the economy grew by roughly the GDP of Hawaii, and no, it’s not just due to Hawaii’s vast natural resources. This observation also works in reverse- if the U.S. were to give up Hawaii, the U.S. economy would shrink (on an overall basis, not necessarily on a per-capita basis). The same is true if the U.S. gets rid of immigrants who work and buy things- in this sense, deporting all DACA recipients would be roughly equivalent to making South Dakota secede (maybe even more, depending on whether the average DACA recipient produces more than the average South Dakota resident).
I guess if, after reading this, you’re still for deporting the DACA kids but against chucking South Dakota, I can only hope it’s because of your extreme fondness for Mount Rushmore and not something more pernicious.
